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First published in 1891<br />

October 2018<br />

thedcn.com.au<br />

The voice of Australian shipping & maritime logistics<br />

The big<br />

rethink<br />

Low freight rates and<br />

high costs are prompting<br />

changes on the North<br />

America trades<br />

38 Diversification push for<br />

Australia’s regional ports<br />

42 Preparing for bigger<br />

ships in SA and the NT<br />

52 Salvage operations<br />

for the Kia Trader


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XXXXXX<br />

Contents<br />

38<br />

30<br />

FEATURES<br />

30<br />

38<br />

42<br />

46<br />

Liner trades to North America<br />

Market conditions and increasing operating costs plague carriers<br />

Regional ports<br />

Diversification is the name of the game<br />

South Australia & the Northern Territory<br />

Ports are gearing up for larger ships to call and more trade<br />

Training & education<br />

Educational institutions are preparing for a technological future<br />

COLUMNS<br />

46<br />

42<br />

8 A word from the minister<br />

Deputy PM McCormack<br />

discusses tech in transport<br />

16 Industry opinion<br />

Is the biosecurity levy a tax grab?<br />

18 Young Shipping Australia<br />

Lawyers on the competition act<br />

20 MIAL<br />

MIAL’s Teresa Lloyd takes a look<br />

at a “strategic fleet” for Australia<br />

22 Industry opinion<br />

FTA on detention and demurrage<br />

24 The customs broker<br />

CBFCA talks international risks<br />

26 Women in maritime<br />

A story of growing gender<br />

diversity at Port Hedland<br />

58 Maritime law<br />

An expert lawyer examines<br />

trends in safety management<br />

60 Workplace law<br />

Legal impacts of new technology<br />

in transport and logistics<br />

62 Mission to seafarers<br />

Operation Cruise Terminal<br />

64 Out & about<br />

Svitzer names a tug in Newcastle<br />

67 The grill<br />

From a garbage barge to giant<br />

tankers: Cameron Butchart<br />

4 October 2018<br />

thedcn.com.au


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First published in 1891<br />

October 2018<br />

thedcn.com.au<br />

EDITORIAL<br />

First published in 1891<br />

ISSUE NUMBER 1239 October 2018<br />

Publisher<br />

Lloyd O’Harte lloyd.oharte@thedcn.com.au<br />

Editor<br />

David Sexton david.sexton@thedcn.com.au<br />

Senior Journalist<br />

Ian Ackerman ian.ackerman@thedcn.com.au<br />

Creative Director Lee McLachlan<br />

Production Manager<br />

Grant Lopez grant.lopez@thedcn.com.au<br />

Electronic Services<br />

Linda Saleh, Oliver Buzzi<br />

Advertising Sales Director<br />

Lindsay Reed lindsay.reed@thedcn.com.au<br />

Tel: 0431 956 645<br />

Subscription Manager<br />

Amy O’Rourke amy.orourke@thedcn.com.au<br />

Tel: 02 9126 9713<br />

From the editor<br />

THE announcement of the NSW Freight and Ports Plan 2018-2023<br />

by the state government is a welcome development.<br />

Daily Cargo News recognises the necessity of long-term strategic<br />

thinking, particularly given the implications for Australia’s largest<br />

city and largest state economy. The focus on both economic growth<br />

and sustainability also suggests nuanced thinking.<br />

Minister Melinda Pavey noted how the plan highlighted<br />

government and industry plans for road, rail, air and shipping.<br />

Importantly, the document recognises a role for coastal shipping,<br />

noting it can be “a viable alternative to road or rail for certain<br />

types of freight”.<br />

The report makes some interesting points about the location of a<br />

future NSW container terminal, saying it should go to Port Kembla<br />

but that Newcastle also should be considered. Clearly there are<br />

competing arguments and no doubt there is some water to go under<br />

the bridge before that debate is closed for good.<br />

As the nation’s population soars, so does the freight task,<br />

something recognised earlier in the year in the Inquiry into<br />

National Freight and Supply Chain Priorities when it talked of<br />

“high domestic population growth rates” as a contributory factor<br />

in “driving massive changes in demand for freight in Australia and<br />

across the world”.<br />

In order to avoid our freight task becoming hopelessly bogged<br />

down in traffic congestion, bold and visionary thinking is required.<br />

The NSW Freight and Ports Plan may not have every answer but<br />

it is nonetheless an important step in the right direction.<br />

David Sexton<br />

Editor, Daily Cargo News<br />

The voice of Australian shipping & maritime logistics<br />

36 Diversification push for<br />

Australia’s regional ports<br />

The big<br />

rethink<br />

40 Preparing for bigger<br />

ships in SA and the NT<br />

Low freight rates and<br />

high costs are prompting<br />

changes on the North<br />

America trades<br />

50 Salvage operations<br />

for the Kia Trader<br />

<strong>DCN1018</strong>_CoverFinal.in d 1 28-Sep-18 2:47:47 PM<br />

COVER IMAGE:<br />

Container Ship<br />

Golden Gate Bridge<br />

San Francisco Bay<br />

California<br />

Christopher<br />

Boswell<br />

Published by<br />

PARAGON DCN PTY LTD<br />

ABN: 73 627 186 350<br />

PO Box 81, St Leonards, NSW 1590<br />

Tel: +61 2 9126 9709<br />

CEO<br />

Ian Brooks ianb@paragonmedia.com.au<br />

www.thedcn.com.au<br />

Daily Cargo News is available to interested<br />

parties throughout Australia and overseas via<br />

subscription.<br />

For enquires please call 02 9126 9713.<br />

The publisher welcomes editorial contributions<br />

from interested parties, however, the publisher<br />

and Paragon DCN accept no responsibility for<br />

the content of these contributions and the views<br />

contained therein are not necessarily those of<br />

the publisher or of Paragon DCN. The publisher<br />

and Paragon DCN do not accept responsibility<br />

for any claims made by advertisers.<br />

Unless explicitly stated otherwise in writing, by<br />

providing editorial material to Paragon DCN,<br />

including text and images, you are providing<br />

permission for that material to be subsequently<br />

used by Paragon DCN, whole or in part, edited<br />

or unchanged, alone or in combination with<br />

other material in any publication or format<br />

in print or online or howsoever distributed,<br />

whether produced by Paragon DCN and its<br />

agents and associates or another party to<br />

whom Paragon DCN has provided permission.<br />

6 October 2018 thedcn.com.au


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WORD FROM THE MINISTER<br />

All roads lead to high-tech<br />

freight future<br />

Australia must be ready for a fast-paced, technology-rich transport environment,<br />

writes Deputy Prime Minister Michael McCormack<br />

TECHNOLOGY IN ROADS AND ROAD<br />

freight has come a long way since the Romans<br />

created networks for trade efficiency and<br />

military dominance across Europe with<br />

their famous roads.<br />

Now, two-way wireless communications<br />

between roads and vehicles allows realtime<br />

sharing of speed and position data<br />

to reduce congestion and avoid crashes.<br />

This technology is just one example of how<br />

quickly roads are evolving.<br />

Vehicle technology is also rapidly<br />

evolving with the development of<br />

automated vehicles and much more.<br />

The Liberal and Nationals government<br />

is acting to embrace technology and ensure<br />

the road-based supply chain connecting<br />

paddocks to ports is safe and efficient.<br />

The Australian government must ensure<br />

uniform regulation cross Australia to best<br />

exploit this freight technology revolution.<br />

Freight (which contributes up to 10%<br />

of Australia’s GDP) and general road users<br />

routinely operate across state borders.<br />

As minister for infrastructure and<br />

transport, I am chair of the COAG<br />

We are ensuring Australia’s road transport sector<br />

is well placed to realise the expected safety and<br />

productivity benefits of emerging technologies<br />

Transport and Infrastructure Council,<br />

which is working with jurisdictions and<br />

inter-jurisdictional transport bodies on two<br />

separate but connected bodies of work:<br />

• The first is the development of a<br />

National Freight and Supply Chain<br />

Strategy, which will provide an<br />

integrated national approach to ensure<br />

freight systems and infrastructure work<br />

across state and territory borders to<br />

enable the efficient delivery of goods.<br />

• The second is a nationally consistent<br />

approach to the deployment of transport<br />

technologies.<br />

We are ensuring Australia’s road<br />

transport sector is well placed to realise the<br />

expected safety and productivity benefits<br />

of emerging technologies. Real world trials<br />

and data collection are also underway. This<br />

will inform how our infrastructure and<br />

operational practices may change.<br />

For example, we are investing $84m<br />

towards a total $105m managed motorway<br />

systems project on the Bruce Highway<br />

between Brisbane and Caboolture.<br />

This technology enables road operators<br />

to control the flow of traffic on the road to<br />

reduce congestions, delivering measurable<br />

benefits for commuters and freight operators.<br />

We have recently committed $2.25m<br />

towards a study involving technology that<br />

will monitor heavy vehicle drivers’ level of<br />

alertness and produce safety warnings. This<br />

study involves Volvo Trucks, the Monash<br />

University Accident Research Centre, Seeing<br />

Machines and Ron Finemore Transport.<br />

There is also a trial of connected vehicle<br />

technology in heavy vehicles for safety<br />

applications between Port Kembla and the<br />

Hume Highway called the Co-operative<br />

Intelligent Transport Initiative trial.<br />

Another trial, involving some 110<br />

trucks, is being delivered in partnership<br />

with Cohda Wireless. In this project,<br />

traffic lights can detect participating heavy<br />

vehicles on approach and may provide<br />

priority green light signals at more than<br />

100 Sydney locations.<br />

Technology is opening up opportunities<br />

to improve the current system of road<br />

provision for heavy vehicle use – both in<br />

charging and investment. This is why the<br />

Australian government is also supporting<br />

heavy vehicle charging trials which place<br />

Michael McCormack, Deputy Prime Minister and<br />

minister for infrastructure and transport<br />

freight operators at the centre of the system.<br />

The Trials Business Case Program is<br />

currently accepting proposals for studies<br />

to scope industry’s willingness to pay an<br />

additional level of service on particular<br />

routes or networks.<br />

We are also investing nearly $225m<br />

towards putting in place an enhanced<br />

satellite positioning system. Many<br />

transport technologies, especially<br />

automated vehicles, are likely to benefit<br />

from accurate satellite positioning systems.<br />

This investment will improve the<br />

reliability and accuracy of positioning data,<br />

from five metres to 10cm across Australia<br />

and its maritime zone with the delivery<br />

of a Satellite-Based Augmentation System<br />

and improve GPS accuracy to within three<br />

centimetres in areas of mobile coverage.<br />

This advancement has enormously<br />

positive implications for many industries,<br />

like agriculture and freight.<br />

These developments will not be built<br />

in a day, but because this government is<br />

preparing today Australia will benefit from<br />

the emerging transport and infrastructure<br />

technologies of tomorrow.<br />

Image supplied<br />

8 October 2018<br />

thedcn.com.au


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News in brief<br />

Full details at thedcn.com.au<br />

Vessel released following<br />

wages agreement<br />

Operators of a live export ship had<br />

to sort out a dispute with their crew<br />

A live-export vessel was released from<br />

detention in Fremantle after the operator<br />

agreed to pay the crew’s wages.<br />

The MV Maysora, flagged in the<br />

Bahamas, was detained on Tuesday<br />

following an inspection by an AMSA<br />

surveyor which confirmed reports of<br />

the crew not being paid regular wages<br />

according to employment agreements.<br />

However, the situation changed.<br />

“An AMSA surveyor returned to MV<br />

Maysora and released the vessel from<br />

detention after the operator demonstrated<br />

crew had been paid and plans were in place<br />

for ongoing payment of crew wages,” an<br />

AMSA spokesperson said. “The vessel can<br />

now continue its voyage.”<br />

A new crew was flown in from the<br />

Philippines with the original Pakistani crew<br />

reluctant to sail the ship.<br />

The matter earlier attracted the attention<br />

of the Australian Border Force which<br />

confirmed 19 crew members were detained<br />

at Fremantle on Monday and Tuesday after<br />

their maritime crew visas ceased.<br />

“The ABF conducts regular operational<br />

activity at Australia’s ports to ensure all<br />

foreign crew comply with the conditions<br />

of their visas and is continuing to monitor<br />

this vessel and its crew,” the ABF said in a<br />

public statement.<br />

ITF inspector Dean Summers told Daily<br />

Cargo News there was an agreement in place<br />

between the Jordanian owners and the ITF.<br />

“There was back pay calculated and<br />

paid on board and three crew sought to be<br />

repatriated home which was granted with<br />

full entitlements paid,” Mr Summers said.<br />

Authorities also have faced criticism<br />

from the Royal Society for the Prevention<br />

of Cruelty to Animals which condemned<br />

the decision to let Maysora load 30,000<br />

sheep and “sail into uncertain conditions”<br />

in the Middle Eastern summer.<br />

RSPCA Australia senior policy officer Dr<br />

Jed Goodfellow said they were awaiting the<br />

results of a freedom of information request<br />

to access images and footage from live<br />

sheep export ships since the government<br />

began placing departmental observers on<br />

board in April.<br />

“Despite government and exporter<br />

assurances of improved conditions, we’ve<br />

seen no information, photos or footage<br />

from those observers, and that’s very<br />

worrying,” Dr Goodfellow said.<br />

Tug crew<br />

rescues parrot<br />

Through the heroic efforts of the<br />

crew of two tugboats in Victoria’s<br />

Western Port, an exotic Alexandrine<br />

parakeet named Buddy, lost for<br />

a week, found its way back to its<br />

owner.<br />

“It was exhausted and sought<br />

refuge on the stern of the Svitzer<br />

Olivia,” tug master Christian Messer<br />

said. “Amazingly, it was tame<br />

enough for us to approach it and<br />

even climbed onto my shoulder.”<br />

The crew of the Olivia and Svitzer<br />

Edwina contacted a local veterinary<br />

clinic, which advised them to put<br />

out an alert on the parrot-finder<br />

website, www.parrotalert.com.<br />

The tuckered-out parrot and its<br />

relieved owner were soon reunited.<br />

Buddy had flown 30km<br />

from home and survived<br />

a week in the wild.<br />

Kind-hearted mariners<br />

came to the aid of a feathered friend<br />

Svitzer Australia<br />

10 October 2018<br />

thedcn.com.au


Another crane is expected to<br />

boost productivity on<br />

the Freo waterfront<br />

DPWA, UNION BEGIN<br />

BARGAINING<br />

Fremantle Ports; Bluedog studio; Coprid<br />

Quay crane ship arrives at Freo<br />

A shipment of five quay cranes for DP<br />

World Australia terminals arrived recently<br />

at Fremantle on the ship Zhen Hua 24.<br />

The ship unloaded one of the cranes at<br />

Fremantle before departing for Brisbane to<br />

unload another crane, then to Sydney to<br />

unload two cranes, and then to Melbourne<br />

to unload the final crane.<br />

The shipment is the final tranche of<br />

DPWA’s nine-crane order from ZPMC, as<br />

part of $180m investment in equipment.<br />

The crane being delivered to Fremantle<br />

Ports’ North Quay will enable the DPWA<br />

terminal to service larger vessels and<br />

to work more efficiently. The previous<br />

shipment arrived in Australia in March.<br />

Agreement for Kangaroo Island<br />

woodchip export facility reached<br />

Kangaroo Island Plantation Timbers (KPT) recently announced it had entered into an<br />

agreement with Mitsui to develop, maintain and operate a woodchip-handling facility<br />

at the yet-to-be built KI Seaport, according to an announcement to the ASX.<br />

