REVIEW SCOPE
The Coastal Trading (Revitalising Australian Shipping) Amendment Bill 2017 was the most recent attempt to reform Australia's approach to Coastal Trading regulation. This Bill lapsed in the Senate after the election earlier this year.
Moving forward, the Federal Government is looking for practical solutions to coastal trading reform with caveat of remaining within the parameters of the current system.
FTA / APSA SUBMISSION
FTA / APSA provided a submission to the Department of Infrastructure, Transport, Cities and Regional Development this week supporting the need for reform to facilitate increased access to coastal shipping services of containerised cargo.
Based on preliminary member feedback, it appears to be the case that the majority of coastal cargoes travel East/West (approx. 60/40). Initial estimates suggest that sea movements cost approximately $2.5K to $3K compared to $6K by rail and $12 to $15K by road.
While sea cargo remains the most cost effective mode of movement, prices are still high when compared to international freight movements and are limited in commercial viability due to the infrequent schedule of voyages.
We understand from incumbent shipping line service providers that extensive regulation exists which appears to be a limiting factor preventing competition in the market. Similarly, feedback that we have received from international shipping lines servicing Australian container ports are that they are reluctant to handle domestic containerised cargo movements due to high regulatory and labour costs.
As a result, local manufacturers and domestic suppliers are disadvantaged by a lack of competition in the market and frequency of service.
The FTA / APSA submission also made reference to other benefits that could be derived by increased coastal shipping services including: - less damages to cargo, significant environmental and safety benefits;
- assisting in equipment / container in-balances around Australia (and internationally); and
- greater utilisation of existing port equipment and capital costs borne in Australia.
NEXT STEPS
FTA / APSA will be participating with other key industry stakeholders in a consultative forum in Sydney on Coastal Trading on 12 December 2019.
We encourage members to provide additional commentary / views to support our advocacy. Please share details to pzalai@FTAlliance.com.au or direct to the department at coastaltrading@infrastructure.gov.au
FURTHER DETAIL
Coastal Trading Review – Terms of Reference
Ports Australia – submission to the review
Paul Zalai - Director and Co-Founder, FTA / Secretariat, APSA |
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