Shipping Australia policy update

Chairman’s report 2011

It has indeed been a privilege to have been chairman of Shipping Australia for the past six years.  It has grown into a strong organisation, well equipped to promote all aspects of the maritime industry in Australia and globally and importantly meet the requirements of its large and varied membership for an efficient and effective national industry association.

Its ability to face and respond to the many challenges faced by the industry is not only because it has a very active and experienced secretariat including state secretaries in Queensland and Victoria but also because of the active participation of many of our individual members in the Policy Council, steering groups, state committees and chairmen of these committees in each mainland state.  I am indebted to them for their selfless contributions.

In my view, 2011 has been a year when SAL has faced the most challenges since its formation in 2003.  The most pressing challenge was the serious congestion experienced in the container terminals at Port Botany which has cost the industry many millions of dollars and has had a cascading effect not only on other ports in Australia but ports of call overseas.  In the last part of the year, SAL was actively engaged with the stevedores and with Sydney Ports Corporation in trying to find a short term solution.  In October, we compiled cost data to reinforce our message to the State and Federal governments regarding the severity of this problem that we have endured for close to 18 months.  Whilst congestion surcharges assist in offsetting some of the costs they are only a contribution to the overall costs incurred.  SAL welcomed the final resolution after 12 months of the Patrick/MUA negotiations on a new Enterprise Based Agreement but suffered subsequently as a result of industrial disputation and work stoppages, bans and other work limitations affecting general stevedoring and DP World container facilities throughout Australia.

SAL has sought on a number of occasions to be part of the consultation process regarding shipping policy reform.  Both Ports Australia and the Australian Shipowners’ Association were actively involved in the task forces established to provide detailed recommendations to the Minister on his reforms which he released on 9 September 2011.  The details of, for example, the application of the Australian International Shipping Register will, in my view,  be less than optimal as the Government did not have the benefit of the collective wisdom of our members on that particular issue and on the coastal shipping regime.  We did provide information to the Department but it was unfortunate we weren’t represented, at least on the regulation task force.

However, SAL was and appreciated being represented at the industry briefing sessions that were held in Canberra on 30 November and 10 December.  Whether these reforms will, in fact, lead to a viable and internationally competitive Australian merchant marine which SAL supports cannot be determined until we have assessed the detail of the reform and also what productivity gains can be achieved as a result of the proposed industrial compact between unions and employers.

In relation to the current coastal shipping regime, the Fair Work Act still applies to single or continuous voyage permits issued to foreign flag vessels if more than two single voyage permits were used in the previous 12 months.  Despite many representations to the Government, they have refused to amend the Regulations, despite the increased cost  burden and lower service levels being borne by the consignors and consignees of Australian domestic cargo carried by sea.

The decision to sell Port Botany on a long term lease basis

Shipping Australia was concerned at the decision by the NSW Government to sell Port Botany by 2013 on the basis of a 99-year lease similar to what occurred in Brisbane. SAL disagreed with the sale of the Port of Brisbane and given the subsequent cost increases by stevedores and empty container parks, as a result (in their view) of very significant increases in land rentals, it appears to us that concern was justified.  The major container ports in Australia are in a very strong market position with the exception of Adelaide which competes with Melbourne.  There is some marginal competition, for example, exports from northern NSW can go through Brisbane, rather than Sydney and similarly exports in the southern region of NSW can go via Melbourne.  For container imports and many exports there is no real alternative to Sydney.  We look forward to discussing this issue further with the NSW Government.  There was no consultation with any stakeholders, as far as we can understand, prior to the decision being taken.  In particular, we would like to know whether other options such as a possible public private partnership arrangement were considered.

Another issue of significance is how the current Port Botany Landside Improvement Strategy which is backed by government regulation will be applied in a pure  private enterprise environment.

Australian ports and infrastructure

Shipping Australia was supportive of the national port development strategy and we welcome the recommendations being accepted by the Council of Australian Governments.  We are also working with Infrastructure Australia on the national freight development strategy.

The development of a third container terminal at Port Botany was a major achievement for the Government and in particular, Sydney Ports Corporation.

Whilst a third stevedore should be operating in both Brisbane and Sydney by early 2013, we continue to have concerns regarding the capacity to accept a third stevedore in the Port of Melbourne.  SAL has held a number of discussions with the Victorian Minister for Ports, Denis Napthine and we look forward to an announcement from the Victorian Government in relation to this important issue. Interestingly, the ACCC 2010/11 report on stevedoring operations warned of risks of capacity running short at the Port of Melbourne by around 2015.

In the submission SAL made on the proposal to relocate motor vehicle importing and exporting from the Port of Melbourne to the Port of Geelong, we supported the creation of a third container terminal at Webb Dock East and recommended relocation of motor vehicles to Webb Dock West.  There were a lot of issues raised in that submission that would need to be resolved if Geelong is to be developed to efficiently and productively provide for the significant motor vehicle trade that currently uses Melbourne.

During the year, the Victorian Government announced the proposal to scrap the previous government’s Freight Infrastructure Charge on trucking companies serving the Port of Melbourne and instead impose a new port licence fee on the Port of Melbourne Corporation to be recovered via their normal fees and charges.  Legislative backing for the proposed licence fee was introduced into the Victorian Parliament in December last year.

The PoMC has written to all stakeholders on setting out their current views on a possible scheme to increase charges to raise the funds required ($75 million in the first year but the objective is understood to be a collection of $1 billion over 10 years).  SAL objects to taxing the supply chain to raise infrastructure funds.  In fact, there is no assurance that the funds will be spent on infrastructure because it will all go into consolidated revenue.  Taxing the supply chain in this fashion is inefficient, lacks transparency and is a costly way of raising government revenue.

As I mentioned last year, SAL members remain concerned at the increasing port costs around Australia, and in particular, the infrastructure charges levied by empty container parks and the charges by the stevedores in Brisbane on the trucking companies.  We published a list of the port cost increases over the last three years in the Spring edition of the Shipping Australia magazine.

Overloaded containers

As mentioned in last year’s report, SAL has been actively engaged with all stakeholders including the previous Road and Traffic Authority of NSW (now Roads and Maritime Services) regarding the requirement to build weighbridges in the container terminals at Port Botany.  The new NSW Government took an active interest in this issue and we commend the Minister for Roads and Ports for his intervention which resulted in agreement on weigh-in motion systems rather than static weighbridges being built in the terminals which is a much more practical and less costly result.  Weighing will only apply to import containers. SAL has been supportive of the Australian Government urging the International Maritime Organisation to take up the issue of compulsory weighing of export containers by all its members and the IMO has agreed to include that proposal in their work programme.  This initiative is also strongly supported by the International Chamber of Shipping, the World Shipping Council, the International Association of Ports and Harbors and BIMCO.

Empty container parks

The Victorian Transport Association has continued to pressure SAL on extending the working hours at empty container parks.  Only two parks have extended their operating hours and whilst SAL supports such an extension, it has to be at a cost that can be absorbed by the shipping lines and has to lead to increased volumes of empty containers in the park itself otherwise there will be additional costs without increased revenue.  As a first step, SAL has been very supportive of the Containerchain system being  introduced to increase transparency of park operations and provide the parks with the means to determine demand for their services on an hourly basis.

Nine empty container parks in Melbourne made applications to the ACCC seeking immunity from the “third line forcing” provisions of the Competition and Consumer Act 2010 in regard to this system which requires container transport operators to notify truck arrival times at the parks for the pick up or drop off of empty containers.  The ACCC was satisfied that the likely benefit to the public of the notified conduct will outweigh the likely detriment to the public.

SAL continues to monitor introduction of the Containerchain system very closely and is concerned that any fee should not be applied to bulk runs to container terminals because there is only one booking and not multiple bookings.  Nevertheless, SAL believes that there will be a substantial improvement in the handling of empty containers in parks as a result of this initiative.  We also look forward to its application in Sydney, on the basis of its successful operation in Victoria.

In the latter part of this year, serious congestion arose in the empty container parks in Sydney as a result of the inability for a period of time of Patrick Stevedores to accept any reasonable volume of empties through their container terminal.  Sydney Ports Corporation organised a meeting which was attended by SAL to seek ways and means of improving communications between all stakeholders to manage this final part of the container supply chain.

The border agencies

SAL continues to closely engage with border agencies such as the Australian Maritime Safety Authority, Customs and Border Protection, Australian Quarantine Inspection Service (now called Department of Agriculture, Fisheries and Forestry – Biosecurity), Office of Transport Security, Border Protection Command and the Department of Immigration & Citizenship.

Over the year, SAL was also actively involved with many government departments, especially the Department of Infrastructure and Transport at the federal level and many departments at the state level.  Contact has been maintained with many government agencies and the Australian Transport Safety Bureau is a case in point.

We have also made many submissions to government and parliamentary enquiries during 2011.

Changes to the application of GST

The ATO has issued a draft fact sheet stating that in the case of a non-resident seller arranging delivery of a container, the place of consignment is defined by the sales contract as, in the ATO’s view, it is the overarching agreement.  The draft fact sheet defines the place of delivery as a ships rail in a CIF arrangement.  SAL has closely consulted Ernst and Young and it is clear that the only workable resolution will arise as a result of meeting with both Treasury and ATO in Canberra which may necessitate a small legislative change.

An issue has also arisen in the bulk trades with shipping agents acting on behalf of non-resident ship operators and claiming GST import tax credits.  The ATO is continuing its work to identify whether it is feasible to develop a declaration form with a non-resident shipping operator, advising their GST registration status and stating that they will not claim any import tax credits for that voyage allowing the Australian based agent to claim the import tax credits and remove any confusion and liability.