The agreement is subject to certain conditions, including development approval<br />

and the execution of final transaction documents.<br />

KPT is planning to build a deepwater port in Smith Bay on the northern coast of<br />

Kangaroo Island, which would be able to accommodate Panamax vessels.<br />

The woodchip-handling facility is proposed to include infrastructure capable of<br />

receiving, screening, stockpiling, sampling and loading woodchips into bulk vessels<br />

for export from the planned seaport.<br />

Central to the materials handling facility is a circular automatic stacker-reclaimer,<br />

which is to operate on a first-in, first-out basis, yielding quality advantages, and will<br />

have a storage capacity of 80,000 green tonnes.<br />

With this system the stockpile will be able to be built and reclaimed<br />

simultaneously and the system has the capacity to handle multiple products.<br />

KPT managing director John Sergeant welcomed Mitsui as a key infrastructure<br />

provider and operator for the proposed facility. “We are proud to strengthen our longterm<br />

partnership with Mitsui in<br />

this way,” he said.<br />

Stevedore DP World Australia<br />

and the Maritime Union have<br />

confirmed recent meetings as part<br />

of negotiations for a new enterprise<br />

bargaining agreement.<br />

A DPWA spokesperson told DCN<br />

their representatives recently met<br />

with MUA national and state branch<br />

representatives and employee<br />

representatives to start negotiations.<br />

The EA covers about 1800<br />

employees at the four DPWA terminals.<br />

“The meetings were constructive,<br />

working through the log of claims<br />

and list of issues from all parties in<br />

considerable detail. While there are<br />

gaps between the different positions<br />

on claims and issues, this was a<br />

productive start,” the spokesperson<br />

said.<br />

“DP World Australia remains<br />

committed to a constructive dialogue<br />

with employees.”<br />

DPWA has described the EA<br />

negotiation as “a conversation” and<br />

a process of reaching an agreed<br />

collective outcome.<br />

“A key aim of the negotiation is to<br />

get a document that can be clearly<br />

understood by all parties,” the<br />

spokesperson said.<br />

“As an outcome of the EA<br />

negotiations, our employees may<br />

receive additional benefits. These<br />

benefits will need to be met by<br />

changes to flexibility and availability,<br />

so operating costs remain stable.<br />

“Together with the MUA, we<br />

are committed to finalising the EA<br />

negotiations by February 2019.”<br />

In a public statement, the MUA<br />

said the DPWA agreement was one<br />

of the largest in the stevedoring<br />

sector and criticised the company<br />

for “attacking workers’ rights and<br />

conditions”.<br />

“This may be a long negotiation<br />

on the basis of company claims but<br />

MUA members will hang in there to<br />

the end to secure an agreement that<br />

takes members forward,” the union<br />

stated.<br />

thedcn.com.au October 2018 11


NEWS IN BRIEF<br />

NSW releases its<br />

grand plan for freight<br />

The NSW Freight and Ports Plan 2018-2023 was released last<br />

month, outlining plans for the state government to invest more<br />

than $5bn to support the growing freight task and address growth<br />

and congestion on the state’s road and rail networks.<br />

The plan builds on the NSW government’s Freight and Ports<br />

Strategy, released in 2013, and lays out the state government’s longterm<br />

vision for freight transport. It includes 73 initiatives the state<br />

says it would deliver by 2023.<br />

Minister for roads, maritime and freight Melinda Pavey said<br />

more than 2m households and businesses across the state tap into<br />

the freight network every day, relying on the timely and efficient<br />

movement of goods to markets nationally and globally.<br />

“The amount of freight moved through NSW is set to grow by<br />

28% to more than 618m tonnes by 2036. To support this, the NSW<br />

Freight and Ports Plan 2018-2023 provides more than 70 initiatives<br />

for increasing capacity on the existing network, including building<br />

new infrastructure,” she said.<br />

The report clearly points to coastal shipping as an opportunity to<br />

improve freight efficiency.<br />

“Coastal shipping can be a viable alternative to road or rail for<br />

certain types of freight. The Glebe Island and White Bay precinct is<br />

uniquely placed to enable shipping of sand and aggregate to Sydney<br />

to service the needs of Greater Sydney’s construction boom,” the<br />

report states.<br />

“This removes the need for trucks to travel into central Sydney<br />

with sand and aggregate from outside the area. Coastal shipping is<br />

also increasingly being looked at as an attractive alternative to rail<br />

for moving less time sensitive freight from NSW to other states.”<br />

One goal of the report is to “simplify and harmonise regulation”,<br />

and, as part of this goal, the NSW government said it would<br />

advocate “for Australian legislative amendments to facilitate the<br />

greater use of coastal shipping”.<br />

The report also aims to increase the share of rail freight at Port<br />

Botany to 28% by 2021.<br />

Port of Newcastle is one of the three major<br />

ports in New South Wales<br />

Automated train derails at<br />

Devonport<br />

An automated freight train derailed at Devonport<br />

recently. At the time, the locomotive was hauling a cargo of<br />

cement in seven wagons.<br />

Tasrail contacted police around 9am indicating a train was<br />

likely to derail in the Devonport Wharf area, with police and<br />

emergency services immediately dispatched to the area.<br />

At 9.09am the train derailed on Formby Road, opposite<br />

the post office and near a local cafe.<br />

Two pedestrians received minor injuries and were transported<br />

by to the North West Regional Hospital by ambulance.<br />

A woman in her 20s sustained cuts and abrasions to her<br />

head after the train hit a fence near her.<br />

A man in his 40s sustained a suspected broken elbow and<br />

cuts and abrasions.<br />

They were later released from hospital.<br />

In a statement, TasRail said their network control centre<br />

was alerted at 8.48am and they contacted police soon after<br />

who took action to ensure public safety.<br />

TasRail’s network control manager remained on the<br />

telephone with Tasmania Police to provide live updates and<br />

advice on the operation of the train as it travelled toward<br />

Devonport.<br />

“As part of TasRail’s emergency response protocol, the<br />

train was diverted to a dead end siding track that has a<br />

permanent derailer, ensuring the train could be halted in the<br />

safest possible location,” a TasRail spokesperson said.<br />

TasRail confirm the train was being operated in a loading<br />

yard via on-site handheld remote control technology, which<br />

had been utilised for more than 15 years.<br />

In the statement, TasRail also extended its thoughts to<br />

those injured and their families.<br />

TasRail has confirmed that there was no hazardous<br />

material on board the train and that the Australian<br />

Transport Safety Bureau and other authorities have been<br />

notified.<br />

TasRail said it had launched “a detailed investigation” into<br />

the incident and would cooperate with authorities.<br />

Ben Jeayes ; VICT<br />

12 October 2018<br />

thedcn.com.au


NEWS IN BRIEF<br />

Bulker attacked by pirates<br />

Pirates have attacked Swiss bulker MV Glarus off Nigeria,<br />

taking 12 of its 19 crew hostage.<br />

In a statement sent to Daily Cargo News, ship managers<br />

Massoel Shipping said the vessel came under attack early on<br />

22 September about 45 nautical miles SSW of Bonny Island,<br />

Nigeria.<br />

At the time of the attack the vessel was sailing from Lagos<br />

to Port Harcourt with a cargo of bulk wheat.<br />

“It is understood the pirate gang boarded the Glarus by<br />

means of long ladders and cut the razor wire on deck to gain<br />

access to the vessel and eventually the bridge,” the Massoel<br />

statement read.<br />

“Having destroyed much of the vessel’s communications<br />

equipment the criminal gang departed taking 12 of the 19<br />

crew complement as hostage.<br />

“All the appropriate authorities have been notified and a<br />

pilot and naval officers are currently on-board the vessel at<br />

the Bonny inner anchorage.”<br />

Masssoel indicated it was working with the authorities to<br />

secure the crew members’ release and that “the safety and<br />

well-being of those taken hostage is the first and absolute<br />

priority of Massoel Shipping”.<br />

Families are said to be being kept “closely informed” of the<br />

situation.<br />

The waters off Nigeria are known as a hot spot for<br />

international piracy.<br />

Earlier this year, the International Maritime Bureau’s<br />

Piracy Reporting Centre noted Nigeria had recorded 22<br />

incidents for the first three months of the year.<br />

US Navy sailors conduct<br />

training with Nigerian<br />

special operations sailors<br />

Duncan Gay<br />

Ken Lay<br />

New leadership for<br />

heavy vehicle regulator<br />

Two new board members for the National Heavy Vehicle Regulator<br />

have been announced.<br />

Deputy Prime Minister and federal infrastructure minister<br />

Michael McCormack and Queensland transport minister Mark<br />

Bailey revealed the new members.<br />

Current NHVR Board chair Bruce Baird AM and board member<br />

Vincent Tremaine (the former Flinders Ports CEO) are to retire in<br />

October, opening the way for the new appointments.<br />

Mr McCormack said Duncan Gay and Ken Lay AO APM would<br />

replace Mr Baird and Mr Tremaine.<br />

“All state and territory ministers have unanimously agreed Mr<br />

Gay is ideally suited to provide leadership as chair of the NHVR<br />

Board, over the next three years,” Mr McCormack said.<br />

“I would like to thank Bruce Baird AM, for his service over<br />

six years, which included establishing the NHVR and setting its<br />

strategic direction.<br />

“I’d also thank Vincent Tremaine for his counsel and advice<br />

during his six-year term on the NHVR Board, providing continuity<br />

and stability to the board and the NHVR.”<br />

Mr Bailey welcomed the appointment of Mr Lay to the Board,<br />

highlighting his skill and experience as Lieutenant-Governor of<br />

Victoria and former Victoria Police Chief Commissioner.<br />

“Mr Lay served in Victoria Police for almost 40 years and is<br />

currently serving on several boards including as Chair of the<br />

Council of Australian Government’s Advisory Council on Family<br />

Violence,” Mr Bailey said.<br />

2018 INDUSTRY EVENTS<br />

DATE<br />

EVENT<br />

16 October MIAL national conference, Canberra mial.com.au<br />

17-18 October Brisbane Marine Pilots ISPO IUG Conference, Brisbane brisbanepilots.com.au<br />

23 October Shipping Industry Charity Golf Challenge, Sydney thedcn.com.au/category/shipping-industry-golf-day<br />

25 October<br />

Boulton Lecture, given by John Lines to the Company<br />

of Master Mariners Queensland Branch, Brisbane<br />

mastermariners.org.au/branches/queensland<br />

26 October SAL QLD Ball, Brisbane shippingaustralia.com.au/event/sal-qld-ball-2<br />

1-3 November CBFCA National Conference, Sydney cbfca.com.au/CBFCA/National_Conference_2018<br />

