DCN0718_Combined_150

COASTAL SHIPPING
Above: Captain Steve Pelecanos, managing
director, Hermes Maritime
“Queensland is the most decentralised
state,” he said.
“The Queensland coast is serviced by
the Bruce Highway where governments
have historically pumped money into
keeping it maintained.”
He also noted the railway lines in
Queensland are losing money and
are heavily subsidised by the state
government.
“We found people who moved cargo
up and down the Queensland coast had
little choice – moving cargo by truck is
expensive, moving cargo by rail is less
expensive but poor service.”
Their plan is to begin operations with
a Brisbane –Townsville shuttle.
“We want to get the company in,
get our procedures in play and iron
out any difficulties. A good reason we
are looking at Brisbane – Townsville
is that Townsville is a hub for North
Queensland,” he said.
“In extreme weather events, you have
got rail washout, you have got closures to
the Bruce Highway and Townsville and
the north gets cut off.
“Once the cyclones have passed
there’s a backlog of cargo that takes
months to clear.”
“By adding a shipping service local
communities can keep going,” he said.
“Part of our strategy in sourcing cargo
is to approach those companies that have
historically suffered or been price-gouged
as a result of extreme weather events.”
WHY NOW?
Captain Pelecanos said a depressed global
shipping market made it an opportune
time to secure a ship, with chartering
costs low.
He also noted studies suggesting that
from 2015 to 2035 the domestic freight
task is likely to grow 3% year on year.
“When you think about that, that
means in order to accommodate that
doubling of the freight task, you have got
to double the number of trucks and double
the number of rail freight,” he said.
“The Bruce Highway and metropolitan
transport corridors can’t cope with the
trucks that we’ve got now. Can you just
imagine doubling it?
“On top of that, trucking and rail now
costs the government annually $26.3bn
to maintain road and about $13bn to
maintain rail.”
He noted also the average age of truck
drivers is increasing.
“The average age of the truck driver is
61. Trucking companies just can’t get the
drivers for long haul as the truck driver
wants to get home every night,” he said.
“Even if trucking companies
double the number of trucks to cope
with (the added freight task), they can’t
get the drivers.”
THE ROLE OF UNIONS
Captain Pelecanos believes the unions
and Hermes are on the same page.
“The maritime unions have suffered
a lot in recent years with job losses and
loss of members.
“We find they are very business-like
now,” he said.
“It’s fair to say, not only the unions,
but everyone in the maritime sector
has learnt the lessons of the past. I
think there is a will now, on behalf
of everyone involved in the shipping
industry… to move on and develop
a coastal shipping service that can
properly serve the nation.”
COASTAL SHIPPING: FAST FACTS
• There are currently 50 vessels with
a coastal shipping General Licence
• Eight ships that work in/across
Bass Strait
• Five dry bulk carriers
• Five expedition cruise ships
• One research vessel
• Thirty-one servicing Northern
Australia
• Some companies that currently
operate in this space include Toll,
Searoad Shipping and Bass Island
Lines (a subsidiary of TasPorts,
the Tasmanian governmentowned
ports operator)
• Examples of services that came and went
include Agility Shipping, an operation
that moved cargo on Bass Strait in 2010-
11 before ceasing operations. Its vessel,
the Andrea, suffered technical problems
and competition with existing operators
made the business of making money
difficult
• Changes introduced by the former Laborgovernment
of Julia Gillard (and driven
by then infrastructure minister Anthony
Albanese) in 2012 aimed to revive both
coastal and Australian-flagged shipping,
but (and the reasons are contested)
failed to have the desired impact
• In an interview earlier this year to mark
his retirement, former ANL manager
director John Lines said he would love
to have run a coastal service in Australia
Source: MIAL and DCN archives
Steve Pelecanos
32
First published in 1891
July 2018 thedcn.com.au