The time that has been taken to resolve these issues is difficult to understand.

Container statistics

SAL is working with MariTrade and Ports Australia to review the Australian Bureau of Statistics trial on international shipping container movements, 2009-2010.  SAL is very supportive of this collection being available in the future but it should also include export containers and not just import containers.

Tsunami off the eastern coast of Japan

Following the devastating floods in Queensland at the beginning of last year, we witnessed the terrible earthquake and tsunami off the eastern coast of Japan on 11 March 2011 and the subsequent damage to the Fukushima Dai-ichi Nuclear Power Plant in Japan.  Warnings and information on possible repercussions were subsequently issued to merchant shipping in that area.  Fortunately, as far as Australia was concerned no major problems were encountered.  Our thoughts and prayers go with the families of those killed and the thousands that still remain missing.

Sale of Tradegate Services

During the year, the board of Tradegate sold its electronic commerce transaction business to a management buyout team headed up by former employees Faulkner MacDonald, Dominic Coles and Stephen Ware.  This was the same team that had provided Tradegate’s electronic commerce services for the past decade or more.  The new company, Commerce Plus Pty Ltd will continue to operate and support the following services: smart imports, import net, hazardous cargo, export net, Transcode, Manage mail/message Direct, internet services and payments.

The new company will also have a help desk and Commerce Plus had agreed to maintain existing prices for Tradegate members for a period of 12 months.  The new limited by guarantee company, the Australian International Trade and Transport Development Fund Limited, effectively takes over the existing Tradegate Development Fund following Tradegate’s dissolution.  It will fund future projects/developments in the international trade and transport industry.

FONASBA annual meeting

SAL was proud to have organised the forty-second annual meeting of the Federation of National Associations of Ship Brokers and Agents over the week 10-14 October in Sydney.  The 82 delegates from 28 countries enjoyed the social programme involving a city orientation tour, a welcome at Icebergs at Bondi Beach, a dinner cruise on the harbour, a trip to the Blue Mountains and the Taronga Zoo as well as a gala dinner on the Friday at the Cruising Yacht Club of Australia.

It was not all play, and the vigorous discussions in the working group sessions resulted in decisions/recommendations to promote the interests of both ship brokers and shipping agents.

Important issues for Australia were the discussion on 24 hours prior reporting for the loading of containers and the development of a single window in ports which allows one entry but many users rather than the current duplication of documentation and reporting.  In addition, the future availability and cost of low sulphur bunker fees, the development of the IMO biofouling issue for ships hulls as well as the possible future mandatory requirement for the weighing of export containers being debated in the IMO were also discussed.

Other topics of interest included an update on the possible ratification of the Rotherdam Rules and an update on the US requirement for 100 per cent container x-rays in countries exporting to the US.

There were many other issues discussed and presentations made on the current “state of play” in the container, dry bulk and tanker markets both globally and in Australia.  The FONASBA quality standard scheme for shipbrokers and agents was also highlighted.

A seminar was organised for 14 October with presentations by the Australian Quarantine and Inspection Service, the Ministry of Agriculture and Forestry in New Zealand and Sydney Ports Corporation  which all resulted in an active question time.

Finally, at the gala dinner, Mr Takazo Iigaki, chairman of the Japan Association of Foreign-Trade Ship Agencies was made an honorary member of FONASBA, the highest award the federation can bestow.

I would particularly like to thank our prime sponsors Sydney Ports Corporation and the Australian Quarantine and Inspection Service.  In addition, our thanks go to our member sponsors Hetherington Kingsbury and McArthurs, Asiaworld Shipping, Gulf Agency Company, LBH Australia, Inchcape Shipping Services, Middletons, Newcastle Stevedores and ITIC. AMSA, the Institute of Chartered Shipbrokers Australia and New Zealand Branch, Svitzer (Australia) and the Australian Maritime College were also sponsors.

Re-structuring of SAL/new chairman for 2012

During the year, the board of directors recommended to the Policy Council that the Border Agencies and Port Services Steering Group be dissolved along with the eCommerce Steering Group and a new General Steering Group be created that will meet when requested by members or if it has specific issues to address rather than scheduling meetings through the year.  A decision was made to also merge the Container Technical and Technical Steering groups but on subsequent reflection and comments by members,  it was decided to retain these two separate steering groups.

Currently we have 38 member lines with McArthurs deciding not to re-join.  Fortunately, on 1 July we had a new member, Hyundai Merchant Marine and we certainly welcome them to the SAL team.

On 30 November last year, I stood aside as SAL chairman and the board of directors unanimously elected Ken Fitzpatrick as the 2012 chairman.  I congratulate Ken on that appointment.

I appreciate the demands on all our time and the increasing workload with limited staff resources.  As mentioned in the introduction, I would like to express my sincere appreciation for all those that go beyond the call of duty and dedicate their time to promoting the interests not only of Shipping Australia itself but of the maritime industry in Australia and its massive contribution to Australia’s international trading task.  I also wish to thank my fellow directors, Simon Aynsley, Royce Brain, Kevin Clarke, Eddy Declerq, Ken Fitzpatrick, Geoff Greenwood and Nicolaj Noes.

Most sectors of the shipping industry reported losses in 2011.  A notable exception is the cruise shipping industry which has grown from strength to strength.  It is hoped that demand will pick up in 2012 but it has to be said that the outlook at the present time is not favourable.  Importantly, increasing land based costs and the regulatory burden on shipowners serving the Australian trades will only add to the losses and threaten the future viability of the operators concerned.  One major liner operator who has been involved in these trades for a very long time announced in 2011 that from mid 2012 it would be withdrawing from the liner trades world-wide.

In these challenging times, a united and strong national industry association is even more important.  I am confident that SAL is certainly up to the task but increasing its membership and influence will only make it even more effective.  I invite those shipping lines and shipping agents that have not joined SAL to consider doing so as a matter of priority.

I will retain an active interest in the affairs of SAL and do what I can to support the new chairman as a director of SAL.

 

CEO’s Report

Some good points in a dreadful year

2011 was a tough year for the shipping industry in almost every respect.  The global economic outlook worsened, almost all sectors of the shipping industry suffered financially especially with the increasing oversupply of tonnage, serious industrial disruption in Australian ports and port congestion in Sydney all added to our woes.

Nevertheless, there is always some light on the horizon and I expressed the hope in this report last year that we would see some action from the seemingly endless reports and submissions that dominated 2010.  There was progress in some quarters, especially in the Federal Government releasing its measures aimed at revitalising the Australian merchant marine, and the decision not to create a separate biosecurity agency as recommended in the Beale Inquiry but to retain functions within the Department of Agriculture, Fisheries and Forestry (DAFF).  The Australian Quarantine Inspection Service was re-named DAFF – Biosecurity but it had already introduced a number of initiatives in its Seaports programme that were beneficial to the industry, in particular clearing low-risk vessels on documents alone, a greater use of the electronic transmission of reports and the creation of the National Co-ordination Centre which has delivered a higher level of national consistency in terms of quarantine intervention.

On the export side, progress has been achieved in working towards clearing grain ships at anchor in a number of ports rather than at the berth which will speed up the loading process.  In addition, new procedures have been introduced by Customs and Border Protection to speed up the vessel clearance process.

Shipping policy reform

On 9 September 2011 the Minister for Infrastructure and Transport, Anthony Albanese announced the shipping reform package comprising four key elements:

• Tax reforms to remove barriers to investment in Australian shipping and to foster the global competitiveness of the shipping industry;
• Strengthen and simplify the regulatory framework with a transparent licencing regime for  coastal shipping supported by clearly stated objectives;
• Establishment of an Australian International Shipping Register to encourage Australian companies to participate in the international trades;
• Establishment of a Maritime Workforce Development Forum to progress key maritime skills and training priorities.

The centrepiece of the taxation package was the introduction of a tax exemption regime for Australian ship operators which delivered an effective tax rate of zero on the qualifying elements of corporate income tax.  Other components of the tax regime for Australian shipping included:

• A tax scheme combining a reduction in the depreciation period from 20 to 10 years, a balancing charge deferral and relaxed capital gains tax provisions.
• Exemption from Royalty Withholding Tax liability for foreign owners of vessels where the vessel is leased under a bareboat charter to an Australian company; and
• Ensuring Australians can work in international seafaring by providing seafarers’ tax concessions for resident employers of Australian resident seafarers, who spent 91 days or more on international  voyages on qualifying vessels in an income year.

The new licencing regime comprises:

• A general licence providing Australian flag vessels with unrestricted access to the coastal trades for a period of up to five years.
• A temporary licence enabling foreign flag vessels to operate in the coastal trades, subject to time, trade and/or voyage conditions.  These licences will be available for a period of up to 12 months.
• An emergency licence limited to cargo or passenger movements in emergency situations.

Features of the Australian International Shipping Register were outlined including access to the tax exemption and other tax incentives and arrangements enabling employment of foreign seafarers at internationally competitive rates and conditions, consistent with the Maritime Labour Convention and other international labour treaties.  There will be a requirement for a minimum of two senior Australian seafarers, preferably the master and chief engineer.  The Maritime Workforce Development Forum will be established comprising experienced representatives from across the maritime and skills industries and unions to work with the Australian Government to improve skills outcomes.