22 November Australian Shipping and Maritime Industry Awards, Sydney dcnawards.com.au<br />

23 November SCLAA Awards Gala Dinner, Sydney sclaa.com.au/awards<br />

7 December<br />

SAL New South Wales State Committee<br />

Christmas Luncheon, Sydney<br />

shippingaustralia.com.au/event/sal-nsw-christmas-luncheon<br />

Darryl Wood<br />

14 October 2018<br />

thedcn.com.au


- 7 ports owned and operated<br />

- Pilotage across South Australia<br />

- Mooring services<br />

- Draft surveys<br />

- Hydorsurvey & tide management<br />

- People safe & environment sound<br />

www..indersports.com.au | +61 8 8447 0611


INDUSTRY OPINION<br />

Proposed biosecurity levy will<br />

destroy trust in the system<br />

The new biosecurity levy on import cargo, announced in the last budget,<br />

is nothing but a tax grab, writes Llew Russell<br />

THE ROYAL COMMISSION INTO<br />

the Australian banking sector has highlighted<br />

the importance of consumer trust and<br />

how easily that trust can be destroyed.<br />

As far back as 1996, Professor Malcolm<br />

Nairn’s report on Australia’s quarantine<br />

system emphasised the importance of<br />

quarantine being a shared responsibility<br />

between industry and government and<br />

the importance of concentrating on areas<br />

of highest risk. Subsequent reviews have<br />

reached the same conclusions.<br />

In the last federal government budget,<br />

a new biosecurity levy was announced,<br />

effective July next year, without any<br />

prior industry consultation and not even<br />

hypothecated for use solely by biosecurity.<br />

THE CHARGES<br />

The levy was set at $10.02 per 20-foot<br />

equivalent container imported, when<br />

it is well known that almost all import<br />

containers are 40-foot containers which<br />

results in an effective charge $20.04<br />

per container whether full or empty. In<br />

addition, a charge of $1/tonne will be<br />

applied to non-containerised cargo. How<br />

risky would 25,000 tonnes of cement<br />

clinker be? What is the charge for a car or<br />

a bus? Many exporters rely on imported<br />

This non-discriminatory tax will not encourage<br />

better biosecurity outcomes for industry,<br />

the government or the nation.<br />

materials, for example fertilisers. The<br />

additional costs will impact many sectors.<br />

Vessels longer than 25 metres already pay<br />

a $920 arrival charge for biosecurity and<br />

additional charges apply if an inspection<br />

is required. In the future such vessels will<br />

have on-board ballast water treatment<br />

systems at great cost to the industry worldwide.<br />

A lot of attention is also being paid to<br />

treatments to avoid hull-fouling and vessels<br />

are subject to a prior arrival assessment<br />

of their possible biosecurity risk. The<br />

heavy lifting to contribute to the cost of<br />

protecting Australia’s biosecurity system is<br />

shared by many segments of industry.<br />

COSTS COULD PILE UP<br />

If the proposed levy was a cost-recovery<br />

charge, it would be more transparent and<br />

subject to discussion within the various<br />

industry and biosecurity consultative<br />

committees. Even though it will be<br />

administered by the Department of<br />

Agriculture and Water Resources, the funds<br />

may or may not be spent on biosecurity.<br />

This tax on trade will be larger by the<br />

time it reaches the end consumer. The levy<br />

of $20.04 per container imported is very<br />

likely to be more than that by the time it<br />

reaches the importer. It is proposed that<br />

the levy be collected by the stevedores. The<br />

costs of collecting the levy, remittance<br />

and reconciliation of levy payments<br />

will presumably be passed on down the<br />

chain. Taxing links in the supply chain<br />

usually has multiplier effects as far as the<br />

consumer is concerned.<br />

For non-containerised cargo it is even<br />

more complicated because the stevedores<br />

generally have no direct relationship with<br />

the receiver of the cargo, so they would be<br />

forced to charge the customs agent, the<br />

freight forwarder or the ship’s agent. This<br />

leaves the levy passing through multiple<br />

hands and potentially more handling fees<br />

to be added down the chain.<br />

NON-CONTAINERISED CARGO<br />

The container levy was a recommendation,<br />

among many others, of the 2017 report<br />

on priorities for Australia’s biosecurity<br />

system chaired by Dr Wendy Craik, and<br />

the recommendation was qualified. It did<br />

not include any recommendation on noncontainerised<br />

cargo. The panel believed<br />

that on equity grounds, the levy should be<br />

expanded to include non-containerised<br />

incoming trade in the future, as the<br />

vessels themselves also create biosecurity<br />

risks. No mention was made of the levy<br />

applying to the cargo that the vessels carry<br />

or the biosecurity costs already borne by<br />

vessels as mentioned above.<br />

In relation to the levy applying to<br />

non-containerised cargo, the panel<br />

noted the finding in the Cost Recovery<br />

Implementation Statement Biosecurity<br />

2015-16 that: “[The Australian<br />

government] did examine other options<br />

to apply a levy to all types of imported<br />

cargo, however, there are no other costeffective<br />

mechanisms available at this<br />

time”. Presumably this is why there was<br />

no specific recommendation on noncontainerised<br />

cargo.<br />

The panel acknowledged that the<br />

Australian government’s 2015 costrecovery<br />

review removed the previous<br />

charge on air and sea containers as part<br />

of the overall restructuring package. The<br />

charge covered the cost of the Department<br />

examining 100% of loaded or partly<br />

loaded sea containers imported, but not<br />

empty containers. With the move towards<br />

risk-based inspections, it was decided<br />

to switch to another mechanism. If the<br />

container charge is to be re-introduced,<br />

will that require a return to a 100%<br />

examination of all import containers plus<br />

empties by the Department?<br />

The panel stated in its report that if a<br />

container levy (air and sea) is considered<br />

unacceptable (given a levy was removed<br />

in the 2015 cost recovery review), an<br />

alternative would be to supplement the<br />

charge on full import declarations with<br />

a levy to collect a similar amount to the<br />

16 October 2018<br />

thedcn.com.au


proposed container charge, in the order of<br />

$10 per full import declaration.<br />

It also should be noted the panel<br />

recommended an increase in the passenger<br />

movement charge by $5 in July 2022<br />

with revenue generated hypothecated to<br />

the Australian government agriculture<br />

department for use nationally to enhance<br />

activities across Australia’s biosecurity system.<br />

This is an important recommendation, as it<br />

recognises that good biosecurity outcomes<br />

are in the national interest.<br />

AIR CONTAINER LEVY NOT ACCEPTED<br />

The panel also recommended a levy of $5<br />

per incoming air container, effective from<br />

1 July 2019 but the government did not<br />

accept that recommendation.<br />

The government needed more tax<br />

revenue from trade so added a levy of $1<br />

per tonne for non-containerised cargo. This<br />

levy alone will raise 125% more funds per<br />

annum than the panel estimated would<br />

arise from the application of the levy on air<br />

and sea containers which was their actual<br />

recommendation.<br />

Nationally, externally sourced funds<br />

in 2015-16 accounted for 57% and budget<br />

appropriations 43% of total investment.<br />

A marked change from 2013-14 when<br />

the corresponding figures were 32% and<br />

68% respectively. It was also noted in the<br />

report that while very difficult to quantify<br />

there are significant in-kind contributions<br />

from industry.<br />

The levy announced in the last budget<br />

is a tax grab. What will happen in future<br />

budgets? What control will be exercised<br />

over the incentive to increase this so-called<br />

levy in the future?<br />

This non-discriminatory tax will not<br />

encourage better biosecurity outcomes for<br />

industry, the government or the nation. It is<br />

not risk-based and undermines the concept<br />

of biosecurity being a shared responsibility<br />

between government and industry.<br />

Trust in the system will only be restored<br />

if there is an increase of $10 effective on 1<br />

July 2019 in the FID, being the alternative<br />

and in my view, realistic recommendation<br />

of the 2017 review. This increase in the<br />

FID will be subject to on-going scrutiny<br />

by industry in consultation with the<br />

Department. The tax revenue from the $1<br />

per tonne of non-containerised cargo (an<br />

additional $66m approximately per year for<br />

each of the next three years) will have to be<br />

foregone if trust is to be restored.<br />

Llew Russell, AM<br />

The threat of possible retaliation by<br />

our trading partners to this proposed new<br />

non-tariff barrier should absolutely not be<br />

summarily dismissed.<br />

Llew Russell was the inaugural CEO of Shipping<br />

Australia Ltd, retiring from that position in<br />

2013. He is currently a director and consultant<br />

and was the recipient of the 2013 Australian<br />

Biosecurity Lifetime Achievement Award<br />

BUILT SMART,<br />

BUILT TOUGH,<br />

BUILT HERE.<br />

SAL<br />

www.omega-heavy-trucks.com 1800 005 747<br />

thedcn.com.au October 2018 17


YOUNG SHIPPING AUSTRALIA<br />

Don’t fall afoul of the<br />

Australian Competition Act<br />

The Competition Act carries pitfalls for the unwary in the shipping industry writes<br />

