Restrictions Stifling Australia’s Coastal Shipping

Over AUD 400 billion worth of international cargo moved across Australian ports in 2012/13, and some 4,900 cargo ships made almost 14,000 visits from overseas to Australian ports. However, Australian ports handled 97.4 million tonnes of coastal freight during 2012-13, an almost 2% decrease on 2011-12, indicative of a longer-term trend of decreasing amounts of coastal trade, said Australia’s Deputy Prime Minister  Warren Truss at Shipping Australia Ltd Luncheon.

Minister Truss pointed out that coastal shipping has the opportunity to take long distance cargo off Australia’s highways and railway lines and move it around the coast, stating that this would only be possible if coastal shipping is competitive and productive. Encouraging coastal shipping in this country is not a nice extra, it is logical and essential, Truss believes.

Truss sees the reasons for the decline in coastal shipping in ”flawed, bureaucratic and protectionist tiered licencing system,” leading to ”almost 1,000 fewer coastal voyages and almost 2 million fewer tonnes of freight moved by foreign flagged temporary licenced vessels in its first year of operation,” and with the Australian trading fleet ”also continuing the downward trend, with the number of major Australian registered ships with coastal licences declining from 30 in 2006-07 to just 13 by 2012-13.”

Currently, the operating costs of Australian ships, and particularly labour arrangements, are uncompetitive when compared with operating costs for foreign ships. The answer to the problem Truss sees in ”alleviating the misplaced burdens  predecessors imposed on Australian shipping —and to help create the conditions for the industry’s growth and success.”

Innes Willox, Chief Executive of the Australian Industry Group said: “The current restrictions on Australia’s coastal shipping are needlessly wasteful and are imposing unnecessary inconvenience and costs on Australian business and the community.  

Improved access to coastal shipping would ameliorate the growing congestion and maintenance costs on Australia’s road and rail networks and it would reduce the regulatory barriers to participation by foreign vessels in Australia’s coastal shipping. Improved access would have a disproportionately favourable impact on Tasmania. 

While unfettered access to the capacity on foreign ships would reduce costs further, Ai Group is mindful of the competitive restrictions placed on domestic shipping companies through the application of the Fair Work Act and the Seagoing Industry Award.”

Willox is of opinion that a more balanced approach than is currently in operation would enable foreign ships to apply for single-voyage, multiple voyage or continuing licenses through a simple system that does not inhibit their participation in coastal shipping by subjecting them to the unnecessary regulatory burdens that are currently imposed under the Coastal Trading Act; and reduce the scope of the Fair Work Act so that it did not apply to prevent the use of foreign vessels in coastal shipping.

“These changes would remove the excessive restrictions put in place in 2009 while not undermining the competitive position of domestic shipping companies and their employees,”  Willox said.