SUSTAINABILITY AND AUSTRALIAN COASTAL SHIPPING: SOME ISSUES

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1 SUSTAINABILITY AND AUSTRALIAN COASTAL SHIPPING: SOME ISSUES PROFESSOR SOPHIA EVERETT University of Melbourne Australian Maritime College University of Tasmania COLIN KITTEL Australian Maritime College University of Tasmania

2 CONTENT Introduction background Coastal shipping on the agenda? Overseas Australia Freight task Bulk Non bulk Environmental issues Congestion Greenhouse gas emissions Research positioning Government Researchers Operators Problems for Australian context Manning levels, crew costs, crew to berth ratio, cabotage Can coastal shipping be viable? Chain integration

3 Shipping Cargoes Dry bulk Liquid bulk Container Break bulk Services Liner Coastal Short sea International International with coastal leg

4 Length 397m; Beam 63m; 123,000 DWT; Max speed 50kph; Cost >US$145m; 15,000TEUs.

5 IRON PACIFIC 1986: 231,851 DWT

6

7 Service providers Vertically integrated with company s operations (BHP) 3 rd party service providers Shipping companies Integrated in end to end chain (Toll Holdings) Government

8 Coastal shipping on the agenda Clean and green governments agenda Developments overseas Congestion particular corridors Environment and GHG emissions Protection of coastal fleet cabotage retained Developments in Australia Inter city congestion Environment and GHG concerns Industrial relations maintain Australian fleet

9 USA estimated truck traffic 2020 Source: USA Department of Transport M.Brooks 2010

10 Australia estimated truck traffic 2025

11 Developments overseas USA coastal shipping as alternative to congested coastal routes Frankel Baird Motorways of the sea concept fast ferries replacing some land transport Japan ferry links within Japan and between Japan and Asian destinations EU transport 2 nd largest contributor (21%) GHG emissions in 2005 contribution increase to 27% by 2020 Increase of 62% between 1990 and 2005 maximise use of waterways

12 Modal share non bulk cargo Australia Bulk cargoes shipping Non bulk cargoes % % Road Rail Sea Air Source: Bureau of Infrastructure, Transport and Regional Economics (2009) National road network intercity traffic projections to 2030, Working Paper 75

13 Transport emission Australia (2005) Third largest contributor to GHG (14%) in 2005 Freight transport emissions grew by 30% between 1990 and 2005 Freight transport emissions expected to grow 27% between 2010 and 2020 Road transport accounts for 90% of total transport emissions

14 Government policy Government concern studies House of Representatives Standing Committee on Transport and Regional Services (2007) The great freight task: Is Australia s transport network up to the challenge? National approach to infrastructure planning (Infrastructure Australia) NTC (2008) Freight transport in a carbon constrained economy Focus road to rail rather than coastal shipping per se

15 Australian coastal fleet cost issues High cost of labour Manning levels crew to berth ratio Cabotage protection Strengthened by MUA links with federal Labor government Result shipping operations off shore

16 Solutions to high cost? Reduce manning levels and high cost of Australian flag shipping 2nd register Flag out register vessels in tax havens (Flag of Convenience) Shipping leg embedded in integrated chain

17

18

19 Some issues Coastal shipping as a single mode not viable Viability comes from shipping embedded in chain and end to end control Chain operations more efficient Reduce/eliminate bottlenecks Value in end to end control Higher cost shipping leg can be offset by other chain elements

20 BHP Billiton signals return to shipowning After deciding almost 15 years ago to exit shipowning and focus solely on mining, BHP Billiton has joined the growing number of resource giants now looking to order cheap new tonnage from Asian shipyards (Lloyds List/DCN ). 3PSP providing a shipping leg in integrated transport operations

21 Can coastal shipping be an alternative to road? Niche markets BHP steel coils Combine containerised cargo with break bulk or bulk High speed container vessel on major corridors north south and east west. Cost? Government subsidy? Issue of ports goods will require land transport for final distribution to user/customer

22 THANK YOU

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