Rebecca Niumeitolu and Adam Vrahnos<br />

A FOCAL POINT OF YOUNG<br />

Shipping Australia (NSW) and its parent<br />

body, Shipping Australia, is to educate<br />

and encourage members’ compliance with<br />

industry regulations. A topic of constant<br />

discussion is the application of the<br />

Australian Competition and Consumer Act<br />

2010 which, among other things, prohibits<br />

anti-competitive conduct.<br />

A difficulty with compliance under<br />

the Competition Act for members of the<br />

shipping industry is that they are often<br />

required to navigate this strait between<br />

permissible operational co-ordination and<br />

impermissible restrictive trade practices<br />

where the regulatory haze is thick.<br />

A review of current industry practices<br />

may well find that many participants are<br />

unclear on what and when conduct crosses<br />

the line. How can businesses assess risks of<br />

non-compliance and how can they identify<br />

risks as they arise?<br />

RISKY BUSINESS<br />

The Competition Act is regulated and<br />

enforced by the Australian Competition and<br />

Consumer Commission. As a rule of thumb,<br />

the ACCC’s methods of enforcement either<br />

go to the nature of regulatory breach by a<br />

business, or they tend to be commensurate<br />

to the degree of criminality.<br />

If the sentence imposed on Nippon Yusen<br />

Kabushiki Kaisha (NYK) on 3 August 2017 is<br />

any indication, long-standing cartel conduct<br />

may pose a significant risk for businesses.<br />

For NYK, the risk of non-compliance<br />

with the Competition Act resulted in a<br />

fine of $25m that had been reduced from<br />

$50m for NYK’s guilty plea, and past and<br />

future assistance, along with its contrition.<br />

That fine was imposed for a cartel which<br />

NYK engaged in between 2009 to 2012 in<br />

respect of transporting vehicles to Australia<br />

with other shipping lines.<br />

The list of ways a business can spot risks<br />

and avoid them is extensive and largely<br />

depends on each business’s circumstances.<br />

However, there are two that all businesses<br />

should keep in mind to ensure they are not<br />

in breach of the Competition Act.<br />

NUMBER ONE<br />

Think twice about prospective contracts,<br />

arrangements or understandings. The<br />

natural compulsion is to say “yes”<br />

to a contract that offers a business a<br />

commercial benefit with minimal costs.<br />

However, business need to think twice<br />

about contracts that:<br />

• have the purpose, or would have or be<br />

likely to have the effect of substantially<br />

lessening competition in the market;<br />

• offer services or goods on the condition<br />

of excluding a party from dealing with<br />

a competitor or only procuring services<br />

from a certain third party or other<br />

exclusively dealing with a party; and/or<br />

• contain cartel provisions, such as by<br />

fixing, controlling or maintaining prices<br />

of the supply of shipping services with<br />

the purpose of limiting the supply of<br />

services to persons of classes of persons.<br />

Sometimes it won’t be obvious that a<br />

contract term has a prohibited purpose or<br />

effect. Businesses need to look for, or obtain<br />

advice on, the implications of the terms of a<br />

contract, arrangement or understanding on<br />

the market. It may be a lot of effort, but it is<br />

better not to rely on inadvertence as a shield<br />

where the risks for non-compliance are costly.<br />

NUMBER TWO<br />

Register prospective conference agreements<br />

and review existing ones. Conference<br />

Rebecca Niumeitolu,<br />

lawyer, Holding<br />

Redlich and YSA<br />

committee member<br />

agreements are agreements between liner<br />

shipping providers relating to inward or<br />

outward cargo shipping services provided,<br />

or proposed to be provided, by those<br />

providers or members. Where appropriately<br />

registered, such agreements allow for liner<br />

service providers to agree to freight rates to<br />

be charged, the quantity and kinds of cargo<br />

to be carried and trade routes.<br />

Failing to register these agreements<br />

runs a risk of breaching prohibitions<br />

against price fixing, entering contracts that<br />

have the effect of substantially lessening<br />

competition and/or exclusive dealing.<br />

Parties contemplating entry into a<br />

conference agreement should register them.<br />

Parties that have failed to register a<br />

conference agreement or a variation to<br />

a conference agreement may consider<br />

contacting the ACCC with a strategy to<br />

rectify that error.<br />

WALKING A FINE LINE<br />

The Competition Act imposes various<br />

positive obligations on businesses to<br />

ensure that their coordinated efforts with<br />

other businesses in the shipping/logistics<br />

sector are permissible and do not restrict<br />

competition in the market.<br />

There is a fine line between permissible<br />

operational coordination and impermissible<br />

restrictive trade practices, as evidenced by<br />

various recent high profile prosecutions<br />

brought by the ACCC, and it is vital that all<br />

businesses in the shipping sector are aware<br />

of potential operational risks and respond<br />

promptly to ensure compliance.<br />

Adam Vrahnos,<br />

lawyer, Holding<br />

Redlich and YSA<br />

committee member<br />

Holding Redlich<br />

18 October 2018<br />

thedcn.com.au


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INDUSTRY OPINION<br />

The strategic fleet<br />

and the national interest<br />

MIAL chief executive Teresa Lloyd examines the implications of having<br />

a “strategic fleet”<br />

THE TERM “STRATEGIC FLEET”<br />

means different things to different people.<br />

Undoubtedly, Australia already has a<br />

considerable strategic fleet – vessels the<br />

government sees fit to own, operate or<br />

charter such as the defence and border<br />

protection fleets, the Antarctic Division<br />

ice breaker, the CSIRO research vessel and<br />

AMSA emergency response vessels.<br />

Internationally there are examples<br />

of broader concepts of strategic fleets –<br />

regimes adopted by the UK via the Royal<br />

Fleet Auxiliary and US via the Military<br />

Sealift Command. Of course, both these<br />

nations also have significant nationallyflagged<br />

fleets that could be requisitioned<br />

if required.<br />

THE AUSTRALIAN FLEET<br />

The Australian maritime industry is a<br />

dynamic and diverse sector that includes<br />

businesses already heavily invested in<br />

providing support services to Australian<br />

government fleets and has a proud history<br />

of working together and supporting our<br />

nation’s needs.<br />

The utilisation of merchant-marine<br />

capability by other nations’ defence forces<br />

across a much broader area of operation<br />

is instructive. Australia’s maritime<br />

circumstances necessitate the careful<br />

consideration of the types of vessels that<br />

may have a national interest, given the<br />

particular requirements of Australia. This<br />

could mean that an appropriate strategic<br />

fleet for Australia may be aligned not<br />

just with military and defence needs, but<br />

also with supply-chain security, trade<br />

facilitation and seafarer officer training,<br />

given our reliance on sea transport via our<br />

extensive network of commercial ports.<br />

Assuming this is the case, how would<br />

we go about determining what additions<br />

we might suggest to the existing strategic<br />

fleet? An appropriate test to apply at first<br />

instance might be to identify where there<br />

is sufficient cargo to warrant a stable and<br />

permanent presence for a ship.<br />

SETTING POLICY FOR A STRATEGIC FLEET<br />

The market has determined – and<br />

policy settings have allowed – that<br />

Australian ships with a full Australian<br />

crew component are uncompetitive and<br />

unwarranted in almost all Australian<br />

trades. If the objective of the strategic fleet<br />

is to have vessels of certain types available<br />

to secure Australian supply chains and be<br />

available for requisition, then these vessels<br />

need to be identified and incentives put in<br />

place to secure them.<br />

The idea floated in the 2016 green<br />

paper, A Maritime Transition, was that<br />

these vessels be supported by a redirection<br />

of funds currently paid by foreign ships<br />

participating in Australian coastal trade in<br />

the form of crew wage top-ups under the<br />

Seagoing Industry Award Part B.<br />

Unless and until Australia has a regime that supports<br />

a level of local content in our shipping task, we will not<br />

see certainty or stability in the sector, and industry<br />

will continue to be wary of investment.<br />

The strong sentiment at the time of<br />

the green paper’s preparation was that<br />

foreign shipping companies didn’t mind<br />

paying something, but they wanted to<br />

see it go to something of benefit to the<br />

Australian maritime sector. Importantly,<br />

they wanted to eliminate the red tape and<br />

administrative burden that accompanies<br />

the payment of the wages top-up. To<br />

achieve that end, a simple, fixed levy<br />

would sensibly form part of existing AMSA<br />

levy structures. Equally, there is a strong<br />

rationale for government support.<br />

FUND THE RIGHT THING<br />

In 2013-14 the public funding (from all<br />

governments) provided to road and rail was:<br />

• about $25bn (Commonwealth, state/<br />

territory and local) for road; and<br />

• about $8.3bn (Commonwealth and<br />

state/territory) for rail.<br />

Further, it is estimated that each 1%<br />

increase in freight efficiency saves the<br />

national economy $1.5bn. There is little<br />

doubt that with the right policy settings,<br />

shipping could deliver at least a 1%<br />

efficiency gain.<br />

A fraction of the expenditure provided<br />

to road and rail would greatly enhance the<br />

competitiveness of shipping versus those<br />

modes and increase the market share of this<br />

form of transport, with resultant economic<br />

and environmental benefits. Specifically,<br />

public investment in infrastructure to<br />

encourage dedicated coastal ro-ro services<br />

for containerised cargo and trucks was<br />

identified as being something that would<br />

likely have immediate impact and provide<br />

confidence to investors to provide that<br />

transport option.<br />

LOCAL CONTENT<br />

Unless and until Australia has a regime<br />

that supports a level of local content in our<br />

shipping task, we will not see certainty or<br />

stability in the sector, and industry will<br />

continue to be wary of investment. How<br />

long that change takes will determine<br />

whether the industry is in a position to<br />

rebuild at all. And, with the complete demise<br />

of the industry comes a loss of strategic<br />

skills that are essential for Australia.<br />

With appropriate forms of support<br />

in place, the commercial interests that<br />

would be expected to use the strategicfleet<br />

ships would be in the same position<br />

commercially as they are now – but the<br />

20 October 2018<br />

thedcn.com.au


Teresa Lloyd, CEO, MIAL<br />

nation will have secured assets that fill<br />

certain national interest requirements.<br />

Using round numbers, 20 vessels<br />

would result in about 850 permanent jobs<br />

(about 100 ashore and 750 at sea), provide<br />

training for about 100 seafarers each year<br />

and require $140m annually in support.<br />

That’s 1.6% of the rail funding, or 0.56% of<br />

the road funding allocation in 2013-14.<br />

Seems like a small price to pay to secure<br />

a reliable source of trained maritime<br />

professionals to run our nation’s ports,<br />

pilot our visiting ships in and ensure safety<br />

and environmental standards are upheld.<br />

Not to mention having a critical mass of<br />

assets available to look after the national<br />

interest should they be required.<br />

The objections to offering any industry<br />

support are obvious. Since governments<br />

already fund other forms of surface<br />

transport and provides aviation with a<br />

watertight cabotage regime, it seems fiscal<br />

and structural support for transport modes<br />

is alive and well in this country – just not if<br />

it happens on the sea.<br />

Marina Tatarenko; Jim Wilson<br />

ONE’S SUBSIDY IS ANOTHER’S<br />

INCENTIVE<br />

Philosophical objections aside, surely the<br />

pragmatist in us all can see that this avenue<br />

has potential to solve a great number of<br />

challenges facing the industry and in<br />

the process create jobs, solve our skilled<br />

seafarer shortage and create optimism<br />

and a future for an industry which other<br />

developed nations consider critical and<br />

carefully nurture. And they do this because<br />

it makes good sense and is in their national<br />

interest. Australia is no different.<br />

thedcn.com.au October 2018 21


INDUSTRY OPINION<br />

American investigation<br />

rings true in Australia<br />

Travis Brooks-Garrett examines some of the issues pertaining to detention<br />

and demurrage in the supply chain<br />

IN EARLY SEPTEMBER, THE US<br />

defined demurrage as charges relating to<br />

Federal Maritime Commission released<br />

the “extended use of terminal space”, while<br />

an interim report on its investigation<br />

detention was used by the investigators to<br />

into “conditions and practices relating to<br />

refer to charges for extended “use of carrier<br />

detention, demurrage, and free time in<br />

provided equipment”.<br />

international ocean-borne commerce”.<br />

Common issues identified by US shippers<br />

During the investigation, the FMC<br />

in their testimony included “delays involved<br />

served 23 ocean carriers and 44 marine<br />

with US government holds”, “labour issues”<br />

terminal operators with interview<br />

and “unclear demurrage and detention<br />

questions and document requests.<br />

billing and dispute resolution systems”.<br />

The investigation was a result of a<br />

petition by a coalition of 26 organisations,<br />

NOT JUST IN AMERICA<br />

including local shippers, freight forwarders<br />

Despite the peculiarities of the US port<br />

and customs agents, calling for the<br />

supply chain (chassis pooling, etc.),<br />

adoption of a formal position by the<br />

concerns regarding detention and<br />

regulator on what constitutes “just and<br />

demurrage practices are universal and<br />

reasonable rules and practices”.<br />

the FMC’s investigation into this area has<br />

The investigation comes at an important<br />

time, with critics claiming that shipping<br />

lines are using detention and demurrage<br />

practices as a revenue generator rather than<br />

caught the attention of the world.<br />

In Australia, detention charges caused<br />

by “border holds”, or containers being<br />

inspected at the Container Examination<br />

Travis Brooks-Garrett, secretariat, Australian<br />

Peak Shippers Association and director, Freight &<br />

Trade Alliance<br />

a fair and transparent penalty system.<br />

Facility (CEF), are a major and recurring<br />

If container detention and demurrage<br />

issue for our shippers. While the<br />

practices were “just and reasonable”,<br />

A DEFINITION OF TERMS<br />

Australian Border Force has arrangements<br />

the container detention clock would<br />

Firstly, it’s important to note that the<br />

with stevedores to offer free storage if the<br />

begin from the time the container<br />

FMC identified inconsistencies in how the<br />

terms “detention” and “demurrage” are<br />

defined and used, even among shipping<br />

lines. While we often, incorrectly, hear<br />

the terms used interchangeably, for the<br />

purposes of the investigation the FMC<br />

cargo report was lodged within statutory<br />

timeframes, shipping lines will still<br />

apply detention fees for late container<br />

de-hire, even though the shipper or<br />

freight forwarder has no control over the<br />

container during that time.<br />

becomes available after CEF processing,<br />

and not from the time the container is<br />

discharged from the vessel. This was a key<br />

recommendation in the Freight & Trade<br />

Alliance and Australian Peak Shippers<br />

Association joint submission to the Inquiry<br />

Jupeter; Image supplied<br />

22 October 2018<br />

thedcn.com.au


into National Freight & Supply Chain<br />

Priorities earlier this year.<br />

While shipping lines have every right to<br />

be recompensed for extended equipment<br />

use, shippers should not be forced to pay<br />

for events that are outside of their control.<br />

In Australia, this issue was particularly<br />

pronounced when reports were received<br />

that Australian shippers were slapped with<br />

detention invoices during the VICT-MUA<br />

industrial dispute. That is, even though<br />

it was impossible to collect containers<br />

during that period and even though, in<br />

consideration of the circumstances, the<br />

terminal itself had done the right thing and<br />

waived storage fees.<br />

While many shipping lines reported to<br />

the FMC that they “automatically extend<br />

free time when a container is unavailable<br />

for retrieval”, it is also noted that only a few<br />

“VOCCs [vessel operating common carrier]<br />

or MTOs [marine terminal operators]<br />

indicated that they affirmatively notify<br />

cargo interests that an event triggering such<br />

policies has occurred”. In other words, you’ll<br />

only get it if you ask for it!<br />

A NEED FOR CONSISTENCY AND CLARITY<br />

Another important issue in the investigation<br />

is the inconsistency and lack of clarity in<br />

how detention and demurrage policies are<br />

applied and how disputes are settled.<br />

Many of the shipping lines reported<br />

disputes were resolved on a case-by-case<br />

basis, with several VOCCs having no<br />

written policy on how to handle disputed<br />

invoices. Of those that did have written<br />

policies, “few provided guidance on how<br />

a disputed charge should be evaluated or<br />

what evidence should be considered”.<br />

Predictably, an informal case-by-case<br />

review process, with no written policy<br />

as guidance, can create more headaches<br />

than answers for a shipper. As a result,<br />

identical shippers with identical scenarios<br />

may receive very different outcomes in a<br />

detention charge dispute.<br />

Finding the appropriate contact seems<br />

to be another challenge entirely, with<br />

the FMC noting that “it was also not<br />

immediately clear who cargo interests are<br />

supposed to contact in the event that they<br />

wish to challenge demurrage or detention”.<br />

Again, this all plays very true to the<br />

Australian experience.<br />

In their initial findings, the FMC have<br />

identified the following focus areas:<br />

• transparent, standardised language for<br />

demurrage, detention, and free time<br />

practices;<br />

• clarity, simplification, and accessibility<br />

regarding demurrage and detention<br />

(a) billing practices and (b) dispute<br />

resolution processes;<br />

• explicit guidance regarding types of<br />

evidence relevant to resolving demurrage<br />

and detention disputes;<br />

• consistent notice to shippers of<br />

container availability;<br />

• an optional billing model wherein<br />

(a) MTOs bill shippers directly for<br />

demurrage; and (b) VOCCs bill shippers<br />

for detention; and<br />

• an FMC shipper advisory or innovation<br />

team.<br />

FTA and APSA, and other shipper bodies<br />

around the world, have applauded the FMC<br />

investigation. It is a brave exercise with<br />

While shipping lines have every right to be<br />

recompensed for extended equipment use,<br />

shippers should not be forced to pay for events<br />

that are outside of their control.<br />

a clear understanding of the real-time<br />

operational issues that affect US exporters,<br />

importers and maritime trade stakeholders.<br />

Hopefully, our own government agencies<br />

are taking note.<br />

We were proud to host Commissioner<br />

Dye of the FMC in Melbourne earlier this<br />

year as part of the Global Shippers Forum<br />

and look forward to further engagement.<br />

The final FMC Report is due on 2<br />

December 2018. The FMC Interim<br />

report is currently available to view on<br />

the FTA website.<br />

Proud to be sponsoring the<br />

2018 Freight Forwarder<br />

of the Year Award<br />

at the 2018 Australian Shipping<br />

& Maritime Industry Awards<br />

Australia’s first consolidator to financially guarantee its services<br />

thedcn.com.au October 2018 23


THE CUSTOMS BROKER<br />

How to survive trading risks in<br />

the international supply chain<br />

The risks of international trade are not the responsibility of services providers<br />