The Minister pointed out that the package was dependent on the unions and employers reaching an industry compact that will deliver increased productivity and the details of that compact had not been made available by the end of last year.  A working group in which SAL was represented met in Canberra on 30 November and again on 10 December  to work through some of the details of this important initiative.

Metropolitan Intermodal Terminal Study

Chi Thai, a Masters graduate from the Institute of Transport and Logistics Studies (ITLS) at the University of Sydney joined Shipping Australia in January 2011 as part of the ITLS postgraduate work experience programme.  Shipping Australia has hosted two previous graduates for work experience which has been most successful.  The graduates work on a project and Chi’s project was how we can maximise the potential of these inland ports or intermodal terminals, in Sydney and Melbourne in terms of advancing their commercial benefits and their efficiency of operation, especially in terms of the rail operation.  Her initial paper led to us applying for project funds from the Tradegate/Australian Chamber of Industry and Commerce Cargo Automation Development Fund to extend her placement for another six months in order to develop the ideas which emerged from her initial paper.  Chi completed her project just before the end of 2011.  She carried out extensive research and prepared the report on the basis of the information made available to her as a result of a thorough literature review and interviews.

The importance of fully utilising these IMTs will increase in time as the container ports at both Sydney and Melbourne try to cope with the increased volume of container traffic.  In Sydney, the report found that impediments to IMT development include the mismatch between the stevedores’ time windows and the rail paths, the lack of standardisation of siding lengths and excessive shunting activities at stevedores’ terminals regardless of the length of the train.  Melbourne’s rail performance was further disadvantaged by the complexity of its rail system and significantly low lifting productivity performed at the port.  In order to provide viable and regular rail services that effectively utilise the IMT asset, the development of rail infrastructure, improvement of rail handling capacity and establishment of an efficient rail interface are considered essential.  Financial support from government in the early period leading to increased utilisation of the rail service may be required.

To transport the expected throughput of 300,000 TEUs per year through the proposed Enfield Intermodal Logistics Centre, it will be necessary to run at least seven 600-metre train shuttles through the port daily with 60 per cent of the train loaded to achieve 108 TEUs per round trip.  It would result in a saving of almost 330 truck trips per day or 120,000 truck trips per year if the IMT was operating at peak efficiency.

The rail reforms that Sydney Ports Corporation has been working on to improve rail efficiency, once effectively implemented, together with the recommended areas for improvement in this report will definitely increase the viability of the Enfield IMT.

It appears that although Melbourne’s rail capacity is limited, its road infrastructure makes feasible the operation of high productivity vehicles to and from the ports.  Initial development of both road-rail and road-road IMTs is reasonable considering current rail performance; however, in the long term the report’s conclusion is that Melbourne’s rail task has to be developed to effectively relieve the number of containers moved by trucks to extend the life of the Port of Melbourne.  The report identified the following areas for improving intermodal terminals’ viability;

•       Better aligning of rail paths and time windows
•       Streamlining shunting and inspection activities
•       Allowing automatic underbond movements
•       Considering whether government financial support for the early years is required
•       Keeping an eye on opportunities for double stacking of containers, where feasible
•       Investing in IT infrastructure and establishing operational standards
•       Constructing dedicated rail freight lines that link to the IMTs and;
•       Identifying solutions to increase train utilisation.

The report includes the recommendation that major stakeholders should be invited to join taskforces both in Melbourne and Sydney to address the obstacles identified in this report and to consider other areas to improve the viability of IMTs given their potential to extend the life of existing container terminals and also to radically improve the efficiency of the sea-land interface.

The border agencies/environment

Customs and Border Protection has advised SAL that they are in the process of developing electronic pre-arrival PDF forms with writeable fields for pre-arrival vessel and crew electronic reporting.  Until these electronic forms are available, Customs will accept email copies of the pre-reporting forms and work is being done to make sure consistency is achieved nationally.  A similar form is being developed for pre-arrival advanced passenger processing which are required from cruise vessels and which include crew sign on/off forms.  It is also worth noting that Customs have relaunched “Frontline” under the new title of “Customs Watch” with all contact numbers remaining the same.

After very lengthy discussions and negotiations, agreement was finally reached on new administrative guidelines to apply to the AQIS Industry Cargo Consultative Committee.  This included new terms of reference and a confidentiality agreement to be signed by persons appointed to this committee by AQIS (now Department of Agriculture, Fisheries and Forestry – Biosecurity).  This is seen as a model form of industry consultation which AQIS hopes will apply to other consultative committees.  SAL is hopeful that this will allow a greater concentration on more substantive issues as far as AQIS is concerned.  AQIS has taken on board the feedback provided by SAL on the new electronic S-cargo and GAS processing procedures and the AQIS seaports programme held industry information sessions to discuss the expanded rollout of its streamlined clearance procedures, termed pratique documentation clearance.  AQIS is examining new and innovative ways of clearing more vessels by documentation rather than actual inspection on a risk assessed basis.  AQIS is discussing with SAL a proposed increase in fees.

SAL has attended two meetings of the AMSA Advisory Group in the past 12 months.  It has also been heavily involved in the stakeholder group reviewing Australia’s national plan and national maritime emergency response arrangements.  A risk analysis and assessment report has been prepared and SAL looks forward to the finalisation of this review.  SAL was also represented at a regional dialogue on the Maritime Labour Convention which was held in Cairns in May of this year.  It has been called a Seafarer Bill of Rights and it is a complicated instrument which will be a major change for Port State Control inspectors from being a safety inspector to looking after seafarer welfare and meeting all the requirements of the Convention.  SAL is supportive of Australia signing and ratifying this Convention which is yet to enter into force.

We are pleased to report that with regard to the additional $0.03 per gross tonne levy which was applied to the AMSA pollution levy as a result of the Pacific Adventurer incident in March last year, the clean-up and damages have hopefully now been repaid and the levy will be reduced by $0.03 per gross tonne in the second quarter of 2012.

SAL continues to liaise closely with the Office of Transport Security, both in terms of their strategic forum and the meetings of the consultative forum.  The focus this year has been looking at future challenges from a security perspective and how best to handle them.  In addition, SAL made a detailed submission to the Parliamentary inquiry into serious and organised crime on the waterfront.  The report for the Government’s consideration contained 22 recommendations but SAL did not agree that the Maritime Transport and Offshore Facilities Security Act, 2003 should include serious and organised crime.  We stated that taskforces along the lines of that established in NSW to tackle crime on the waterfront should be replicated in other states and territories as they are purely focussed on that particular and important issue.  In addition, SAL is opposed to the use of criminal intelligence to determine if a Maritime Security Identification Card should be issued without a strong appeal provision which would negate its use in the first place.

During the year, SAL made a submission in relation to the proposed code updating the in-water cleaning guidelines that were introduced to replace the ANZECC Code of Practice for Antifouling and In-water Hull Cleaning and Maintenance, 1997.  We have urged the early adoption of these revised guidelines to assist vessels that may be required to clean their hulls while in port but it is essential that the states and territory accept these revised in-water cleaning guidelines so they can be applied uniformly on a national basis.

SAL was appreciative of being consulted on the proposed Regulation Impact Statement for  new Australian biofouling management requirements which it is proposed will be introduced within the next four years.  Australia is supportive of a regime that reduces the risk of exotic pests being introduced into Australia but it is really essential that this be introduced internationally on a mandatory basis to ensure the majority of vessels adhere to the new standards.  The State of California in the US is considering a regime which has been highly criticised by the World Shipping Council and these criticisms have been brought to the attention of the Department of Agriculture, Fisheries and Forestry.

International developments

Action is being taken within the IMO which is strongly supported by the Australian Government for an evaluation of how the voluntary guidelines for biofouling management are being adhered to and SAL has urged the Australian Government to wait for the results of those assessments prior to introducing a mandatory scheme in Australia.

The IMO has also finally approved a number of systems for the on-board treatment of ballast water which would be consistent with the Ballast Water Convention when it enters into force.  The question of federal and state and territory jurisdictions accepting the operation of these systems and how they will be measured is an issue for ongoing debate.

At the climate change conference held in Durban in December last year, there was debate about the role of shipping in reducing C02 emissions.  It was pointed out at the conference that with the full support of industry, governments and IMO have now adopted global regulations for technical and operational measures to reduce ships’ emissions which will enter into force in January 2013 and that will apply to at least 90 per cent of the world’s tonnage.  This will greatly assist the industry in meeting its commitments for a 20 per cent efficiency improvement by 2020 and a 50 per cent improvement by 2050.

Global Shipowners’ Associations are united in the view that these matters should be considered within the IMO to avoid any regional solutions being applied which would undermine an international standard being established.  As the International Chamber of Shipping has pointed out, market based measures are controversial amongst shipowners but there is an argument that the high cost of fuel, which with the introduction of low sulphur fuel is now set to increase dramatically means that shipowners already have every incentive to improve their efficiency.  Governments must also avoid the possibility of a modal shift, as excessive costs added to shipping could see a greater use of less carbon-efficient shore-based transport modes which would generate additional C02.  Industry recognises it must play a constructive part in these discussions.  The clear preference of the majority of the shipping industry is for an IMO compensation fund linked to fuel consumption, rather than a system based on emissions trading.  This could also support research into further efficiency improvements in the maritime sector.  Importantly, any contribution must be proportionate to shipping’s share of total emissions and reports of a proposal for shipping to pay $25 billion a year to a green fund would be totally inequitable and seen by many as a tax on trade.

