Boost for Australian Merchant Shipping Fleet

The Australian ocean merchant shipping fleet has been in steady decline for decades. Not even the much heralded reforms by the previous Federal Government in 2012 designed to boost the Australian merchant fleet have managed to halt that decline. In the past two years the Australian ocean merchant fleet fell by a third from 21 vessels to only 14.

However, thanks to a Chinese/Australian trading partnership this decline is likely to be reversed with five container vessels to be added to the Australian merchant fleet and will operate under the Australian International Shipping Register (AISR) established as part of the 2012 shipping legislative reforms. If the arrangement proceeds these will be the first vessels registered under the AISR, which offers certain fiscal incentives to the owners of non-Australian owned vessels registered under the AISR provided certain Australian crewing and other requirements are met.

The new container shipping line partnership between Great Southern Shipping Australia (GSS) and Rizhao Port Group of China (Rizhao) proposes to operate a weekly container shipping service between east and west coast Australian ports and Rizhao in China as well as servicing coastal routes around Australia. Australian ports which will benefit include Brisbane, Sydney, Melbourne, Fremantle and Bell Bay. Rizhao Port is the eleventh largest port in the world and it will be the home port for the GSS operation. Rizhao Port is already one of Australia’s largest resources export destination, and is now working to position itself as a regional container hub in Shandong Province between Shanghai and the northern ports of Qingdao, Tianjin and Dalian.

GSS also announced an initiative to assist the future skills and training needs of the Australian merchant marine with its aging workforce in proposing the introduction of a scholarship program for each vessel operated under the Australian flag by GSS. The initiative which is due to commence in July has been welcomed by all sections of the Australian maritime community. The new service has been designed in consultation with Australian importers and exporters and logistics operators to complement and enhance their supply chains and deliver efficiency. The service will improve the overall supply chains of Australian shippers internationally and domestically and should provide savings in both transit times and cost. The new service will encourage Australia’s embattled coastal sea trade by redirecting goods from road to the more environmentally-friendly sea transport. The new service will be particularly welcomed by Tasmanian exporters and importers providing direct routes to China stimulating growth in Tasmanian exports helping them be more competitive internationally. The new service will also provide the first and only direct container link between Western Australia and China.

The establishment of the new liner service comes at an appropriate time with the China-Australia free trade agreement (FTA) now in full swing enhancing the attractiveness of Australian exports destined for the growing Chinese consumer market.

Rizhao is the start and end point for two of China’s Silk Road railways that operate to both north and south Europe. The new GSS service effectively extends the Silk Road from Europe to Australia by sea and should reduce transit times from Europe by up to 12 days.

From the point of view of the Australian merchant fleet it is a timely reminder that FTAs benefit not only exporters of merchandise but also Australians engaged in the operation of ships as well as supporting services such as chartering, stevedoring, logistics, marine insurance and other maritime services. It is to be hoped that other shipping operators look to taking up the benefits available for them under Australia’s recently negotiated FTAs with Japan and South Korea. Should the Trans Pacific Partnership come into operation there will be even greater incentives for Australian shipping interests to become engaged in enhanced global sea trade to carry exports encouraged by Australia’s FTAs.

Post by Derek Luxford 

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