involved in the supply-chain management process, writes Paul Damkjaer<br />

SERVICE PROVIDERS IN INTER-<br />

national trade logistics and supply chain<br />

management face a challenging business<br />

continuum with the downturn of<br />

international trade. Of particular concern is<br />

deteriorating cash flow, facility for payment<br />

on behalf of clients of duty and GST, as<br />

well as the level of increased client failure<br />

through administration or receivership.<br />

The inherent risks of international<br />

trade, while clearly understood, are not the<br />

responsibility of service providers involved<br />

in the international trade logistics and<br />

supply chain management process.<br />

THE ROLE OF A SERVICE PROVIDER<br />

The international freight forwarder/customs<br />

broker is a service provider contracted to<br />

clients to ensure internationally traded<br />

goods move from the point of origin to the<br />

point of destination so as to arrive at the<br />

right place, time and at a cost appropriate<br />

with the service provided.<br />

To achieve these objectives requires<br />

expertise across a wide variety of processes,<br />

including:<br />

• international freight forwarding (import<br />

and export);<br />

• barrier clearance – border and<br />

biosecurity;<br />

• transportation and its security in all<br />

modes (sea, air, rail, road and post);<br />

warehouse/distribution; and<br />

• supply chain management.<br />

In many cases, contractual issues as to<br />

the supply and delivery of goods are done<br />

by the importer without consultation with<br />

service providers and the outcomes of these<br />

arrangements are, in the main, outside the<br />

control of service providers.<br />

Additional costs that may result from such<br />

arrangements are not as a result of, or indeed<br />

the responsibility of, the service provider,<br />

who may only be charged with the task of<br />

facilitating the import consignment through<br />

the barrier process on the client’s behalf.<br />

THE ROLE OF THE IMPORTER AND<br />

MITIGATION OF RISK<br />

It has become clear that while there is<br />

expertise within individual sectors of<br />

industry, there are very few experts and<br />

very little expertise covering the whole of<br />

supply chain.<br />

Operating in the international supply<br />

chain is a difficult and complex task that<br />

requires extensive knowledge of how the<br />

supply chain operates and parties interact.<br />

It is important for importers to partner<br />

with their service providers and work<br />

collectively to improve cost efficiency in the<br />

supply chain.<br />

The following points highlight some key<br />

issues for importers to consider:<br />

• Get legal advice before entering into<br />

international trade contracts.<br />

• Obtain advice from your service<br />

provider(s) involved in international<br />

trade facilitation.<br />

• Understand Australian regulatory (and<br />

documentary) requirements before<br />

importation (or exportation) of goods.<br />

• Obtain appropriate insurance cover to<br />

minimise international trading risks.<br />

• Note that just-in-time inventory has<br />

inherent risk, as unexpected delays can<br />

occur at any time in the international<br />

supply chain.<br />

• Your service provider should be provided<br />

with all necessary documentation early<br />

Operating in the international supply chain is a difficult<br />

and complex task that requires extensive knowledge<br />

of how the supply chain operates and parties interact.<br />

Paul Damkjaer, CEO, CBFCA<br />

to allow border clearance (and other<br />

requirements) before freight arrival.<br />

• Be flexible in the times for the receipt of<br />

containers, such as extending operating<br />

hours to align with those of stevedores<br />

and logistics service providers.<br />

• Unpack the container as quickly as<br />

possible (do not use it as a storage unit).<br />

• Notify your service provider or transport<br />

company when the container is empty<br />

and ready for collection. This should be<br />

at least two full working days prior to<br />

commencement of any detention fee<br />

period.<br />

• Ensure the timely payment of invoices<br />

to avoid cargo clearance delays as service<br />

providers are not required to provide<br />

financial accommodation.<br />

• Understand how the international<br />

supply chain partners interact.<br />

These issues are outside the control of<br />

the logistics service provider. The additional<br />

costs created from the compounding<br />

effects due to lack of awareness of the<br />

requirements in the complex supply<br />

chain are not as a result of, or indeed, the<br />

responsibility of the logistics provider.<br />

Ian Ackerman<br />

24 October 2018<br />

thedcn.com.au


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WOMEN IN MARITIME<br />

Amber Thomson<br />

in the<br />

wheelhouse<br />

A vision for<br />

Port Hedland tug crews<br />

Katherine Mahone relates the stories of women forging maritime careers<br />

in the tough working environment of Port Hedland<br />

AT THE BEGINNING OF JULY, A POST<br />

what was being done to promote maritime<br />

wasn’t until a colleague saw her potential<br />

appeared on an internet page for women<br />

careers for those who may not traditionally<br />

and suggested she consider working for<br />

who go to sea. The post was looking for a<br />

have sought such a career. How can<br />

AMSA that Clare became aware of the<br />

female engineer to join the tug crews in<br />

we learn from the experiences of other<br />

maritime industry. She has since worked for<br />

Port Hedland, with a view to having a fully<br />

industries that seek to promote diversity?<br />

offshore companies in marine logistics for<br />

female tug crew: master, engineer and<br />

I spoke with Clare Ellis (QHSE<br />

barge loading, landing craft and the supply<br />

trainee/mate.<br />

coordinator), Annette Prindiville (tug<br />

and support of offshore and blue water<br />

I was interested to know if they had<br />

master) and Amber Thomson and Bre Evans<br />

vessels. Clare is currently studying for her<br />

managed to achieve this goal and contacted<br />

(both trainee tug masters) to learn more<br />

Master Class 5 and Marine Engine Driver<br />

Clare Ellis, who posted the request, to find<br />

about how they came to work in maritime.<br />

qualifications.<br />

out more about the women working on the<br />

They, like many women and men, fall<br />

tugs in this area.<br />

into the two common paths to a career in<br />

ANNETTE AND AMBER<br />

the maritime industries – by accidently<br />

Both Annette and Amber had fishermen<br />

HEDLAND TUGS<br />

stumbling across it or because they knew<br />

in their families and spent a lot of time on<br />

Clare works for Rivtow Marine, which<br />

about the industry due to a family member<br />

the water while growing up, but still the<br />

provides tug services to Port Hedland.<br />

working in it, usually their father.<br />

knowledge of possible career opportunities<br />

Rivtow Marine has 18 tugs under<br />

in the industry was limited.<br />

management at Port Hedland, with three<br />

CLAIRE<br />

Annette started in the marine tourism<br />

crew per shift. The company has three<br />

Clare was never made aware of the job<br />

industry in Victoria and New South Wales<br />

women working on the tugs and three<br />

opportunities available in the maritime<br />

and completed short courses to move onto<br />

women working shore-side. There is hope<br />

industry when going through high school<br />

other areas within the industry. She worked<br />

that a woman engineer will be joining their<br />

and, even after she joined AMSA, it initially<br />

as a pilot-launch master and on patrol<br />

ranks shortly.<br />

Rivrtow’s post and my own experiences<br />

in the maritime industry led me to wonder<br />

wasn’t a consideration. Clare studied<br />

environmental science and worked in safety<br />

for several state and federal departments. It<br />

vessels around Australia and Papua New<br />

Guinea. After a few years of submitting<br />

her resume for a tug master position,<br />

Clare Ellis<br />

26 October 2018<br />

thedcn.com.au


Annette was offered a job as a trainee on<br />

Port Hedland tugs. When the management<br />

company changed, Annette was given a<br />

trainee tug master position and now holds<br />

Master Class 4 and Marine Engine Driver<br />

Grade 2 qualifications.<br />

Amber was initially encouraged to<br />

complete a trade before pursuing a career<br />

in the maritime industry. She completed<br />

a chef apprenticeship before travelling<br />

and working overseas. On her return to<br />

Australia, Amber worked on tourist vessels<br />

in Tasmania and the Kimberley. It was<br />

while working on a charter boat in the<br />

Kimberley that Amber decided to follow<br />

her dream of working as a master in the<br />

industry. Over the next 10 years, she<br />

obtained her Master Class 4 and Marine<br />

Engineer Driver Grade 2 qualifications and<br />

worked on a variety of vessels both inshore<br />

and offshore.<br />

Amber is a now a partner in a firm that<br />

sub-contracts to Rivtow Marine, where she<br />

is currently completing training on ASD tugs.<br />

BRE<br />

Bre Evans’ father was a scuba diving<br />

instructor and regularly took her on his<br />

dive trips, giving Bre a great love of the<br />

ocean and an interest in being involved<br />

in working either on or in the water. She<br />

studied marine biology and aquaculture<br />

and commenced working as a research<br />

officer in the pearling industry. This<br />

required Bre to operate small boats to<br />

be able to collect data, and led to her<br />

obtaining coxswain and Marine Engine<br />

Kirsty Timbury (BHP marine<br />

manager), Clare Ellis and<br />

Zoe Gill (BHP marine<br />

co-ordinator)<br />

Driver Grade 2 qualifications.<br />

While on holiday in the Caribbean,<br />

Bre discovered yachting. As she worked<br />

on luxury yachts around the world, Bre<br />

progressed her qualifications to Master<br />

Class 4 and a UK-issued Master (yachts<br />

that are less than 3000 GT). Bre has<br />

only been training on tugs for about<br />

three months but is enjoying learning all<br />

aspects of the job – maintaining a lookout,<br />

vessel maintenance, safety checks and<br />

administrative duties.<br />

All agree that working in the maritime<br />

industry has been rewarding and they enjoy<br />

being able to work at something they love.<br />

The schedules may vary – including day<br />

work with on-call duties; and 27 or 28 days<br />

on with the same number of days off.<br />

Like every job, there are ups and downs,<br />

good and bad days, but each of these<br />

maritime professionals believes the time<br />

and commitment taken to reach where they<br />

are today has been worthwhile.<br />

Unlike other jobs, though, information<br />

on opportunities to work in the maritime<br />

industry was not readily available. The<br />

challenge to us all is to promote the<br />

opportunities in the maritime industry.<br />

Katherine Mahone decided on a career at sea<br />

after enjoying a holiday on a square-rigged<br />

sailing ship at the age of 14. She has worked in<br />

the UK and Australia, and is currently a vesseltraffic<br />

officer at Port Kembla. Katherine is a<br />

single parent of a five-year-old who believes she<br />

is the boss of the ocean.<br />

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thedcn.com.au October 2018 27


PORTS AUSTRALIA BIENNIAL CONFERENCE<br />

Ports bosses<br />

confabulate in Darwin<br />

Ports honchos recently gathered in Darwin to<br />

attend Ports Australia’s 46th Biennial Conference,<br />

Ian Ackerman reports<br />

Euan Morton,<br />

Principal, Synergies<br />

Economics<br />

Synergies Economics principal Euan<br />

Morton took delegates through an in-depth<br />

Paul Weedon,<br />

CEO, TasPorts<br />

Day one of the conference kicked off with<br />

Ports Australia chairman and (now former)<br />

TasPorts CEO Paul Weedon giving a brief<br />

overview of the topics to be covered for the<br />

day, from a Tasmanian point of view.<br />

He said ports across the country were<br />

grappling with increasing vessel sizes, and<br />

“they have finally come to Tasmania; it is a<br />

big deal in our world,” he said.<br />

Mr Weedon also said people in Tasmania<br />

by and large have a good relationship with<br />

the ports in their towns.<br />

“Citizens in the towns of Burnie and<br />

Hobart love their ports and are hugely<br />

interested in what we do,” he said.<br />

Adam Handley,<br />

senior partner,<br />

MinterEllison<br />

Following Mr Weedon’s talk, Adam<br />

Handley, who is president of the WA<br />

Australia China Business Council and<br />

senior partner at MinterEllison, did a<br />

deep dive into the business and trade<br />

relationship that Australia has with China.<br />

He argued that there wasn’t a “binary<br />

choice” for Australia to align with either<br />

the US or China. He suggested Australia<br />

should focus on domestic stability, and<br />

spreading influence where it could – the<br />

Pacific region.<br />

“Our capacity to influence global<br />

situations is negligible, but we have some<br />

regional influence and we need to do more.”<br />

analysis of the economic and regulatory<br />

issues around Australian ports.<br />

During part of the presentation, he<br />

spoke about social licence and community<br />

engagement. Mr Morton drew comparisons<br />

between the ports industry and the gaspipeline<br />

industry. He said, among other<br />

similarities, that gas pipelines bring great<br />

good to consumers, but are largely invisible,<br />

and ports are similar.<br />

Also, Mr Morton spoke about ports’<br />

connections with communities in which<br />

they operate. He cited the Container exhibit<br />

at the Australian National Maritime<br />

Museum as a good example of the industry<br />

engaging with its community.<br />

“This industry has done a great job, but<br />

the public aren’t necessarily aware of it,<br />

and that’s going to be a big issue moving<br />

forward,” he said.<br />

Ian Ackerman<br />

28 October 2018<br />

thedcn.com.au


Anthony Albanese,<br />

member for<br />

Grayndler<br />

Labor MP Anthony Albanese gave a stirring<br />

talk during the second day of the conference,<br />

Daniela Constantinescu<br />

Mandy Newton ,<br />

Deputy<br />

Commissioner,<br />

Australian Border<br />

Force<br />

Speaking at the conference, Australian<br />

Border Force Deputy Commissioner<br />

Mandy Newton said government<br />

had been “extensively” exploring the<br />

implementation of the trade “single<br />

window”, a digital interface between<br />

government and industry.<br />

“Ultimately it’s a decision by the<br />

government, whether they wish to proceed<br />

in a particular financial year,” she said,<br />

noting that the scoping for the project had<br />

been extensive.<br />

Ms Newton said the ABF was keen to<br />

continue to engage with industry to refine<br />

its processes.<br />

calling for coastal shipping reform.<br />

“[Labor is] determined to not be a party<br />

in destroying a proud Australian industry,”<br />

he said during his address to the conference.<br />

Coastal shipping reform, he said, is<br />

essential for bringing back the maritime<br />

jobs that would feed into the upper levels of<br />

the profession.<br />

“You need a maritime sector and<br />

maritime skills, who’s going to run the<br />

ports if you don’t have a maritime sector?<br />

Who’s going to be the harbour masters?<br />

Vision!” he told Daily Cargo News on the<br />

sidelines of the conference.<br />

“It’s a matter of understanding that<br />

there’s a national interest,” he said.<br />

Mr Albanese also spoke about protecting<br />

transport corridors, the missing link in<br />

Inland Rail (Acacia Ridge to Port of Brisbane),<br />

and even quoted Adam Smith, who wrote<br />

about coastal shipping in 1700s Britain.<br />

Michael Gallacher,<br />

CEO, Ports Australia<br />

The conference concluded with Ports<br />

Australia CEO Michael Gallacher giving an<br />

impassioned speech about how the actors in<br />

the supply chain need to stick together<br />

“Coastal shipping is an issue that we<br />

won’t agree on. There are competitive issues<br />

there, I get that,” he said.<br />

“But that’s only a small part of it. When<br />

we go to government, they can’t pick us<br />

off, playing one against the other playing<br />

the game of the weakest link. We cannot<br />

have that. The supply chain if it’s going to<br />

be a chain, has to be a strong, unbreakable<br />

bond, and that means trust, and that<br />

means working together.”<br />

thedcn.com.au October 2018 29


LINDER TRADES TO NORTH AMERICA<br />

Conservation<br />

Trekandshoo<br />

30 October 2018<br />

thedcn.com.au


&<br />

Costs<br />

for shipping keep going up while freight rates<br />

remain stubbornly down. Carriers in the trade between<br />

Australia and North America are re-thinking their<br />

services to ensure survival, Dale Crisp reports<br />

Long Beach, California<br />

To dig below the surface of some of<br />

Australasia’s long distance direct<br />

services is to discover the fragility that<br />

lurks just out of sight.<br />

Shipping lines that have long<br />

defended the viability of such operations<br />

– even when all around them have, for 20<br />

years or more, been predicting their demise<br />

– sense the pressures building up.<br />

The volumes available do not support<br />

the deployment of larger ships on the<br />

frequency the market requires, yet the<br />

received wisdom is “bigger is better”, and<br />

so the pursuit of economies of scale have<br />

come at the expense of modern designs and<br />

newbuilding orders for route-appropriate<br />

lesser trades.<br />

Bunker and charter costs rise and fall,<br />

but the overall trend is for fixed system<br />

costs to keep increasing – while freight<br />

rates in some Oceania trades have not<br />

risen for years and in real terms have gone<br />

decidedly backwards.<br />

Reliable profits are harder to come by,<br />

resources deployed are out of kilter with<br />

returns available, and there’s always the<br />

(rightful) suspicion that customers don’t<br />

really appreciate what they’ve got, anyway.<br />

The trades between Australia and the<br />

East and West Coasts of North America<br />

had been stuck in a kind of benign neutral<br />

gear for year upon year.<br />

Then, in late 2017 came news of a<br />

significant shake-up of a major East Coast<br />

service and by the end of 2018 there’ll be<br />

a radical overhaul of West Coast links.<br />

Talk to carriers and you’ll find they’re busy<br />

throwing switches to try and ensure these<br />

direct services have a long-term future, to<br />

keep faith with shippers while still making<br />

a buck, to best fit supply to demand when<br />

these bi-coastal trades are – with the end<br />

of so much Australian manufacturing - so<br />

dependent on agricultural outputs that are<br />

seasonal, fluctuating and unpredictable.<br />

Let’s deal with the East Coast first.<br />

THE EAST COAST TRADE<br />

At the time of this review last year, the<br />

news was all about the forthcoming CMA<br />

CGM/Marfret/Seatrade vessel sharing<br />

agreement, combining the French carriers’<br />

long-standing PAD NASP fortnightly<br />

service to-from Europe via the east coast<br />

North America (ECNA) with the Dutch/<br />

Belgian reefer specialist’s early-2017<br />

launched Meridian service following a<br />

similar route every 10 days.<br />

However, as catalogued in Daily Cargo<br />

News’ recent review of ANZ-Europe liner<br />

trades, the VSA was stillborn, thanks to<br />

Seatrade’s financial difficulties. Instead,<br />

eventually, the market got what it desired<br />

when CMA CGM committed to taking PAD<br />

weekly, underpinned by a three-year contract<br />

with NZ kiwifruit exporter Zespri. The new,<br />

faster, 13-ship service took three months to<br />

roll out but was widely applauded by shippers.<br />

And trade figures appear to show CMA CGM,<br />

junior partner Marfret and slot-charterer<br />

(and CMA CGM Group member) ANL all<br />

liftings in the ECNA trade as a result of the<br />

improved product.<br />

BUMPS IN THE ROAD<br />

All wasn’t plain sailing. A 91-day round<br />

voyage offered unwelcome opportunities<br />

for delays without much schedule slack for<br />

recovery: ships skipped some Australian<br />

port calls to meet Zespri’s NZ export<br />

deadlines and stresses grew too great.<br />

Firstly, Nelson and London Gateway calls<br />

were stripped back to fortnightly, and<br />

then dropped altogether, and Napier was<br />

omitted. “Seasonal adjustments,” was the<br />

proffered explanation.<br />

thedcn.com.au October 2018 31


LINDER TRADES TO NORTH AMERICA<br />

FLEET MANOEUVRES<br />

In the past 12 months, changes to the West Coast fleets have<br />

been modest, as might be expected from the foregoing report,<br />

although there has been a general trend towards larger vessels<br />

– either as a portent of the service rationalisation or, more<br />

likely, a consequence of charter market availability.<br />

The OVSA PNW string has, until last month, operated with<br />

the same four ships: the Hamburg Süd-operated, 2741-TEU Cap<br />

Blanche and Cap Pasado, and the Hapag-Lloyd contributions<br />

2490-TEU BSL Limassol and 2546-TEU Balao. Ahead of the<br />

service consolidation, Cap Blanche was replaced in early<br />

September by the 2646-TEU Botany Bay.<br />

The PSW has seen some comings and goings, although<br />

constants remain: HLL’s 3534-TEU Northern Dexterity, HSD’s<br />

3868-TEU Cap Capricorn and PIL-branded Kota Ekspres, while<br />

a third sister, Cap Corrientes, was handed back to owners in<br />

February and replaced by the 4526-TEU Melina.<br />

All three ANL PSW ships have been changed: In October<br />

2017 the ANL-chartered Seaspan Loncomilla (4253 TEU) was<br />

replaced by a sister ship, ANL Warrnambool, while in April the<br />

long-serving 3586-TEU ANL Barega was replaced by the 4253-<br />

TEU ANL Tongala. More recently, in August, the 4253-TEU ANL<br />

Warragul (which has become something of a television star<br />

thanks to featuring in the series “The Pacific in the wake of<br />

Captain Cook”) was off-hired and replaced, temporarily, by the<br />

5040-TEU ANL Walwa.<br />

CONSOLIDATION<br />

As detailed earlier, with the consolidation of the two strings<br />

later this year the total OVSA fleet will initially stand at eight<br />

ships of average 4250 TEU, with Maersk providing four and<br />

ANL and HLL two each. Thus, as well as the four departing<br />

PNW ships, the current HSD and HLL contributions in the PSW<br />

service will be upsized. It is planned that each carrier will have<br />

representation in each alternating loop.<br />

Swire Shipping’s WCNA liner service has completed its<br />

transition to an almost entirely breakbulk operation, with<br />

the two 2082-TEU MPPs Siangtan and Shengking redeployed<br />

elsewhere in the company’s network and replaced by three<br />

B.Delta 39 handysize bulk carriers with limited container<br />

capacity. Eriskay, Pakhoi and Pekin are still offering scheduled<br />

southbound sailings from WCNA to ANZ but then backload logs<br />

for East Asia and where they join Swire’s trans-Pacific multibulk<br />

service to reposition to WCNA.<br />

On the two East Cost services, there has also been some<br />

fleet and capacity change, highlighted, logically, by the upgrade<br />

of PAD/NASP to weekly frequency that took effect from early<br />

this year. With 13 ships required to achieve that status – and<br />

round-voyage duration improved from 98 to 91 days – it took<br />

PAD/NASP several months to reach full deployment, using a<br />

combination of carryovers from the fortnightly service and<br />

tonnage “inherited” from the Seatrade Meridian service.<br />

Thus the fleet currently comprises: four Hyundai Mipo<br />

2800s – Santa Bettina, Harmony N, CMA CGM Pointe des Salines<br />

and Moen Island; three Samsung/Hyundai 2500s – Bomar Calais,<br />

AS Petronia and EM Corfu; two SDARI 2500s – Nordserena and<br />

Nordpacific; and four 2259-TEU colour class – Seatrade White,<br />

Seatrade Blue, Seatrade Red and Seatrade Orange.<br />

Forward schedules show that when the seasonal reversion<br />

to fortnightly frequency takes place – effective northbound/<br />

eastbound from early November until end-March – the service<br />

will be maintained by seven ships, presently listed (in sailing<br />

order) as Seatrade Orange, Nordpacific, Santa Bettina, Seatrade<br />

Red, Nordserena, EM Corfu and Seatrade Blue.<br />

TONNAGE SHUFFLE<br />

On the Maersk/HSD OC1/Trident service – now really a unified<br />

product given Maersk’s ownership of HSD – there has been a<br />

tonnage shuffle, driven by drydocking and other requirements<br />

and which has seen a marginal upsizing of vessels deployed.<br />

The 4256-TEU Bernhard-S, which was chartered last year to<br />

cover drydockings of the HSD-operated, 3630-TEU spirt class,<br />

was retained in the service in place of one of the latter, and last<br />

month was renamed ALS Jupiter following sale to new owners<br />

but remains in OC1/Trident. Early this month a sister ship,<br />

Elisabeth-S, replaced Spirit of Auckland, leaving four of the latter<br />

class remaining: Spirit of Singapore, Spirit of Shanghai, Spirit of<br />

Hamburg and Spirit of Sydney.<br />

From the Maersk pool, the 3364-TEU Maersk Izmir, Maersk<br />

Inverness and Maersk Innoshima are deployed (as of late<br />

September) along with the 3028-TEU Olga Maersk; the I class<br />

ships have progressively replaced the 3194-TEU B class, while<br />

also providing cover for drydocking of O-class vessels that have<br />

been swapped in and out of this service as well as Maersk’s<br />

YoYo and Northern Star. The 4255-TEU Harrier Hunter made one<br />

January/February voyage in Maersk Brani’s stead before<br />

being replaced by the returning Spirit of Shanghai.<br />

The total OC1/Trident service remains<br />

stable at eight ships.<br />

Sheila Fitzgerald<br />

32 October 2018<br />

thedcn.com.au


But then – just after the DCN feature<br />

lauding the weekly PAD/NASP was<br />

completed for publication – came an<br />

announcement of a more comprehensive<br />

“seasonal adjustment”. From mid-September<br />

ex-Europe (end-October in ANZ) PAD/<br />

NASP will revert to a fortnightly format “to<br />

maintain service continuity while adjusting<br />

capacity to the market demand”.<br />

So, for six months – effectively the<br />

NZ low season for fruit exports – PAD/<br />

NASP will operate on a rotation of<br />

London Gateway, Zeebrugge (until 06/11),<br />

Rotterdam, Dunkirk, Le Havre, New York,<br />

Savannah, Cartagena, Papeete, Noumea,<br />

Brisbane, Sydney, Melbourne, Tauranga,<br />

Manzanillo, Savannah, Philadelphia and<br />

back to London. The fleet will contract to<br />

seven ships of 2259-2824 TEU, all with a<br />

nominal 600 reefer plugs. Weekly service<br />

will resume mid-February from Europe and<br />

end-March from ANZ.<br />

“Hardly ideal,” was one affected party’s<br />

teeth-grinding assessment of the situation.<br />

“Finally we have the product the market was<br />

asking for, we make commitments to existing<br />

shippers and entice new ones, supply chains<br />

get modified accordingly, and then the whole<br />

thing goes into reverse. Very disappointing.”<br />

But some insiders are more<br />

understanding, if reluctantly. “When the<br />

PAD ships are full, seasonally, in either<br />

direction to or from ECNA (and/or Europe)<br />

the whole shebang looks justifiable as<br />

weekly,” one explains. “But the rest of the<br />

time it’s red ink. ECNA rates are always<br />

weaker than WCNA. It’s a long, thin<br />

service with high fixed costs for small<br />

ships, and bunkers.”<br />

A well-placed observer suggests that,<br />

alas, the weekly PAD was more “nice to<br />

have” than “need to have” for all but a few<br />

months of the year. “CMA always wanted<br />

to go weekly and heaven knows they’ve<br />

had a few half-pregnant attempts. Then<br />

Seatrade fell over, the Zespri opportunity<br />

opened up, and MSC was sniffing around.<br />

They had to do what they had to do – and<br />

now they’ve had to do it again, when<br />

volumes are down to unprofitable levels.”<br />

The insider again: “It’s all about<br />

survivability of the service. Fortnightly is<br />

better than nothing, and nothing is what<br />

it will end up being if it’s losing millions.<br />

And just around the corner is 2020 [when<br />

low-sulphur fuel regulations will massively<br />

increase ship-operating costs]. We’ve got to<br />

take pain now for long-term gain.”<br />

“EYE-WATERING”<br />

Meanwhile, CMA CGM is to revive a<br />

previous slot-charter arrangement – “at<br />

eye-watering cost” with Maersk on the<br />

competing OC1 service to ensure it keeps<br />

weekly faith with ECNA customers, via a<br />

reported 225 TEU southbound and 150 TEU<br />

northbound.<br />

Long-term survivability is what’s driving<br />

the somewhat radical shake-up of the ANZ-<br />

WCNA services, too.<br />

At the time of writing the plan was yet to<br />

be formally announced in Australia and New<br />

Zealand but from the end of November the<br />

Oceania Vessel Sharing Agreement (OVSA)<br />

will begin transitioning from the current<br />

set-up of two separate but interlocking<br />

strings to a single, twin-loop operation.<br />

Sources say OVSA members are cautious<br />

about revealing full details ahead of<br />

official approval from the US Federal<br />

Maritime Commission and the lockingdown<br />

of port and terminal windows in<br />

ANZ. It is understood the FMC has a<br />

mandatory 45-day review period following<br />

lodgement of any new or modified<br />

agreement and that took effect from 28<br />

August. If there are any challenges, that<br />

45-day clock is re-set.<br />

From the FMC documents, published<br />

on their website (and filed under the<br />

southbound trade designation US Pacific<br />

Coast-Oceania Agreement), the structure<br />

of the new service can be discerned. It can


LINDER TRADES TO NORTH AMERICA<br />

also be seen that ANL is now the sole CMA<br />

CGM Group entity in the agreement, while<br />

Hamburg Süd’s rights and membership has<br />

been novated to Maersk Line.<br />

Whereas the OVSA now operates two<br />

distinct services, fortnightly Pacific North<br />

West (PNW, using four 2500-2700 TEU<br />

vessels) and weekly Pacific South West<br />

(PSW, with seven 3500-4500 TEU vessels)<br />

the ‘new OVSA’ will utilise a total of<br />

eight average-4250 TEU ships, split evenly<br />

between a weekly loop and a fortnightly<br />

loop, and with each OVSA member having<br />

several vessels in each. Of the eight,<br />

Maersk will have four, ANL two and<br />

Hapag-Lloyd two.<br />

DCN understands that existing PSW<br />

slot-charterers MSC and PIL will retain<br />

their allocations on the new service; the<br />

FMC lists those current allocations as 200<br />

slots per week each way for what MSC<br />

designates its Oceania Express Loop 1,<br />

and 425 slots per week, southbound only,<br />

on PIL’s Americas Oceania Service. Both<br />

agreements date from 2014.<br />

The new format will see Auckland, Sydney,<br />

Melbourne, Tauranga, Long Beach and<br />

Oakland covered by the weekly loop, while<br />

Papeete, Auckland, Sydney, Melbourne,<br />

Adelaide, Tauranga, Vancouver, Seattle and<br />

Long Beach will be on the fortnightly roster<br />

(this subject to confirmation).<br />

To many observers this consolidation<br />

is no surprise, but OVSA members are<br />

nevertheless nervous about the change –<br />

especially since these services are effectively<br />

the only game in town for direct links<br />

between ANZ and WCNA.<br />

Sources say that this preys heavily on<br />

shippers’ minds, fearing that the revised<br />

service will be particularly vulnerable to<br />

disruption, space restrictions and – of<br />

course – rate gouging. OVSA members<br />

have been at pains to re-assure authorities<br />

and shipper representatives that their<br />

intentions are all good; there are absolutely<br />

no plans for voyage blanking (“just not<br />

practical in this trade”), voyage times will<br />

REGULAR ANZ DIRECT CONTAINERISED SERVICES TO/FROM NORTH AMERICA<br />

CARRIER/SERVICE PORT ROTATION FREQUENCY VESSELS<br />

PACIFIC COAST<br />

Oceania Vessel Sharing Agreement<br />

(ANL/Hamburg Süd/Hapag-Lloyd)<br />

Pacific South West [1][7]<br />

Oceania Vessel Sharing Agreement<br />

(ANL/Hamburg Süd/Hapag-Lloyd)<br />

Pacific North West [1][7]<br />

Mediterranean Shipping Co<br />

Oceania Express Loop 1<br />

Melbourne, Sydney, Tauranga, [Papeete], Oakland, Long Beach,<br />

Auckland, Melbourne<br />

Sydney, Melbourne, Adelaide, Auckland, [Suva/Honolulu],<br />

Vancouver, Seattle, Oakland, Tauranga, Sydney [2]<br />

Slot charter agreement with<br />

Oceania VSA PSW – see above<br />

Fixed-day<br />

Weekly<br />

Fixed-day<br />

Fortnightly<br />

Fixed-day<br />

Weekly<br />

1 x 5040 TEU<br />

1 x 4526 TEU<br />

2 x 4253 TEU<br />

2 x 3868 TEU<br />

1 x 3534 TEU<br />

1 x 2741 TEU<br />

1 x 2646 TEU<br />

1 x 2546 TEU<br />

1 x 2490 TEU<br />

See above<br />

Oceania Vessel Sharing Agreement [8]<br />

(ANL/Hapag-Lloyd/Maersk Line)<br />

Sydney, Melbourne, Adelaide*, Sydney, Tauranga, [Papeete*],<br />

Oakland, Vancouver*, Seattle*, Long Beach, Auckland, Sydney<br />

Fixed-day weekly<br />

*Fortnightly<br />

8 x c.4250 TEU<br />

Pacific International Lines<br />

America Oceania Service<br />

Slot charter agreement with<br />

Oceania VSA PSW – see above<br />

Fixed-day<br />

Weekly [3]<br />

See above<br />

Swire Shipping<br />

WCNA [4]<br />

Brisbane, Melbourne, Tauranga, [Dalian, Busan/Mokpo]<br />

Portland, Vancouver BC, Everett, Long Beach, Brisbane [5]<br />

Every 35 days 3 x B.Delta 39<br />

ATLANTIC COAST<br />

CMA CGM<br />

PAD2<br />

CMA CGM/Marfret/ANL^<br />

PAD/NASP/AUS1<br />

(^non vessel operating slot-charterer) [6]<br />

CMA CGM/Mafret/ANL^/<br />

Seatrade<br />

PAD/NASP/AUS1/Meridian<br />

(^non vessel operating slot-charterer) [6]<br />

Hamburg Süd/Maersk Line<br />

Trident/OC1<br />

Revived slot charter agreement with Maersk on OC1, effective<br />

November 2018<br />

Brisbane, Sydney, Melbourne, Tauranga, Manzanillo, Savannah,<br />

Philadelphia, (London Gateway, Rotterdam, Dunkirk, Le Havre),<br />

New York, Savannah, Cartagena, (Papeete, Noumea), Brisbane<br />

Brisbane, Sydney, Melbourne, Tauranga, Manzanillo, Savannah,<br />

Philadelphia, (Zeebrugge, London Gateway, Rotterdam,<br />

Dunkirk, Le Havre), New York, Savannah, Cartagena, (Papeete,<br />

Noumea) Brisbane<br />

Sydney, Melbourne, Timaru#, Port Chalmers, Napier, Tauranga,<br />

Auckland, (Cristobal, Manzanillo {Panama}, Cartagena),<br />

Philadelphia, Charleston (Cartagena, Balboa), Auckland, Sydney<br />

Fixed-day<br />

Weekly<br />

Fixed-day<br />

Fortnightly<br />

Fixed-day<br />

Weekly<br />

Fixed-day<br />

Weekly<br />

#temporary<br />

See below<br />

1 x 2824 TEU<br />

1 x 2556 TEU<br />

2 x 2506 TEU<br />

3 x 2259 TEU<br />

4 x 2824 TEU<br />

3 x 2556 TEU<br />

2 x 2506 TEU<br />

4 x 2259 TEU<br />

2 x 4243 TEU<br />

4 x 3630 TEU<br />

3 x 3364 TEU<br />

3 x 3028 TEU<br />

Hapag-Lloyd<br />

ANP<br />

Slot charter agreement with Maersk on OC1 – see above<br />

Fixed-day<br />

Weekly<br />

See above<br />

Mediterranean Shipping Co<br />

Oceania Express Loop 2<br />

Slot charter agreement with Hamburg Süd/Maersk Line on<br />

Trident/OC1<br />

Fixed-day<br />

Weekly<br />

See above<br />

KEY: The above itinerary only covers ports called between Australia and last discharge port in the region covered by this survey; those ports in italics are those called but not within<br />

the range of this analysis; square brackets indicates alternating or less-frequent calls. [1] The VSA lines involved in these loops share space on both, although allocations differ; MSC<br />

and PIL have no slots on PNW. [2] Seattle/Tacoma now jointly managed under NW Seaport Alliance [3] PIL AOS southbound/westbound only. [4] Principally breakbulk but operating<br />

a liner service schedule southbound [5] Northbound rotation now via Asia but southbound frequency maintained [6] From end October (northbound) until end March this service<br />

will revert to fortnightly frequency [7] From November OVSA will consolidate to a single string [8] Proposed single-string OVSA effective November 2018; full details to be confirmed.<br />

Tables compiled week ending September 20. © Dale Crisp 2018<br />

34 October 2018<br />

thedcn.com.au


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LINDER TRADES TO NORTH AMERICA<br />

STATS TELL THE STORY<br />

Carriers say the trade between Australasia and North<br />

America is “stagnant at worst and steady at best” and they’re<br />

not anticipating much change ahead, either in volumes or<br />

cargoes carried.<br />

EAST COAST<br />

PIERS/Journal of Commerce figures show total northbound<br />

trade from Oceania to ECNA in 2017 stood at just under 76,000<br />

TEU, with Hamburg Süd (HSD) the clear market leader (21,500<br />

TEU), followed by Maersk (15,500), CMA CGM (13,100), MSC<br />

(11,200), Hapag-Lloyd (HLL, 6500), ANL (3800), Marfret (2300)<br />

and then transhippers, led by OOCL (1000). Given MSC has only<br />

a modest weekly allocation on the Maersk/HSD OC1/Trident<br />

service, it can be assumed that the majority of its liftings are<br />

moving via transhipment.<br />

Until the end of July 2018, ECNA northbound had reached<br />

around 57,500 TEU, with HSD still dominating but Maersk<br />

and CMA CGM running neck-and-neck, doubtless the latter<br />

benefitting from the now-weekly PAD/NASP, which also<br />

boosted Marfret’s liftings.<br />

Southbound from the East Coast total 2017 volume to<br />

Oceania came close to doubling northbound, at 101,700 TEU.<br />

HSD again led the way amongst direct service providers with<br />

29,160 TEU, ahead of Maersk (24,700 TEU), CMA CGM (15,400),<br />

MSC (8700), HLL (7650), ANL (7400) and Marfret (which does<br />

not focus on this trade lane, 192 TEU).<br />

MSC’s direct service allocation is limited, so much of its<br />

share must be relay cargo; other leading transhippers for 2017<br />

were OOCL (4100 TEU), Mitsui OSK (1200) and COSCO Shipping<br />

Lines (1100).<br />

For the first seven months of 2018 carriers combined to<br />

ship a little over 47,000 TEU southbound from the East Coast.<br />

While HSD, Maersk and CMA CM remained at numbers 1, 2 and<br />

3, ANL overtook MSC and HLL; and amongst the transhippers,<br />

COSCO SL was hot on the heels of OOCL.<br />

WEST COAST<br />

Northbound to WCNA stood at almost 92,500 TEU in 2017.<br />

Again, HSD was a clear leader, followed by ANL, HLL and MSC.<br />

Relay service providers were also led by OOCL, followed by<br />

Maersk and Evergreen but again their volumes are modest<br />

although much greater than to the East Coast.<br />

As at end-July 2018, West Coast northbound had almost<br />

reached 63,000 TEU with no change in the pecking order<br />

amongst the direct service providers; however Maersk and<br />

Evergreen had swapped places amongst the relay operators<br />

and Matson has made a notable entry, registering 391 TEU for<br />

the seven months (and in so doing exceeding Maersk) against a<br />

2017 total of just a single TEU.<br />

Southbound from WCNA, carriers achieved total liftings of<br />

142,600 TEU in 2017. Strongest was HSD with around 48,500<br />

TEU followed by ANL with 37,500 TEU, HLL (18,100 TEU), MSC<br />

(8400) and PIL (6800). Swire Shipping carried almost 1900 TEU<br />

in 2017. Of the transhippers, OOCL was particularly strong at<br />

10,900 TEU, followed by Maersk at 4900, COSCO SL at 2850 and<br />

Yang Ming Line at 1350 TEU.<br />

At July 31, 2018 southbound WCNA liftings stood at 66,500<br />

TEU, with direct service market order unchanged at HSD, ANL,<br />

HLL, MSC, PIL and Swire, while Maersk had overtaken OOCL in<br />

the transhipper rankings.<br />

not change, reliability should improve and<br />

rates will surely be held in check by the<br />

ever-present fluctuating influence of relay<br />

operators.<br />

A LOSING TRADE<br />

The PNW service has been steadily losing<br />

money for a long time, sources say,<br />

and Adelaide calls in particular regular<br />

casualties of schedule delays.<br />

“We [OVSA member carriers] have had<br />

to look at what risk PNW has posed to the<br />

entire service structure,” a manager said.<br />

“The ships are too small to be efficient but<br />

we need to maintain coverage. We had<br />

to find a way to make the service viable<br />

and yet meet customer requirements. And<br />

although it might look as though we’re<br />

pulling a lot of capacity off the WCNA<br />

route, the larger ships that have gradually<br />

been swung in over the last 12 months or<br />

so have not been fully allocated out, so we<br />

don’t think space is going to be a problem.”<br />

Year-to-date utilisations on PNW are<br />

said to be running at just 70%, and on the<br />

(capped capacity) PSW at 85%.<br />

The provisional FMC agreement reveals<br />

the partners are providing for as many as 11<br />

ships, suggesting the new formula can/will<br />

be adjusted if dependable schedule-keeping<br />

proves challenging and/or space tightens.<br />

Will the new service structure open the<br />

way for interlopers? After all, the ANZ-<br />

WCNA route has played host to some<br />

famous outsiders, including ANZDL, Fesco<br />

Australia North America Line (FANAL),<br />

US Lines (the re-born ANZDL) and Pacific<br />

International Lines, which ran its own<br />

southbound service for some time in<br />

competition with OVSA. MSC threatened<br />

to do so, before striking a deal with OVSA.<br />

Carrier sources are confident they’re<br />

not opening up the trade to unwanted<br />

competition.<br />

“Growth has been nothing to write<br />

home about for many years now, despite the<br />

free-trade agreement. As others have found<br />

in the past, just putting in a new service or<br />

extra ships doesn’t magic up more cargo,”<br />

an executive said.<br />

“Rates are, in the main, pathetic. Apart<br />

from a spike here and there of a few<br />

dollars they haven’t really gone up and not<br />

noticeably down. Whenever we announce<br />

a GRI, southbound or northbound, east<br />

coast or west coast, you can pretty much<br />

guarantee we won’t get the full amount and<br />

what we might get fritters away.<br />

“MSC and PIL, through their slot deals,<br />

have unique insight into the composition<br />

and strengths and weaknesses of the trade,<br />

for example. Semi-regularly they’re not<br />

filling their own allocations, and they don’t<br />

appear to be rate-cutting to try to do so. So<br />

surely they’re not going to rock the boat.”<br />

Another said: “I know shipping lines<br />

are masters of finding new ways to lose<br />

money but I don’t see room for any new<br />

entrants on the west or east Coasts. I know<br />

Seatrade was more about Europe, and there<br />

were other issues at play, but there’s your<br />

perfect recent example of unnecessary and<br />

unsuccessful”.<br />

Asked about the prospects of a newcomer<br />

seizing the day after the OVSA revamp,<br />

another simply said. “It would not be an<br />

intelligent move”.<br />

So assuming all approvals, it’s heads<br />

down and bums up for the OVSA overhaul.<br />

“The immediate and ultimate priority<br />

is to bed the new service in,” the trade<br />

manger said.<br />

“We have to ensure customers don’t<br />

suffer – and we don’t either!”<br />

36 October 2018<br />

thedcn.com.au


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REGIONAL PORTS<br />

Viking Destiny offloads<br />

mining equipment at Port<br />

of Mackay<br />

New trades & infrastructure<br />

Xxxxxxxxx Image supplied<br />

38 October 2018<br />

thedcn.com.au


Regional ports are<br />

upgrading and adding<br />

infrastructure to move<br />

more cargo and more<br />

different kinds of cargo,<br />

Ian Ackerman reports<br />

Change and diversification is the name<br />

of the game for many of Australia’s<br />

regional ports, with many investing<br />

in infrastructure to accommodate<br />

larger and more diverse ship types.<br />

North Queensland Bulk Ports has<br />

recently seen a program of refurbishment<br />

and upgrades paid off with the recent<br />

call of the first ro-ro vessel at the Port of<br />

Mackay with a shipment of Caterpillar<br />

794AC mining trucks.<br />

NQBP former acting CEO (and current<br />

general manager trade and operations)<br />

Brendan Webb told Daily Cargo News the<br />

upgrades that enabled the Höegh ro-ro<br />

vessel Viking Destiny to call at Mackay were<br />

part of a planned upgrade and maintenance<br />

investment.<br />

“The first major thing we needed were<br />

fender upgrades on berths 3 and 4,” he said.<br />

“And, rather than just replicate new for old,<br />

our engineering team looked at what we<br />

needed to do to create a roll-on, roll-off ramp.”<br />

Mr Webb said the complete works cost<br />

$9.8m, and of that, the cost of converting<br />

the wharf to accept ro-ro cargo was about<br />

$1m, backed by the idea of bolstering<br />

Mackay’s capacity to be a multi-user, multifunctional<br />

port.<br />

The engineering team signing off on<br />

the viability of the ro-ro upgrade was only<br />

the first step in bringing it to fruition, the<br />

second step involved the seafarers who<br />

would bring these ships into the port.<br />

Mr Webb said the pilots who work at the<br />

Port of Mackay spent many hours at the<br />

Smartship simulator in Brisbane to work<br />

out if it was actually possible to safely<br />

“In this case the influences in the<br />

supply chain would be shipowners, freight<br />

forwarders, stevedores, ship agents, the<br />

people buying the equipment, the people<br />

selling the equipment and the people that<br />

manufacture the equipment,” he said.<br />

The manufacturers, Mr Webb said,<br />

were a crucial last link in the chain, as the<br />

supply chain wasn’t yet proven or tested.<br />

“It’s quite a journey to change an<br />

existing supply chain or to create a new<br />

one,” he said.<br />

“We were looking for that early adopter,<br />

the first one to take the leap of faith. Once<br />

you get them going, the others get some<br />

trust in it and see that it can work.”<br />

“It’s a long way to send a ship with a<br />

cargo that may or may not have penalty<br />

rates on it. That to me was the magic<br />

ingredient, once we had the other physical<br />

things in place.”<br />

He said there was some “folklore” that<br />

ro-ro calls wouldn’t work at Mackay, “but<br />

that’s really just urban myth, to be honest”,<br />

he said.<br />

The first ro-ro call to Mackay, in late August<br />

went off without a hitch, Mr Webb said.<br />

“The weather was kind, and it went<br />

really well,” he said. “It had been a long<br />

time coming for our employee group, so<br />

there was a real sense of teamwork, and a<br />

lot of enthusiasm and joy afterwards, it was<br />

good to see.”<br />

DIVERSIFICATION<br />

Mr Webb said the ability for ro-ro vessels<br />

to call at Mackay would hopefully lead<br />

to increasing diversification of cargoes<br />

We were looking for that early adopter,<br />

the first one to take the leap of faith.<br />

Xxxxxxxxx NQBP Image supplied<br />

A great deal of<br />

preparation went into<br />

enabling the first ro-ro<br />

call to Mackay<br />

navigate ro-ro ships into the harbour.<br />

“These are all no-go gates,” Mr Webb<br />

said. “If you can’t do it engineering-wise,<br />

that’s the end of it. If you can’t do it<br />

pilotage-wise, that’s the end of it.”<br />

The third step was having the regional<br />

harbour master sign off on it, and the<br />

fourth step was freeing up berth-support<br />

infrastructure in the port area, making<br />

laydown area available.<br />

The fifth step in enabling Mackay to<br />

accept ro-ro calls was to look into the<br />

business-development side, identifying<br />

all the influences in the supply chain, Mr<br />

Webb explained.<br />

through the port, with agricultural<br />

equipment and more mining vehicles and<br />

mining equipment.<br />

“Tyres for mining vehicles are quite a<br />

large consumable item that goes through<br />

an established supply chain, and then<br />

they may be maybe light vehicles, or heavy<br />

on-road trucks,” he said, highlighting Port<br />

of Mackay’s proximity to the Bowen Basin.<br />

“If you’re talking about a piece of mining<br />

equipment that is 7-10 metres wide coming<br />

down a road from a major capital city –<br />

Sydney, Melbourne or Brisbane – the average<br />

road once you get out of the cities is eight<br />

metres wide, both lanes,” Mr Webb said.<br />

thedcn.com.au October 2018 39


REGIONAL PORTS<br />

“There are also police escorts, private<br />

escorts, there are three or four vehicles<br />

escorting that one truck; from a safety<br />

perspective, and an infrastructure integrity<br />

perspective, the fewer kilometres travelled<br />

the better.”<br />

WHERE DOES THE DEMAND COME FROM?<br />

While the demand for more ro-ro capacity at<br />

the Port of Mackay comes from an increase<br />

in mining activity, it is not just a ramping<br />

up of production that is the main driver.<br />

“There are many things that are driving<br />

this. Yes we’re putting out some good<br />

coal and we’ve hit a record as an overall<br />

business, but it isn’t what’s driving the<br />

equipment coming in,” Mr Webb said.<br />

He explained that after the big mining<br />

boom ended several years ago, the mining<br />

companies in the area pared back their<br />

maintenance and upkeep programs.<br />

“[Companies are now] catching up on<br />

replacing equipment that has worn out,<br />

A container ship calling at Port of Townsville<br />

and catching up on maintenance that has<br />

been really put off for the past five years,”<br />

he said.<br />

“A good mining machine averages 10<br />

years of life. They haven’t replaced many,<br />

if any, mining machines for five years,<br />

so some machines are well past their<br />

Blue highway the best highway<br />

Coastal shipping stands to benefit regional ports around<br />

Australia’s coast<br />

Coastal shipping is the hot topic of the day around industry circles. Arguments<br />

about how reform should be carried out, and what it should look like are manifold,<br />

but it is safe to say that industry agrees something needs to be done.<br />

Regional ports could see major benefits from a revitalisation of coastal shipping,<br />

with opportunities to grow bulk and container trades, moving freight from rail and<br />

road onto ships.<br />

Ports Australia CEO Michael Gallacher told DCN regional ports would benefit<br />

from increased coastal shipping, as it would provide a way for them to expand<br />

throughput, and also boost jobs in the towns where the ports are located.<br />

“If you start to expand the things that ports are doing around the country, you’re<br />

going to need more people to do it, these ports won’t be relying on automation<br />

because they won’t have the critical mass of throughput to justify the introduction<br />

of automated processes in the main,” he said.<br />

“Therefore, it’s going to rely on people to move freight around the country,<br />

around the ports, around the regional communities where they reside.”<br />

Brendan Webb of NQBP pointed out that moving freight by sea was logical.<br />

“You don’t have to maintain the ocean,” he said.<br />

“The country is struggling with congestion in major metropolitan areas, and it’s<br />

struggling with the cost of infrastructure needing maintenance and upkeep.<br />

“There’s a logical sense to use the blue highway, as Ports Australia call it, and you<br />

can bring your bigger vessels in from overseas and tranship out of Brisbane, or any<br />

of the major ports, and bring it into Gladstone, Mackay, Townsville or Cairns in the<br />

Queensland language.”<br />

Mr Webb also said more coastal shipping would be a boon when bad weather<br />

knocks out land-transport routes.<br />

“When the Bruce Highway gets cut, the shipping can keep going,” he said. “You<br />

can get in and out of Mackay, or Townsville or Cairns, but you can’t get from one to<br />

the other by road.<br />

“With a regular shipping service, or even an irregular one, you can get your basic<br />

goods up there.”<br />

replacement date. It’s not a boom, it’s just a<br />

lot of catch up.”<br />

THE VIEW FROM TOWNSVILLE<br />

In North Queensland, agricultural<br />

industries including beef, dairy,<br />

aquaculture, fisheries and a variety of<br />

tropical and subtropical horticultural<br />

enterprises, produce an abundance of<br />

perishable commodities.<br />

This agricultural production shows no<br />

sign of decreasing, as there are emerging<br />

agricultural precincts include the Hells Gate<br />

Dam project on the Upper Burdekin River<br />

which wll provide up to 100,000 hectares of<br />

additional irrigated agricultural land.<br />

With good intermodal connectivity<br />

via triple road-train access and rail, the<br />

Port of Townsville acts as a supply hub<br />

for the import and export of more than<br />

30 different commodities, including dry<br />

bulk agriculture and mining products,<br />

liquids, containerised cargo, project cargo,<br />

refrigerated cargo, vehicles and live cattle<br />

exports. The region’s high value growth<br />

corridor is connected to world demand;<br />

75% of the port’s trade is with Asia.<br />

The Port of Townsville’s containerised<br />

cargo capabilities and proximity to highly<br />

productive agricultural regions make it<br />

ideally positioned as a centralised export<br />

distribution hub for North Queensland.<br />

Key capabilities include: regular container<br />

line services; access for type 2 road trains<br />

direct to the port; designated container<br />

berths and terminals; biosecurity services;<br />

and reefer points on three berths.<br />

Additional cold chain supply chain<br />

capabilities at the port are provided by<br />

Harbourside Coldstores, a 4000-pallet<br />

international export accredited cold storage<br />

facility. Harbourside is located within two<br />

kilometres of the Port of Townsville.<br />

Port of Townsville<br />

40 October 2018<br />

thedcn.com.au


Pictured: Tunnel boring<br />

machinery imported via the<br />

Port’s Mayfield 4 berth.<br />

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trade@portofnewcastle.com.au<br />