Education and training

The SAL Introduction to Shipping course continues to be attractive to those who are entering the industry for the first time and we saw considerable progress in 2011 towards the development of a more advanced e-learning course entitled Fundamentals of the Maritime Industry.  This will provide more detail and be more attractive for those who have had some initial experience but wish to advance their knowledge.

SAL remains very interested in upgrading skills and education for the maritime industry in Australia and we will follow very closely the deliberations of the Maritime Workforce Development Forum.

Young Shipping Australia

2011 was an eventful and productive year for Young Shipping Australia with both New South Wales and Victoria holding a number of well attended events. Highlights for YSA NSW include the annual CEO event with guest speakers Geoff Greenwood, managing director of Hamburg Sud and Nicholaj Noes, Managing Director of Maersk Australia who both provided some invaluable advice to the very receptive audience. Two other significant events held by YSA NSW were the PBLIS briefing and the overwhelmingly popular Intermodal and Container Logistics Tour which gave YSA members the opportunity to see firsthand the operations at P&O Trans Australia’s Yennora Intermodal Terminal and their Port Botany Logistics Terminal.

Membership for YSA Victoria reached an impressive 80 members as a result of the highly successful events held which included a tour of a RO/RO vessel, a station pier tour, port cruise and an information evening on hazardous cargo with guest speakers from AMSA and Maritime Law.

YSA has also been recognized with several members receiving nominations for the Lloyds List Australia New Generation award. Paul Alexander of SAL was the proud winner of the award for his work with both YSA groups and highly commended certificates were awarded to all nominees including Emmanuel Papagiannakis, YSA NSW chairperson and Jesse Van der Tang, YSA Victoria chairperson.

The hard work of both committees will undoubtedly continue into 2012 with many exciting events and a revamped presence on the new Shipping Australia website to help promote and spread awareness of YSA.

Shipping Australia is proud of the work and effort of both YSA groups and continues to support this fantastic opportunity for young professionals to foster networking and collaboration opportunities within the shipping industry.

Mental Health of Seafarers

This is a project started by the Rotary Club of Melbourne South, working with the Melbourne Port Welfare Association, BeyondBlue, the Anglican missions to seafarers and the Catholic Apostleship of the Sea.  The project has produced booklets (for masters) and leaflets (for non-officers) in four languages – English, Chinese, Tagalog and Russian – which covers about 85 per cent of all seafarers visiting Australia.  The publications feature checklists to identify depressed seafarers, how they can be helped, and telephone hotline numbers for assistance.

Distribution by ship visitors to seafarer centres started late 2009 in Victoria and in September 2011 by ships agents members of SAL who were instrumental in distributing the booklets in Dampier, Hedland, Fremantle, Adelaide, Kembla, Sydney, Newcastle, Brisbane, Gladstone, Mackay, Townsville and Cairns.  The material has been put on board about 2,000 ships with this total expected to increase markedly with other ships agents also distributing the booklets and leaflets.  There have been cases of seafarers seeking help as a result of these publications.  The Australian Maritime Welfare Society paid for the printing of an additional 5,000 of these booklets and leaflets and the project has been spear-headed by Robert Iverson, who was a former fishery biologist with the US National Marine Fisheries Service and now lives in Melbourne.

Other issues

Seafarer safety

During the year, SAL made a submission to the Seacare Authority regarding its 2015 review and I attended a seminar in Fremantle on how to avoid accidents on board vessels.

Cruise terminals in Sydney

The future capacity of Sydney to handle the future growth in cruise vessel visits continued to be discussed last year.  It has been estimated that up to half the cruise vessels visiting Sydney in 2015/16 may not be able to fit under the Harbour Bridge.  Action is being taken by the Sydney Ports Corporation to upgrade the Overseas Passenger Terminal and other strategies are being considered to try and cope with the surge in demand.  However, more long-term solutions are required and the Federal Government initiated a review by Dr Alan Hawke regarding the suitability of using the normal facility at Garden Island for another cruise terminal east of the bridge.  The results of that review are still pending.

Meanwhile, construction of a new cruise terminal west of the bridge at White Bay has begun which will replace the temporary facilities at Barangaroo.

I would like to take this opportunity of expressing my appreciation for all those representatives of our membership who give so readily of their time and effort in furthering the interests of the industry as a whole.  I am also very appreciative of the dedication of SAL staff including the state secretaries in Queensland and Victoria for often going “beyond the call of duty”.

Equally, we are greatly assisted by a very supportive board of directors and our chairman has provided strong leadership over the past six years.  I thank the directors, including Michael Phillips for his support and encouragement throughout 2011.  I look forward to working closely with the new chairman, Ken Fitzpatrick, and I am confident that we are up to the task of meeting the many challenges that we will undoubtedly face this year.

I mentioned last year that we could not exist without the support of all our members, including our corporate associate members and I express again, my very sincere appreciation of that support.

 

NSW SAL State Committee Policy Update

The year under review followed the pattern of previous years, with meetings being held to discuss matters of interest to members and increasing the profile of Shipping Australia and its activities.

Meetings of the committee were also held in the SPC Port Botany Expansion Office and the SPC project office located at the intermodal logistics centre at Enfield to enable members to view developments. The NSW State Committee under the chairmanship of Bill Rizzi, ably supported by Peter Creeden the vice chairman, were able to garner the interest of the membership of SAL, which was aptly demonstrated by the significant attendance of members at the meetings.

The committee is extremely grateful to Andrew Karas who represents the committee on the Sydney Ports Cargo Facilitation Committee, the port coordinator in Newcastle, Ian Dwyer and Port Kembla coordinator, Fiero Mammone for their tireless efforts in attending to industry matters on behalf of members.

Port Botany expansion

The 63-hectare third terminal named Sydney International Container Terminal (SICT) and the berths named ‘Hayes Dock’ has been handed over to Hutchison Port Holdings (HPH) for operator works. It is anticipated that the first ship will be on the berth in early 2013.

The State Government has announced that it is reviewing its ports’ strategy and has sought approval to expand Port Botany to handle 7 million containers a year. It currently has approval for 3.2 million containers per year.

Port Botany Landside Improvement Strategy (PBLIS)

The State Government has introduced regulations and mandatory standards in support of the Port Botany Landside Improvement Strategy.

After the final industry trial to allow stevedores and truck carriers to adapt to the new performance management framework, the system became fully operational with financial penalties on 28 February 2011.

Trucks visiting Port Botany are now fitted with a Radio Frequency Identification Device (RFID) which allows the capture the movements of each truck in the port precinct enabling measurement of truck turnaround time independently and more accurately. The truck tracking system went ‘live’ in May, empowering terminals to view the status of trucks. The transparency presented by this system is no doubt of great assistance to the terminals.

A preferred location for the Truck Marshalling Area, which will accommodate the marshalling of up to 50 trucks, has been selected and is expected to be operational during 2012.

Shipping Australia had continually supported the objectives of the strategy to improve productivity and efficiency of both truck and rail handling in the terminals, but had concerns that devoting resources to handling road and rail within stevedoring terminals may detract from the efficient handling of vessels. This concern was perhaps justified as the vessel productivity had been affected throughout the year. The loss in productivity cannot be totally attributed to the lack of allocating resources to handle vessels, as there had been considerable industrial issues with the labour force engaged at both container terminals.

Whilst the share of containers carried by road has increased over the years, it appears that the share of containers carried by rail has not kept pace with the increase in trade and is now down to 14 per cent of the total trade, compared to 21 per cent in 2005/6.

The previous state government had a target of moving 40 per cent of freight by rail; this has been now been reduced to 28 per cent.

The Federal Government had announced a new strategy aimed at improving the capacity of ports to cope with an expected tripling of trade in the next 20 years and prevent bottlenecks that have hindered export growth. This was welcomed by members, as it could accelerate work on NSW infrastructure projects such as the M5 expansion and other freight hubs around Sydney. To increase rail’s share of freight haulage, the national strategy recommends higher charges for road users. The strategy advocates state governments and port authorities having provision for buffer-zones, to protect corridors of access to ports.

The Council of Australian Governments has referred this matter to the Australian Transport Council (now called the Standing Council for Transport and Infrastructure) for consideration.

New Ports Minister

SAL has met with the Hon. Duncan Gay, who was appointed as the new Minister for Roads and Ports after the State election, to discuss issues affecting the shipping industry. SAL has had a close working relationship with him in the past, when he was Shadow Minister for Roads, Ports and Waterways between May 2007 and December 2008.

Privatisation of Port Botany

The State Government has announced plans to refinance state-owned assets at Port Botany and has commenced a scoping study to investigate proceeding to market with a 99-year lease. The funds raised will be used to fund infrastructure projects such as an upgrade of the Pacific Highway.

SAL will monitor the situation and endeavour to impress on the Government that price monitoring must be included in lease conditions, as there is little doubt that the buyer will be interested in a high return on investment. Members are apprehensive that port costs will escalate before the port is leased to encourage potential lessors.

Weigh bridging of containers

The Chain of Responsibility legislation imposes obligations on the key roles or positions within the transport chain to take reasonable steps to prevent breaches of the legislation. Currently, around 42 trucks per day are in breach of allowable axle weight limits (severe breaches).

SAL has been represented in a working group established to consider the problems that will be faced by the industry in NSW with regard to the proposed weigh-bridging of import containers and has met with the Minister for Ports. Given the congestion at the container terminals in Port Botany, members were pleased that the NSW RTA had agreed to implement the systems following the peak period at the end of the calendar year in order to minimise disruption to industry.

Both terminals are in the process of installing weigh in motion systems to meet the conditions of the improvement notices issued by the NSW RTA (now called Roads and Maritime Services).

Cruise shipping

153 cruise ships visited Sydney in the 2010/11 cruise season and it is estimated that there will be 214 vessels in the 2011/12 season. This number is expected to reach 450 a year by 2025.

Planning approval was given in early 2011 for the construction of a cruise passenger terminal at White Bay to cater for up to 170 ships per year, subject to a number of strict conditions, most significantly to protect community amenity.

The new State Government had conducted a review into the contentious Barangaroo development, when it came into power. The review supported the headland park backed by the previous government and the decision to relocate the cruise ship terminal to White Bay.

With the ever increasing sizes of cruise vessels, with a number of new vessels being unable to transit under the Harbour Bridge, the industry is very keen that a new cruise facility is built east of the bridge that could accommodate the needs of all cruise vessels. Members of SAL welcomed the Federal Government’s launch of a review into cruise ship access to Garden Island.

Port productivity

The committee had raised concerns with regards to berthing congestion and stevedore performance in Sydney, with the SPC and the terminals on a regular basis throughout the year. A working group was formed to identify and work on the main causes for the delays and poor productivity. Members have been providing SPC with individual stevedore performance data, which have been collated by SPC and gives an overall picture of the stevedores’ performance at the two terminals.

The delays at DP World following the introduction of a new operating system in November 2010 continued into the beginning of 2011.

Delays at the terminals had also been aggravated by atrocious weather experienced at Sydney in July, which resulted in the port being closed for about 68 hours; failing infrastructure (crane rails at Patrick); high trade volumes; a portion of the stacking area for containers being unavailable due to planned resurfacing; lack of labour due to sick and other leave;  and industrial action taken by the Maritime Union of Australia.

During this period Patrick had introduced measures to ameliorate the impact of these delays and vessel bunching with the goal of returning the terminal to normal operating mode, including vessel exchange being capped to below proforma volumes and empty evacuations being cancelled or reduced.

Asciano and DP World have now reached in principle agreement with the Maritime Union of Australia that will cover employees at its container terminals under a new Enterprise Based Agreement.

MUA is still negotiating with Patrick Bulk & General Stevedoring division as well as QUBE/POAGS. Following a breakdown in negotiations MUA members went on strike in December affecting POAGS terminals at Melbourne, Port Kembla, Fremantle, Port Hedland and Bunbury. This resulted in POAGS locking out 320 workers at Fremantle and Bunbury and Port Kembla on that day after claiming bans imposed by the Maritime Union of Australia had rendered parts of its business unviable.

Productivity remained an issue at Port Botany Container Terminals that had resulted in some shipping lines omitting the port and others choosing to put their freight onto rail between ports in an effort to prevent further delays to importers and exporters whose businesses rely on consistent services.

Moorebank Intermodal Terminal Facility

A feasibility study is being conducted into the potential development of an intermodal terminal at Moorebank to handle container traffic from Port Botany and interstate, with $70 million in Commonwealth Government funding.

It will look at the development of former defence land at Moorebank in three stages and will ultimately comprise of; a rail link connecting the site to the Southern Sydney Freight Line; an intermodal terminal with a capacity to handle up to 1 million TEUs per annum; warehousing and distribution facilities comprising approximately 300,000 m² of warehouses with ancillary offices; and a freight village of approximately 8,000 m² of support services.

Enfield Intermodal Logistics Centre

The operation of the Enfield Intermodal Logistics Centre has been awarded to Hutchison Port Holdings, which currently operates a number of intermodal centres across Asia and Europe, including inland container depots. Leighton Contractors which had recently completed early works at the site, which included the construction of a vehicular bridge over the adjacent railway marshalling yards and drainage and earthworks for the construction of a frog habitat area at a cost of $17 million, has been awarded a $115 million contract to deliver the main construction phase.

Expressions of interest will be called to lease out the land at Enfield, not controlled by Hutchinson, for construction of warehouses etc.

Southern Sydney Freight Line

The Australian Rail Track Corporation has begun construction on the Southern Sydney Freight Line, which will provide a dedicated freight line for a distance of 36 kilometres between Macarthur and Sefton allowing passenger and freight services to operate independently and improve the efficiency of rail freight services on the major rail corridor linking Melbourne, Sydney and Brisbane.

Northern Sydney Freight Corridor Program

The NSW and Federal governments have signed an intergovernmental agreement on the $1.1 billion jointly funded project to commence work on the Northern Sydney Freight Corridor program, which will commence in February 2012 and be complete by 2016.

The Northern Sydney Freight Corridor Program is an initiative to improve capacity and reliability for freight trains on the Main North Line between North Strathfield and Broadmeadow, Newcastle. The program will reduce the potential for delays on the rail network caused by freight and passenger trains competing for the same tracks between Sydney and Newcastle.

Other issues

This year’s Parliamentary Luncheon was hosted by the Hon. Duncan Gay, MLC, Minister for Roads and Ports. At the luncheon held in Newcastle the Hon. John Ajaka, MLC, Parliamentary Secretary for Transport and Roads gave the key note address on behalf of the Hon. Duncan Gay.

The Port Kembla Port Corporation and Newcastle Port Corporation will be providing reports and as such they have not been included in this report to

 

QLD SAL State Committee Policy Update

In October 2011 David Hislop (Hetherington Kingsbury) replaced Sharon Ralph (American President Line) as chairman of the SAL Queensland State Committee for a two year tenure.  David is now chair of the Steering Committee which comprises Sharon Ralph (APL), John Widdis (MISC), Steve Pelecanos (Brisbane Marine Pilots), Matt Hollamby (Patrick Terminals), Peter Keyte (Port of Brisbane) and Bill Guest as secretary. With Mark Austin (Mitsui OSK) relocating to Sydney his valuable input to the Steering Committee was lost and it is pleasing that Russell Stuart, now with Gulf Agency Co, has rejoined the committee.

The normal six bimonthly meetings for 2011 were reduced to 5 (with the cancellation of the October meeting) and consideration is to be given to just holding quarterly meetings with urgent/timing issues to be either handled by the Steering Committee or appointed sub committees.

Again SAL is grateful to the new port owners, the Port of Brisbane Pty Ltd (PBPL), for the provision of most venues and supporting services for State Committee meetings.

The routine of these meetings, commencing with presentations on issues relevant to the shipping and transport industries, continued. Presentations made included:

Paul Brandenburg (principal manager – vessel traffic management) of Maritime Safety Queensland (MSQ) provided details of the MSQ VTM system from development to the regional extension as a result of the Shen Neng 1 grounding in the Douglas Shoal area of the Great Barrier Reef.

Peter Keyte (general manager trade services PBPL) on the Brisbane post-flood recovery position. A great effort both by MSQ and PBPL in returning the port to full operation within five days of the January floods.

Jim Huggett (director pilotage and hydrographic services MSQ) presented arguments relating to the justification for increased Queensland port pilotage rates.

Russell Smith (CEO of Port of Brisbane Pty Ltd) addressed members and industry associates on the ‘Port of Brisbane – Opportunities for the Future’. While there were fewer presentations than in previous years the objective remains to ensure subjects of industry relevance to gain the most for members and invitees. Those invitees include senior representatives from the AC&BPS, AQIS and MSQ whose input adds further value to these meetings.

Overview

The 2009 decision of the Queensland Government to sell selected state-owned assets included the Port of Brisbane Corporation with a 99-year lease being awarded to Q Port Holdings (owners of the Port of Brisbane Pty Ltd) who took control in December 2010.

With a full year now under PBPL management it was unfortunate that the time started so disastrously with devastating floods which engulfed much of south east Queensland in January. While there was the inevitable apprehension about how any new owner would respond, it can be recorded that PBPL port management, with MSQ, brought the port back to virtually full working order within five days of the flood peak. Given the huge amount of debris (including 400 pontoons, 250 leisure boats, water tanks etc) deposited at the Fisherman Islands port entrance and the silting impact, the accelerated recovery was a real compliment to those involved and much appreciated by the shipping community. Of added relevance was the fact that port users were best placed to make business decisions by being kept fully up to date as the recovery phases progressed.

It should also be noted that the ‘baton change’ between the Port Corporation and private enterprise has been accomplished with only marginal impact on the SAL Queensland secretariat/membership. While the inevitable structural changes took place within the PBPL, lines of communication and cooperation with port management have remained open and constructive. Equally the PBPL have continued to be supportive of SAL major networking events.

Despite the flood impact (and that of the Japan tsunami) Brisbane cargo throughputs powered ahead both in imports and exports. Container volumes increased with the million TEU record mark (albeit empties included) being achieved in the latter part of the year. For exports, both cotton and coal dominated with import volumes (white goods and electrical products) benefitting from the strong Australian dollar. Further detail can be obtained from the PBPL website – www.portbris.com.au

On the downside, container ship owners/agents especially suffered as margins continued to be eroded. Service provision charges (port pilotage etc) increased with the addition elsewhere of various smaller ‘access’, ‘infrastructure’ and ‘facility’ fees which all add up!

The arrival of the third stevedore (Hutchison Port Holdings (HPH)) in mid 2012 should strengthen the competitive element and hopefully help to stabilise container handling costs. None the less those in the container trade are likely to do it tough for some time. That statement is supported by the decision of the Malaysian International Shipping Co. (MISC) to totally withdraw from the container trade by mid 2012!

