INDUSTRY OPINION:

Travis Brooks-Garrett* - Melbourne

May 15 2017 - 11:24:28

ON FRIDAY, submissions to the Department of Infrastructure and Regional Development closed for the proposed amendments to the Coastal Trading (Revitalising Australian Shipping) Act 2012 (Coastal Trading Act). The proposed amendments are not vast, they're bipartisan in their design, and they are largely administrative in nature. Nevertheless, the Department hopes that they will serve to re-energise the coastal shipping market, after years of losing share in the domestic trade freight task. It's an important issue, with Australia's coastal fleet falling from 30 in 2006-07 to just 13 by 2012-13. Today it is 18, but with many of those vessels bulk or, if containerised, involved in the Bass Strait trade, we still see very little contestability in containerised coastal trade. Only 17% of Australia's domestic trade freight task is carried by sea, and even that number looks high. It's an important development, particularly at a time when the federal government has committed record investment to road and rail infrastructure.

The deadline for submissions was extended after the Department only received a small number of submissions, likely to be a symptom of submission fatigue. Australian Peak Shippers' Association (APSA) has provided submissions on this issue several times previously, most recently to the Hon. Warren Truss where we provided evidence from six major Australian traders. Hopefully by extending the deadline more stakeholders had an opportunity to submit their case. It is abundantly clear that Australian manufacturers and shippers need a competitive coastal shipping sector and, while these reforms do not represent a major shift in policy, they are a step in the right direction.

In short, the changes are designed to reduce the administrative burden associated with accessing temporary licenses and general licenses for coastal shipping. This includes removing the five-voyage minimum requirement for a temporary license; revising the licensing requirement where no general license vessels are available; extending the tolerance limit for loading dates to 30 days; and other changes. As above, they're good and inoffensive changes, and I doubt anyone in industry would put up a fight. The amendments may result in more coastal shipping services being offered to the market, more temporary licenses being issued, and may result in a more attractive cost environment for shippers and shipping lines, delivering trade and productivity benefits. For that, the minister and the Department should be commended.

However, the proposed reforms do not seek to reset Albanese's policy of Part B wage contributions for foreign seafarers, and for that reason there are some detractors. It's probably fair to say that the Coastal Trading Act did not revitalise the local sector as intended, with Australian containerised shippers still overwhelmingly reliant on foreign-owned and foreign-flagged vessels. The feedback we have received is that APSA members see very little contestability in the current market by Australian-flagged and Australian-manned service providers. Questions should therefore be raised about why we have adopted a protectionist policy approach to this issue, including the need for the Part B wage component for foreign seafarers.

While the proposed amendments could be interpreted as a change in the way the existing policy is administered, rather than a change of policy, we still believe it will deliver positive outcomes for the sector.

We commend the minister and the Department on the proposed amendments, which we hope will make Temporary Licenses more attractive to shipping lines and shippers.

* Travis Brooks-Garrett is a partner at Freight & Trade Alliance and Australian Peak Shippers Association secretariat

Lloyds List Australia - Submissions close for proposed amendments to Coastal Shipping

INDUSTRY OPINION: