Ships have been getting bigger and bigger over recent years. Vessels that were once seen as innovative in terms of their size and capability are already on the list of “the former greats” as newer and larger ships are developed, taking the industry’s trunk routes to new heights in scale and sustainability.
For many in the industry, this development in terms of increased size and capability is not only a reality, but a necessity if shipping is to continue to grow and remain competitive as an important service and major contributor to the global economy.
Australia has fallen behind other parts of the world
Australia however remains behind many other parts of the world due to a range of challenges that prevent the very largest ships making their way to our ports. Whilst an answer to the many issues will not be found overnight, many experts believe that these conversations need to be had sooner, rather than later, if Australia is to remain competitive in market as the future of larger ships continues to look bright.
Andrew Jena, Director of Operations with the Melbourne-based shipping operator ANL says Australia needs to have “blue sky thinking” and to “look to the future” if it is to remain competitive and continue to thrive in the shipping world. He says that without future thinking Australia is in danger of being left behind.
The big ships here already; the right infrastructure must be built now
“These big ships are already here,” he says. “They are available and are operating successfully in other parts of the world. For example, 20,000+ TEU vessels operate on large trunk routes, and while the Australian equivalent is moving towards the region of 10,500 TEU we need to prepare for the future.
“This is about evolution. This is a generational change that is happening in the shipping industry. It is similar to what happens with aircraft or cars. New improved models emerge, and the old ones get superseded. It is evolving and improving all the time as far as the vessels are concerned. We need to plan for this and prepare for the changes that will be inevitable.”
Mr Jena says that aside from the need to keep up with the changing times, an eventual challenge will be that there will not be as many smaller vessels built anymore.
“Ship builders are going to focus on where the demand is and there are already many clear advantages to adopting the newer generation, more technologically-advanced and environmentally-friendly larger vessels. We need to start developing the right infrastructure at our ports now.
“As a result of this, eventually our options in Australia are going to be limited if we cannot receive the increasingly popular larger vessels. No one is going to want to continue using older, smaller vessels once they have come to the end of their life and it is going to become more difficult to find smaller ships.”
A growing population will drive demand for even bigger ships
As the population grows so does demand for product that often arrives by sea, being one of the most efficient and economic ways to transport goods.
According to the Australian Bureau of Statistics it is expected that Australia’s population will be almost 36 million by 2050, a statistic that many in the industry say cannot be ignored, putting increased demand on the volume of cargo that will need to be brought into Australia.
The advantages of operating bigger ships not only addresses the projected increase in demand but according to Anthony Orgill, General Manager for Asia ANZ lines at ANL, also ensures shipping remains economically competitive within the supply chain.
“We are going to have to go bigger if we want to remain competitive in terms of the supply chain,” says Mr Orgill. “The biggest danger if we don’t is that the increased costs of transport will be passed on down to the consumer, which is ultimately not good for the economy as we won’t be able to compete from a pricing standpoint.”
There are more challenges in New Zealand as the population is smaller and so therefore the argument in terms of investing in being able to accept larger vessels in port is tougher, however the appetite remains strong.
Gary Carter, General Manager at ANL New Zealand says the interest in larger vessels surrounds the country’s strong export capabilities.
“It’s not so much about how much we can bring into the country, but more about how much we can export. We probably have a few more challenges to deal with here, but the fact is the bigger ships will be coming here in time and we will need to be ready.”
Commercial Manager for ANL’s Pacific Island Trades, Steve Austin agrees, but says the biggest challenge will be infrastructure.
“It will require major change,” Mr Austin acknowledged, “and no one is leading that conversation yet. It will require a collective effort in terms of the roads, trains and ports but we need to think about where we will need to be in the next 10 to 15 years in this industry and the type of vessels we will be able to receive in the Pacific Islands, Australia and New Zealand.”
The benefits of larger vessels being deployed however stretches beyond the economy, with the environment also standing to reap rewards from more big ships being out at sea.
Shane Walden is Managing Director of CMA CGM Group Agencies ANZ and has been in the industry for 20 years. He says the environment stands to benefit from the introduction of bigger ships and will continue to be a focus for CMA CGM due to its commitment to doing as much as it can in terms of making positive environmental changes.
“Of course, from a commercial perspective there is no question that bigger ships bring down costs, which benefits everyone within the supply chain. We need to be able to accept the next class of ships in our ports in the next two years. There is a direct flow on effect to the economy from being able to have bigger ships come to Australia and so this need to be addressed.
“But for us it is not just about size. It’s about efficiencies and sustainability. By 2050 the group is committed to being carbon neutral which includes the adoption of alternative fuels. The new ships that are being developed are not just bigger but are being designed with a more sustainable focus.”
All the experts agreed that it would take some time to address the changes required to have larger ships come to Australia, but the over-arching consensus is that bigger ships will need to arrive, and planning needs to start now.
“Shipping lines will eventually have no choice but to use the larger, more modern ships,” said Mr Jena, “so there has to be more long term thinking around this issue.
“Ultimately bigger ships will become the norm and it is about time we start planning for this as it should not be underestimated the enormous contribution shipping has on the local economy. It’s time for us to have these conversations and invest in the future. The future is bright. Let’s not get left behind.”
This article was contributed by ANL & CMA CGM Group Agencies (ANZ), a subsidiary of CMA CGM, which is a Shipping Australia full member.