2011 issues

Queensland Shipping Information and Planning System (QShips)
This web-based ship management system, made mandatory in 2009, has been progressively upgraded by MSQ and with input from the QShips User Group has become an essential tool for all involved with ship movements. MSQ are to be commended for the effort devoted to this project.

In conjunction with MSQ, the QShips data base has been utilised by the PBPL to develop the PortBris Vessel Tracker system. This system, which has been refined during the year, enables users to track vessels within port limits in real time. Data is displayed through Google Earth and users are able to click on individual vessels to obtain more detailed information. This system is extensively used by the PBPL with more (pilots, stevedores, surveyors) coming on board as the management value is recognized.

In the 2010 review it was noted that QShips users had been lobbying for the elimination of the Arrival/Departure Report which is submitted by agents who duplicate the same information within QShips. It is pleasing to advise that this report was abolished in late 2011.

SAL has also been pressing MSQ for the introduction of electronic invoicing (EI). Invoices from MSQ (pilotage and conservancy dues) are posted to agents for each ship in/out movement and there are obvious time and economic advantages by moving to an email process. It was accepted however that computer systems issues, associated with the amalgamation of the Department of Transport with Main Roads, would need to be resolved before the EI project could get any traction. That now achieved it is disappointing that little progress has been made even with suggested short-term solutions (scanned accounts being emailed to agents in PDF form) being rejected by MSQ. While MSQ have stated the difficulties in reaching the full EI process, SAL will continue to pursue to that end.

Harbour control

The success of the PBPL and MSQ with the flood recovery process has been acknowledged with members being kept informed of adjustments to the channel depths following dredging operations.

Other impacting issues in 2011 centered on mooring gang sizes and spacing between ships alongside.

Mooring gangs – this became both a safety and operational issue when Brisbane port pilots reported inadequate numbers within some mooring gangs. Understandably neither the PBPL or MSQ wanted to unnecessarily impose fixed numbers and, following a moratorium on the issue, the Port Procedures Manual was amended to reflect that ‘the master/owner of a vessel is responsible for the safety and number of mooring crews required to moor and unmoor his vessel safely’. There have been no adverse reactions from ship operators.

Spacing between ships – again for safety and operational reasons the regional harbour master considered it prudent to increase the distance between berthed vessels from 15 to 20 metres. Although there were initial objections from stevedores it was determined that the extra distance would not unduly impact ship operations. The new regulation applies from 1 January 2012.

Queensland ports pilotage

SAL members have had to contend with two rate increase in 2010 (April 10 per cent and Oct 10 per cent) and a further 10 per cent from 1 July 2011. Consultation has been intense with MSQ who have presented ‘justification’ costings which have included some ‘catch up’ inclusions. This has meant reluctant but inevitable acceptance although with the acknowledgement from MSQ that SAL would prefer lower more predictable rate increases over frequent (yearly) timing rather that substantial hikes over a longer period. Liaison with MSQ continues to be positive and it is expected that the next rate increase will not be before July 2012.

Star pilots

This organisation, which was set up in the interests (safety and fatigue) of pilots transiting the Great Barrier Reef and Torres Strait, remained ‘on hold’ in 2011. That position will continue at least until the completion of the Australian Transport Safety Bureau (ATSB) study into pilotage operations within the GBR. The study results should be presented in early 2012.

Meantime it is worth noting the increased GBR coverage of MSQ Vessel Traffic Management which was extended south in mid 2011 as a consequence of the Shen Neng 1 grounding on the GBR Douglas Shoal in April 2010.

Port incidents – PBPL

Apart from the well documented flood impact and recovery operation there were no major Brisbane port incidents during 2011.

Brisbane port security – PBPL

It might well be that the absence of any threat (terrorist or otherwise) has created a more relaxed attitude by those holding a Maritime Security Identification Card (MSIC). The Federal Government remains focused however and in December 2010 introduced an updated list of background check offences which would prevent certain applicants from acquiring an MSIC.

Additionally the outcomes from a more recent Federal Parliamentary Joint Committee Review has suggested even tighter controls by making it mandatory for all employees of a company to hold MSICs even if only a single employee needs one for business purposes. This has been rejected by the shipping industry and remains under debate. Meantime with the approach of the five year expiry period for the original uptake Office of Transport Security (OTS) inspectors are to issue infringement notices and fine those within a security zone who do not hold a valid MSIC.

If your MSIC is close to expiry then renew it! 

Landside Logistics Forum (LLF)

Initiated and chaired by the PBPL and includes industry stakeholders with the main objective of improving transport efficiencies within the port environs.

LLF/PBPL initiatives for 2011 included:

a)  An automated weighbridge being established at the Brisbane Multimodal Terminal (BMT). This was in recognition of the risks involved in the road transport of ‘perceived’ overweight containers into or out of Fisherman Islands. More recently approval from the Queensland Department of Transport and Main Roads (DTMR) was close to being given for the movement (via ongoing class permits) of such containers within the port environs. This will reduce the onus on Fisherman Islands terminal operators from having to install their own weighbridges to mitigate chain of responsibility issues.

b)  Problems associated with container park congestion were thoroughly examined within this forum. Suggested solutions were numerous but what favoured one section was not acceptable to another and with any form of vehicle booking system (VBS) being rejected by container park operators. A unanimous agreement to work on improved communications was endorsed and bolstered by the use of the 1 Stop messaging system.  The visual position was also           enhanced by added CCTV (webcam) coverage at the entrance gate of a major Fisherman Islands container park.

c)   An update to ‘A guide to the Efficient Movement of Containers at the Port of Brisbane’ was completed at end 2011.

A major item for the LLF agenda is to determine transport planning for the future.  With cargo volumes doubling over the next 10 years – how to cope/plan for both road and rail? Rail especially requires early attention as cargo movement to the port travels through the passenger network which will also feel the strain of increased volumes.  Possibly a new rail corridor to the port?

Queensland Transport & Logistics Council (QTLC)

Although statewide, the QTLC objectives (promoting the efficiency and development of Queensland transport and logistics) are aligned  with those of the LLF with whom close working relations occur. By end 2011 the QTLC was close to completing the Queensland Integrated Freight Strategy which should be launched early in 2012.

It is appropriate to congratulate Dr Rebecca Michael on her recent appointment as CEO of the QTLC.

Australia Customs and Border Protection Service. (AC&BPS).

SAL values the presence of senior AC&BPS representation at SAL State Committee meetings. This was especially relevant when discussing AC&BPS attendance of first port ship arrivals at which times they represent the Federal Department of Immigration & Citizenship. An SAL member had been severely reprimanded for a ship’s master proceeding ashore before the Immigration Clearance was issued. This despite no Customs presence until some nine hours after berthing!

While acknowledged that no crew member is to leave a ship before the Immigration Clearance is issued, matters of timing and flexibility were also affirmed (minuted) for mutual acceptance.

SAL was pleased to be represented on a group focus panel to revitalize and rebrand the AC&PBS Frontline publication. The end product ‘Customs Watch’ was launched late in 2011 with the objective of improving the security and commercial interests of the Australia community by intercepting prohibited substances at the border.

The public are encouraged to use 1800 06 1800 to report any suspicious behaviour.

Australian Quarantine & Inspection Service (AQIS)

AQIS personnel regularly attend State Committee meetings and SAL is supportive of their risk assessment approaches and the objective to maximize electronic initiatives to gain added efficiencies.

Speedier clearances for at-risk Giant African Snail (GAS) containers have resulted as has a more streamlined and centralized Pratique Documentation Clearance (PDC) process.

It is believed that the Federal Government decision to absorb AQIS within the Department of Agriculture, Fisheries and Forestry (DAFF) will add further productive reforms which include more partnership agreements with industry.

Coastal cargo

The restrictions of coastal cargoes being lifted by international trading vessels has been more thoroughly covered in the CEO’s Report and especially the impact of the Fair Work Act. From the local perspective the Queensland Government has recognised the need for an intrastate shipping policy due to the more frequent pressures on both road and rail infrastructure and extreme weather events (floods etc) in the north of the state. 2012 will see this policy being developed through the Queensland Department of Transport & Main Roads..

Training

SAL supports industry training and while the two-day face to face ‘Introduction to the Maritime Industry’ courses will no longer be held, that course is to be converted to a web-based format to be available in early 2012.

Events

With the dearth of corporate events, SAL continued to hold networking functions for the membership and shipping community during the year.

In April the SAL Golf Day was held at the Pacific Golf Club in Carindale and in October the 20th Anniversary SAL Shipping Industry Ball at Moda Events Portside was attended by 326 for a memorable evening.

In December SAL was additionally fortunate to have Russell Smith (CEO of PBPL) address members/industry at a luncheon. His presentation ‘The Port of Brisbane – Opportunities for the Future’ provided valuable insights of PBPL forward planning.

Initiatives to get Young Shipping Australia (YSA) underway in 2011 stalled but plans are in place to initiate activities in 2012.

2012 objectives

Any perceived concerns over the privatisation of the Port of Brisbane have not come to fruition and working relations with the PBPL remain satisfactory. Indeed SAL is appreciative of the support and cooperation of port management.

The SAL secretariat will continue to
assist members to legitimately resist or mitigate cost increases. Aspects of ‘justification’ are to be questioned as earlier noted the number of ‘ancillary’ service charges is on the increase.

 

SA SAL State Committee Policy Update

South Australia has a mainland coast line of 3,816 km with nine commercial ports.

Flinders Ports Pty Ltd operates the following six ports under a lease agreement with the South Australian Government: Port Adelaide, Thevenard, Port Lincoln, Port Pirie, Wallaroo, and Port Giles.

Ardrossan is owned and operated by Viterra Limited. Port Bonython is operated by Santos. Whyalla is operated by Onesteel Manufacturing.

Currently there are fifteen owner or liner agents and seven bulk/tramp ship agents based in Adelaide.

South Australia State Steering Committee effective 1 January 2012:

The SAL steering committee consists of Mr A Brundish, Five Star Shipping and Agency Co Pty Ltd (chair) together with Messrs G Rose, Hetherington Kingsbury Shipping Agency (vice chair); and P Bates, Mitsui OSK Lines (Australia) Pty Ltd; I Henderson, Hamburg Sud Australia Pty Ltd; P Paparella, Asiaworld Shipping Services Pty Ltd.

The SAL Steering Committee continues to meet on both a regular and when-required basis, to promote a close working relationship with the Australian Customs and Border Protection Service (ACS); Australian Maritime Safety Authority (AMSA); DAFF – Biosecurity (DAFF); SA Department for Transport, Energy and Infrastructure (DTEI) and Flinders Ports SA (FPSA).

Members serve on the SA Freight Council (SAFC), Executive Committee (Chair/Vice Chair) and the Container Terminal Monitoring Panel (CTMP).

State Committee Meetings continue to be held quarterly at Flinders Ports premises. Flinders Ports also convene a quarterly meeting for agents for which the minutes are distributed to all shipping companies and agents.

Projects/matters that have been raised and are still to be resolved during 2012:

Department of Agriculture, Fisheries and Forestry – Biosecurity

•    Problems supplying vessel hold inspectors and grain terminal labour, when the grain season/shipping program is in full swing.

•    Inspection of grain vessels at anchor so as to be granted permission to load prior to berthing.

We are hoping both of the above matters may be solved with the outcome from the Ministerial Task Force which was conducted during 2011 and ongoing at the time of preparing this report.

SAL are hoping the introduction of AAOs (AQIS approved officers) will alleviate any labour shortage issues and result in the commencement of vessel grain loading inspection at anchorage.

If a vessel is able to conduct full/all surveys whilst at anchorage it will improve the ship’s turnaround time once alongside and improve the shore side loading productivity.

SA Department of Environment and Natural Resources

Due to public pressure South Australia’s newly appointed premier, Mr Jay Weatherill has requested a complete review of the proposed South Australian Marine Park Management Plans.

SAL were awaiting for the review outcomes at the time of preparing this report.

Year under review

Container Terminal Monitoring Panel (CTMP):

Messrs I Henderson and K Fox are the SAL representatives on this committee along with a broad cross section of the industry.  As the minutes of these meetings are not for circulation, the SAL representative on this committee provides a general update for members as and when required. Any issues from the CTMP are raised at each quarterly SAL meeting.

Functions:

SAL incorporated a Christmas luncheon with invited guests into the quarterly meeting held on 8 December 2011. SAL-SA Division was able to make a small donation to the local British and International Seafarers Society with the proceeds from the luncheon.

Port Security

Flinders Ports manages all security issues and any issues are bought to the industry’s attention in a general update as required and the subject is also raised at SAL’s quarterly meetings.

Berth Updates

Berths 1-4 Outer Harbour – This whole area, including Passenger Terminal (Berth No. 2) is now to cater for handling cars, Ro/Ro operations and cruise ships. Other vessels may lay up at these berths for repairs and cleaning but no other cargo operation is generally accepted at these berths.

General Items: 2011 cargo volumes

Motor vehicles (units)
Imports:               35,870
Exports:               13,298

All Cargo (metric tonnes)
Imports:               6,691,117
Exports:               16,559,857

Number of port calls for 2011 was 1848.

Berths 6 and 7:
(DP World container terminal)

Additional pavement for IMX operations was completed in January 2011. Since then no major capitals works projects have been undertaken in the past 12 months. Four straddle carriers, two reach stackers, two empty container handlers and three RAM revolving spreaders were commissioned through the year for IMX operations. Operational labour increased by 16 per cent during the past 12 months to facilitate manning nine crane gangs every 24 hours

Liner Shipping

Volumes continued to increase with 246,992 full TEU loading through the container terminal in 2011.

In late 2011 MSC announced they would adjust their direct European service – Euro Service to call Gioa Tauro (Italy) and relay European exports through this Mediterranean hub. In early January, MSC announced they would commence calling Adelaide on their Capricorn Service. This service is likely to attract Asian imports as well as New Zealand exports (coverage of North and South Islands) and has the ability to hub North American cargo through New Zealand ports.

The terminal currently has five weekly services and the size of the vessels calling Adelaide has increased considerably in the past 12 months, up to 4500 TEU capacity.

Other berths

Berth 8 Outer Harbour - (Viterra Grain Terminal) – This purpose-built Panamax capable grain loading berth was opened on 21 January 2010 and is now fully functional.

Osborne Techport Australia Inner Harbour (Defence SA owned)] - The Australian Air Warfare Destroyers (AWD) are being constructed in this area.

Osborne No 1 Inner Harbour - This berth is used for chemical tankers.

Berth 29 Inner Harbour - The new BHP Billiton 10,000 m2 shed, roads, weigh bridge and rail network is now complete. Flinders Ports has decided that this berth, wharf area and surrounding land will be used as a bulk precinct. The precinct will handle heavy metal consentrates (hmcs) and iron ore for export plus import bulk shipments such as sulphur, which is used in the mining industry.

Exports of hmcs and iron ore will be done by using three-quarter height containers fitted with lids which will be loaded using a mobile shore crane purchased by Flinders Ports and adapted with a rotating spreader. The first vessel to load utilizing the new crane and three-quarter height container was the MV Minervagracht on 8 February 2012.

No. 29 berth has previously been the preferred berth to handle scrap steel,  livestock and other vessels where the operations involved a large number of  truck movements (including B Doubles) as the wide wharf apron is suited for good traffic management.

Shipping Australia is concerned that as vessel traffic for hmcs and iron ore increase general cargo and bulk vessels will be restricted from using No. 29 berth. General cargo and bulk vessels will then only have berths 18, 19 and 20 available to perform operations which will create difficulty to perform some operations due to these wharves having a narrower wharf apron.

Whilst 18, 19 and 20 berths are in a line they only give a total length of 509 metres meaning three large vessels cannot berth alongside at once. Over the years general cargo tramp vessels have lost the ability to use wharves at 1 – 4 Outer Harbour (now dedicated to motor vehicle imports/exports). If they lose the ability to use No. 29, it leaves only three berths remaining for bulk ships and general cargo ships operations.

Regional Ports

Thevenard handles the most variety of cargoes compared to other bulk loading plants/berths in South Australia. Unfortunately the entrance channel is only 8.2 metres deep placing a restriction on the amount of cargo a vessel can lift.

Port Lincoln – Mainly imports petroleum products and fertilizer with main exports being grains and seeds. Centrex Metals was looking at using the main jetty in Port Lincoln to export their iron ore however Centrex is now considering building a purpose built loading facility at Sheep Hill which comprises of 260 acres of land located  approximately 21 km north east of Tumby Bay. Centrex proposes to develop a multi-user deep water bulk commodities port facility at the site. The site was chosen due to the close proximity of deep water (20 m) capable of loading Cape sized vessels. The distance from the shoreline to this depth is only 500 metres. This would allow loading of vessels of >160,000 tonnes capacity with bulk commodities. Currently, South Australia has no ports capable of loading such volumes. The port is said to be named  Port Spencer. Centrex is also considering other users for this facility.

Whyalla – Mainly imports dolomite and coal and exports iron ore and iron and steel. Project Magnet whereby Cape-size vessels are loaded off shore in Spencer Gulf using barges has been operating successfully for a number of years now with future expansions planned.

Port Bonython – Mainly exports crude oil, condensate, propane and butane.

Due to the mining boom a number of mining companies are looking at ways of exporting their products but currently South Australia lacks such infrastructure.

The Spencer Gulf Port Link Consortium are looking at building a loading facility at Port Bonython. The proposal would be to either to modify the existing wharf used to load Santos products or build a separate wharf to convey ore to the ships. We understand there may be marine-related environmental issues to be addressed as this area is a major breeding ground for the Giant Cuttlefish.

Port Pirie – Main imports coal, hmcs, parageothite. Main exports, hmcs.

Western Plains and Flinders Ports P/L signed an agreement to ship ore through Port Pirie. WPG Resources planned to spend $50 million-plus on a train unloading and storage facility for export of their iron ore.  However following the sale of their iron ore assets in July 2011 the project has been put on hold.

Unfortunately the entrance channel is only 6.4 metres deep placing a restriction on the amount of cargo a vessel can lift.

Port Giles – Main exports grains and no imports. It is a grain loading facility capable of loading Panamax vessels with a restriction of daylight berthing only in place. Unfortunately due to volumes and seasonal nature of the port it does not pay to position tugs on site, so tugs to handle ships in Port Giles have to transit to and from Port Adelaide. Port Adelaide vessel movements take preference over any movement requirements at Port Giles. The same applies for the port of Ardrossan. This has resulted in some vessels having faced lengthy delays in obtaining tugs because the tugs were occupied elsewhere during daylight and when the tugs did become available it was night and vessels can only berth at Port Giles in daylight. We understand Flinders Ports is aware of this issue and they are reviewing the daylight berthing only procedure in an effort to avoid costly delays to shipping and SAL is appreciative of this review.

Ardrossan – main exports dolomite and no imports.  Dolomite is exported by Onesteel on both international and coastal vessels.

The port is operated by Viterra Limited. Due to the port’s parameters, vessels of particular configuration/specifications are best suited to call this port.

Wallaroo  – Main import cargo is fertilizer. Main exports grain and seeds.

Wallaroo is located in a large grain growing area with a major grain silo complex. Unfortunately entrance channel and berth depth places restrictions on the amount of cargo a vessel can lift.

South Australia’s 2011 grain harvest was estimated to be 7.9 million tonnes, the fourth largest on record.

Future port infastructure

Mining exploration is at an all-time high but there is no infrastructure in place at areas close to mine sites to handle future export products. The mining industry prefers deep water ports with belt loading facilities capable of loading cape size vessels  quickly to reduce handling and transport costs.

Most Australian ports have dredged channels to make them deeper for the new generation container ships, but some channels that handle tramp, bulk and general vessels have been left unchanged.

Ports must attract container operators where as tramp, bulk and general cargo business is somewhat captive where import vessels have to call at the port/s declared in the charter party to discharge and often with exports the nature of the cargo and costs restricts the positioning of the cargo to a more efficient port.

Shipping in South Australia needs to go to the next level. The infrastructure in place has served the state well over the past 30–40 years but, it will not serve the shipping industry’s demands for the next 30 years and this matter needs to be addressed.

We still have ports for which we cannot load a full load of grain on a handy max vessel which results in a two-port call, which is expensive and adds to taking away Australia’s competitiveness.

Ships have got larger, drafts deeper, lifting more cargo and the infrastructure needs to be altered or new infrastructure added to handle such vessels and cargos. One must also remember the lead time to put these facilities in place is lengthy.

 

VIC SAL State Committee Policy Update

Office bearers

At its meeting on 13 December 2011, the Victorian State Committee unanimously re-elected Peter Bartlett, state manager of Asiaworld Shipping Services as its chairman for 2012. Kon Makrakis, state manager of Mediterranean Shipping Company (Aust) Pty Ltd, was elected vice-chairman.

Immediately upon his election, Peter Bartlett paid tribute to the retiring vice-chairman Rodney Begley, thanking him for his dedication and enormous contribution throughout the previous five years as vice-chairman, chairman and yet again as vice-chairman in 2011.

Meetings

The Victorian State Committee (VSC) comprises the senior officers in Victoria of all member lines and agencies and by invitation, corporate associate members. It meets at two-month intervals.

Our State Committee meetings have been enriched by the presence of AQIS (DAFF Biosecurity) and AMSA representatives, who also regularly attend by invitation. This facilitates the understanding and resolution of all tasks of mutual concern.

The Victorian Steering Committee comprises six members with expertise in a broad range of shipping related areas. It meets on alternate months to VSC and is the source of SAL representation on a number of State Government departmental committees and working
groups.

Membership of ‘outside’ and port-related working groups

Victorian Freight & Logistics Council (VFLC)

VFLC is funded by both State and Commonwealth Governments, is chaired by a senior industry figure and maintains an independent secretariat. At the invitation of the Victorian Government, David Munro (ANL Container Line) has been a VFLC member since its formation in 2005.

There are two other committees established under the aegis of VFLC in which SAL Victoria is involved:

Infrastructure Working Group (IWG),

Formed originally as the Channel Deepening Working Group and most successful in that role, IWG’s  role was broadened to ascertain and report on the condition and adequacy of road and rail infrastructure both in metropolitan and regional Victoria. Peter Bartlett has represented SAL since 2009.

Freight Intermodal Efficiency Group (FIEG)

The prime objective of this group is to generate ‘whole of chain’ input and collaboration between industry and government to identify and recommend practical operational improvements to intermodal efficiency across Victoria’s freight and logistics system. Tony Keunen (MOL) and Phillip Edgley (Five Star) jointly represent SAL.

Among the topics studied and pursued during 2011 were:

•    Freight Infrastructure Charge and its proposed replacement Port Licence Fee.

•    Growing freight on rail with consequent feedback to industry.

•    Food quality container shortages for grain cargoes.

•    Industry engagement with Department of Transport to improve communications between the two organisations.  It is anticipated that FIEG will be given advice in advance of proposed government studies to enable it to fulfill its role of providing timely advice by its parent body, VFLC.

•    Empty container parks and implementation of ContainerChain system.

•    Port of Hastings development workshop.

Whole of Port Health, Safety & Environment Committee. (WoPHSEC)

This group is hosted by PoMC and comprises a wide range of business and support services within the port of Melbourne. Most of its delegates have a connection with OH&S or the environment. Mike Dawkins of Hamburg Sud represents SAL.

Customs Logistics Chain Consultative Committee, Victoria (CLCCC Vic)

The Victorian Regional Office of the then Australian Customs Service established this committee in order to harness the goodwill and expertise of all industry-related organisations which have some reliance on Customs procedures.

Expert in this and in other wide-ranging fields, Meredith Adams (MOL) and Mark Molloy (Five Star) jointly represent SAL.

Engagements with Department of Transport (DoT)

There was reason for the State Committee to engage with the incoming Minister for Ports and senior officers of DoT on two occasions during the year.

(1) The previous government plan to introduce a Freight Infrastructure Charge (FIC) drew adverse comment from virtually all sectors of the delivery chain. SAL expressed its full support for the Victorian Transport Association’s and exporters’ and importers’ argument that there was a complete lack of transparency as to where these funds, amounting to $1 billion generated over 10 years, would be expended. Moreover, the proposed methodology for collection was cumbersome, to say the least, and unjustifiably, the onus would be upon cartage contractors in a highly competitive environment, to recover the FIC from their clients.

In its submission, SAL also argued against the intention for empty container movements being included in the charge, pointing out their role as ship’s equipment inherent in the containerisation concept. Empty containers provided facilitation for exports and imports, incurring re-positioning costs without generating revenue. This argument was rejected without any explanation of the rationale behind the decision to impose the FIC on empty containers.

With the advent of a change in State Government came an announcement by the Minister for Ports, that the FIC concept would not proceed. However, the Minister for Ports gave a forewarning that prior to the election, Treasury had already included the anticipated revenue in its Forward Estimates and it would be necessary to replace the FIC with a scheme which would generate a similar sum, viz $1 billion over ten years.

Towards the close of 2011, it was announced by PoMC that the replacement scheme would take the form of a Port Licence Fee (PLF) and that PoMC would shortly announce its proposal as to the methodology for its collection. This advice quickly followed.

Having assessed the alarming impact of increased port charges and grey areas in relation to the predicted yield, SAL and some of its members have since made submissions to PoMC. There are grave concerns which have been succinctly outlined in Viewpoint in the early part of this edition of the SAL Magazine.

It is anticipated that PoMC will provide an opportunity for frank discussion during the month of February 2012.

(2) The Feasibility Study into the possible relocation of the port of Melbourne Car trade and some break-bulk cargo to Geelong Port has caused much consternation amongst on overwhelming proportion of stakeholders.

Readers will recall that this topic and the disadvantages of such a re-location were the subject of my article published in the Summer edition of this magazine. SAL and several of its members made submissions urging Government to reconsider its goal in light of the many financial and logistical detractions if the relocation were to proceed.

It is understood that the Minister for Ports, Regional Cities, Major Projects and Racing will announce his decision in the first quarter of 2012.

Efficacy of Empty Container Parks (ECPs) in and around Melbourne

Following upon the work commenced early in 2010, PoMC continued to host meetings of the ECP Working Group, the break-through manifesting itself in the staged introduction of the ContainerChain electronic system of data exchange. By the end of 2011, nine of 11 parks have connected to the system. It can be said in confidence that all parties are experiencing the benefits of transparency made possible by data exchange.

There remains room for improvement in all sectors and for its part, SAL has again emphasised to lines, the importance of adopting EDI messaging.

Container trade through the port of Melbourne

Despite prolonged global anxiety in the fiscal scene, the port of Melbourne continues to reflect steady growth in trade through the port, particularly notable in containerised cargoes. In summary, a comparison of the calendar years ending 31 December 2011 and the previous year portrays increased volumes with no signs of stalling. The following data does not include empty containers either imported or exported.

•    For the calendar year ending 31 December 2010, total full TEUs passed through the port numbered 1,863,387.

•    For the calendar year ending 31 December 2011, total full TEUs numbered 2,004,274.

This indicates a 7.6 per cent increase in container trade in the immediate past year and strengthens the view that in light of population growth and the 15 years of remarkably similar sustained growth just prior to the 2009 global downturn, planning for additional handling capacity within the port of Melbourne should proceed without inordinate delay.

SAL has already made its concern known to State Government that the uncertainty for the development of Webb Dock could hinder sea carriers’ ability to introduce even larger and longer container ships. A prompt decision in the affirmative would also provide an opportunity for a third container terminal operator to compete at major Australian ports in the area of stevedoring charges and productivity.

SAL has profound confidence in PoMC to provide facilities which will optimise the port’s capacity to handle predicted trade over the next 15 years and perhaps beyond that time.

The port of Hastings, Western Port

The Victorian State Committee was pleased to learn late in the year that preliminary planning has commenced for the development of a container terminal at the port of Hastings. Forward projections for growth in container trades indicate a need for an alternative port of discharge circa 2025 and it is assumed that the newly-appointed Port of Hastings Authority already has this date in mind.