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linkedin/portofnewcastle


SOUTH AUSTRALIA & THE NORTHERN TERRITORY<br />

A guide into Darwin’s<br />

Just where does Darwin fit into the jigsaw puzzle that is Australian<br />

maritime trade? David Sexton investigates<br />

When providing insights into the<br />

future of Darwin Port, chief<br />

executive Terry O’Connor is<br />

unafraid to look to the past.<br />

“Around Darwin, the Larapinta<br />

people were trading with the Makassans [a<br />

people from what is now part of Indonesia]<br />

before Europeans arrived. Why were [the<br />

Larapinta] trading? Because [Indonesia]<br />

was the natural trading partner,” he said.<br />

“Two hundred years on, we’ve continued<br />

to focus on developing those trading links.<br />

The free-trade agreement with Indonesia –<br />

we need to think what that might mean<br />

for Darwin.”<br />

The CEO was speaking in answer to a<br />

question about the role of Darwin.<br />

Some Australians have dreamed this<br />

tropical city could one day be a flourishing<br />

gateway to the wealth of Asia to our north.<br />

Sceptics have countered that it is simply too<br />

far away from major Australian cities to be<br />

of much use, while also grumbling about<br />

cyclones, heat, flies and crocodiles.<br />

Mr O’Connor is, of course, an optimist<br />

when it comes to talking about Asia, but<br />

also calls for some perspective.<br />

“I think we would be foolish to say<br />

the [Alice Springs – Darwin] railway<br />

is suddenly going to change its usage<br />

overnight. But I think that the reality is,<br />

as a service centre for north Australia, we<br />

have an opportunity to also service the<br />

bottom half of Indonesia.<br />

“That service may be connectivity by<br />

shipping.”<br />

WHAT’S GOING ON?<br />

Activity at Darwin Port is closely<br />

intertwined with the economy of the<br />

Northern Territory and for some insights<br />

on recent developments, Daily Cargo News<br />

approached Professor Rolf Gerritsen, a<br />

professorial research fellow at the Northern<br />

Institute, part of Charles Darwin University.<br />

“Technically, in recession as the ABS<br />

national account figures show,” Professor<br />

Gerritsen said, when asked about the state<br />

of the NT economy.<br />

“It is the wind-down of INPEX [LNG<br />

project]. The INPEX project … had a huge<br />

distortionary effect on the NT. Now it’s<br />

winding down and so all the people are<br />

going and consumption is falling.”<br />

Professor Gerritsen notes a few projects<br />

“in the pipeline” that could aid a recovery.<br />

“It depends partially on whether the<br />

Commonwealth continues the special GST<br />

deal it has with the Territory,” he said.<br />

As well as the special GST revenue<br />

deal, Professor Gerritsen noted the North<br />

Australia Infrastructure Facility was<br />

promised $300m in concessionary loans for<br />

the airport upgrades at Darwin, Katherine<br />

and Alice Springs.<br />

“The most important element of that<br />

NAIF [Northern Australia Infrastructure<br />

Facility] concessional loan is the export<br />

hub that they’re building at the airport in<br />

Darwin,” he says.<br />

“If that gets going, the horticulture<br />

product of the Darwin region is greater<br />

than the horticulture product of the Ord<br />

River region [in north-west WA].<br />

“So if you can provide better access to<br />

markets in South East Asia, then there’s<br />

potential for that to grow.”<br />

A VIEW FROM THE PORT<br />

Professor Gerittsen’s views are reflected by<br />

Terry O’Connor when summing up trade<br />

James Christian<br />

42 October 2018<br />

thedcn.com.au


trading future<br />

Charles Darwin University; Ian Ackerman<br />

trends, albeit the CEO is confident longer<br />

term and notes improvement during the<br />

past 12 months.<br />

He corrects this writer in suggesting<br />

Darwin is primarily a container port.<br />

While it is true Darwin has a respectable<br />

container trade, its largest export is<br />

manganese and there is a significant trade<br />

in such commodities as mineral sands and<br />

rare earths.<br />

Professor Rolf Gerritsen, Charles Darwin<br />

University<br />

“We would call ourselves anything but a<br />

container port. While we have containers<br />

the numbers are relatively small,” Mr<br />

O’Connor said.<br />

LIVE EXPORTS<br />

Darwin is a hub for the live export of cattle,<br />

particularly to places such as Indonesia.<br />

The live animal export trade has been<br />

under a cloud this year, but that was more<br />

focused on sheep from southern ports than<br />

cattle from the north.<br />

A political row erupted seven years ago<br />

when the federal government banned live<br />

cattle exports following cases of extreme<br />

cruelty in overseas destination markets.<br />

The NT does well out of the live cattle<br />

trade – some 260,000 or 270,000 head<br />

were exported last year – so any disruption<br />

would be quite a blow.<br />

“Certainly from our perspective live<br />

cattle have been good,” Mr O’Connor said.<br />

PROJECT CARGO<br />

So-called project cargo is also reported to<br />

have increased during the past 12 months,<br />

with second-hand mine equipment arriving<br />

and then being transferred to mines in<br />

Western Australia.<br />

Another example of specialist cargo is<br />

pipe shipments for the Tenant Creek to Mt<br />

Terry O’Connor, chief executive officer,<br />

Darwin Port<br />

Isa pipeline and more recently the Alice<br />

Springs to Tanami Desert pipeline.<br />

LOOKING FORWARD<br />

Mr O’Connor says the mantra of<br />

“developing the north” remains relevant<br />

even if it is getting less traction than it did<br />

12 to 18 months ago.<br />

“I don’t think that push to develop<br />

northern Australia has gone away. Almost<br />

on a daily basis we have conversations with<br />

people who have all types of operations,”<br />

he said.<br />

“We have lots of space to grow …<br />

modern technology means that the labour<br />

costs aren’t necessarily [such a big factor].<br />

“I still think that our footprint is going<br />

to be in Asia – possibly in the southern<br />

part of the continent rather than Darwin<br />

being some magical entry point for<br />

Australian products going into Asia or<br />

coming into Australia.”<br />

thedcn.com.au October 2018 43


SOUTH AUSTRALIA & THE NORTHERN TERRITORY<br />

Bigger ships to help define Flinders Ports’ future<br />

Large infrastructure projects are setting up South Australia for bigger ships<br />

and bigger freight volumes<br />

A substantial capital expenditure<br />

program is setting up Port Adelaide and<br />

Flinders Ports for the future. Front of<br />

mind is a situation where increasingly<br />

large ships are appearing on the horizon.<br />

Flinders Ports general manager<br />

Captain Carl Kavina says they have<br />

invested more than $320m in capital<br />

expenditure during the past 15 years<br />

to “enhance efficiencies and grow the<br />

business”.<br />

“Longer and wider vessels are<br />

coming into the trade more frequently<br />

which is forcing ports to constantly<br />

upgrade infrastructure, our waterways,<br />

fixed infrastructure and plant and<br />

equipment,” Captain Kavina says.<br />

To address this ongoing operational<br />

challenge, FPH is focusing on several<br />

capital expenditure projects this<br />

year including widening the outer<br />

harbour channel and building a new<br />

wharf access structure for the Port<br />

of Thevenard, an isolated port on the<br />

Great Australian Bight with a focus on<br />

dry bulk exports.<br />

The port operator is also expected<br />

to focus on refurbishing Osborne 1 and<br />

berth 20 in Port Adelaide Inner Harbour.<br />

“The business has successfully and<br />

sustainably grown over the years,”<br />

Captain Kavina says. “The success has<br />

been built around a clear strategy, a<br />

culture that values working with and<br />

respecting all our stakeholders …<br />

and most importantly the quality and<br />

dedication of our employees.”<br />

Flinders Port Holdings (FPH) is<br />

made up of three major businesses:<br />

Flinders Ports, Flinders Adelaide<br />

Container Terminal and<br />

Flinders Logistics.<br />

The Port Adelaide Outer Harbor<br />

channel widening project received<br />

government approvals in June this year<br />

and it is now seeking native vegetation<br />

and dredging licenses.<br />

“Tenders for the project works have<br />

been tendered out and are currently<br />

being evaluated, we would expect to<br />

commence physical dredging towards<br />

the end of the first quarter 2019 with a<br />

completion date towards the end of the<br />

third quarter 2019,” Captain Kavina says,<br />

adding that removal and replacement of<br />

navigational aids would start soon.<br />

He noted that in 2017, the Flinders<br />

Adelaide Container Terminal had 322,690<br />

full TEU cross the wharf.<br />

FPH says there will be “natural growth<br />

in trade, particularly in the containerised<br />

sector which experienced close to 4%<br />

growth last year”.<br />

“The agriculture and mining sector<br />

in SA continues to expand and the FPH<br />

business will continue to look across the<br />

supply chain to provide an additional<br />

range of services,” Captain Kavina says.<br />

CHANNEL WIDENING<br />

By widening the channel, FPH argues<br />

South Australia will remain a competitive<br />

port for cruise ships and large container<br />

and bulk vessels.<br />

The project involves removing<br />

1.55m cubic meters of material from<br />

the shipping channel and placing it 30<br />

kilometres offshore. That volume is about<br />

half the amount of material removed<br />

from outer harbour in the 2005<br />

channel deepening project.<br />

“This is essential to safeguard the<br />

South Australian economy by providing<br />

importers and exporters access to<br />

world markets,” Captain Kavina says.<br />

“Without widening the channel, these<br />

larger vessels, which are becoming<br />

increasingly common, may omit South<br />

Australia from their calls,” he says.<br />

“This could result in increased costs<br />

for our South Australian businesses<br />

to export products by other means<br />

and locations, and also could result in<br />

increased prices for products that are<br />

imported.”<br />

Currently, Adelaide is the only capital<br />

city in Australia without a port able<br />

to accommodate such larger ships. In<br />

2014, the port saw 37 ships exceed the<br />

design width of the channel. In 2017,<br />

the number jumped to 312 as ships<br />

continue to increase in size.<br />

FPH has also been involved in recent<br />

years in discussions regarding a new<br />

deepwater port in South Australia,<br />

although it continues to be debated<br />

according to Captain Kavina.<br />

“Flinders Ports is continually discussing<br />

the needs of the market with all stakeholders,<br />

including government,” he says.<br />

“Flinders Ports still believes that Port<br />

Bonython is a logical location that suits<br />

the needs of the state, providing port<br />

access to all mines. This was the reason<br />

Port Bonython was originally selected<br />

as the preferred location.”<br />

Captain<br />

Carl Kavina<br />

Adelaide Container Terminal<br />

FACT; FPH<br />

44 October 2018<br />

thedcn.com.au


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EDUCATION & TRAINING<br />

Training<br />

Port Ash provides training on scale models<br />

of various types of vessels<br />

46 October 2018<br />

thedcn.com.au


for the tech age<br />

The pace of technological change is asking for new and improved skills for everyone<br />

in the industry, including engineers and pilots, writes Paula Wallace.<br />

The age of automation is now upon<br />

us, but there will be debate until the<br />

cows come home as to when, if ever,<br />

entirely autonomous ships will see<br />

widespread adoption.<br />

Nonetheless, it would seem reasonable<br />

to assume many maritime tasks currently<br />

performed by humans will be taken over<br />

by machines.<br />

At the forefront of this debate is lecturer<br />

and engineer Gamini Lokuketagoda, who<br />

is helping train engineers in the use of<br />

remotely operated ships.<br />

Mr Lokuketagoda is particularly interested<br />

in how theoretical studies can be better<br />

intermeshed with practice.<br />

“The practice in the past by trainers and<br />

students has separated theory from practice,”<br />

he said.<br />

“If you take the example of a diesel<br />

engine … if you have only learnt the<br />

practical part, then you are just a<br />

technician, but to become an engineer you<br />

should have problem solving skills and<br />

creative thinking that can only come from<br />

an understanding of the theory.<br />

“The simulator is the best tool that is in<br />

existence today to teach onshore operators<br />

of autonomous vessels because it combines<br />

theory with practice.”<br />

The simulator features virtual-reality<br />

screens for a life-like training experience<br />

on a range of diesel and electric propulsion<br />

engines.<br />

Mr Lokuketagoda stressed the human<br />

intervention or the presence of the remote<br />

operator could not be underestimated.<br />

“Irrespective of the degree of automation<br />

installed on the vessel, it is yet important to<br />

enable human intervention if all else fails,”<br />

he said.<br />

Mr Lokuketagoda said he believed the<br />

future role of the marine engineer would<br />

essentially be confined to a shore-based<br />

operating station, making decisions based<br />

on the telemetry from the machinery.<br />

“I had to do an apprenticeship and<br />

work on board ships to become a qualified<br />

marine engineer,” he said. “I did a<br />

four-year apprenticeship which included<br />

fitting, welding, machining, running and<br />

operating machinery. It’s not necessary<br />

anymore, as you’re not going to be doing<br />

… hands-on work onboard an autonomous<br />

ship, so we need people trained in colleges<br />

like AMC where they can get the right<br />

knowledge and experience mainly through<br />

engine simulators.”<br />

The IMO convention on STCW<br />

1978 effectively supports the hands-on<br />

criterion by prescribing various workshop<br />

competencies towards certification.<br />

Defence Image Gallery<br />

VIRTUAL ENGINE ROOM<br />

Regular DCN readers will know about<br />

the use of the engine-room simulator at<br />

AMC, an advanced piece of technology<br />

designed and manufactured by Kongsberg.<br />

It is typically used by students to<br />

prepare for routine and emergency<br />

engine room operations, troubleshooting,<br />

optimal operation, fuel economy and<br />

energy conservation.<br />

Gamini Lokuketagoda,<br />

lecturer, Australian Maritime College<br />

So much electronic stuff is terrific but when things are<br />

going pear shaped you need to rely on grassroots skills<br />

like those gained through manned models.<br />

thedcn.com.au October 2018 47


EDUCATION & TRAINING<br />

Subsequently, the STCW 1995<br />

convention further enhanced the workshop<br />

requirement.<br />

“However, the code does not adequately<br />

focus MET [Maritime Education and<br />

Training] institutions towards the required<br />

theoretical concepts essential to prepare<br />

engineers with the required knowledge and<br />

skills to deal with future trends and advanced<br />

technology,” Mr Lokuketagoda said.<br />

This led to a situation where many<br />

training and education institutions were<br />

not gearing up to face the transition to<br />

autonomous shipping.<br />

“We need to be training engineers for<br />

the jobs of the future and these jobs will be<br />

centred around autonomous technologies,”<br />

Mr Lokuketagoda said. “We’re anticipating<br />

that unmanned or remote-operated vessels<br />

will be the industry standard within the<br />

next 20 to 25 years.”<br />

THE ROLE OF SIMULATION<br />

Simulation as a training tool is also in<br />

evidence in New South Wales where the<br />

Australasian Marine Pilots Institute (AMPI)<br />

has teamed up with the Port Ash training<br />

facility near Newcastle to develop a program<br />

for those seeking to increase their skills and<br />

gain accreditation in the process.<br />

AMPI president Neil Farmer told DCN,<br />

“pilots are extremely well trained but<br />

we wanted to create a standard and an<br />

achievable benchmark in further training”.<br />

The AMPI web-based program includes<br />

focus areas such as manned models,<br />

Port Ash is the only manned model training facility in Australia<br />

simulator training, tug workshops and<br />

human factors.<br />

“There’s a whole range of components<br />

… manned models is one of the integral<br />

parts,” Mr Farmer said.<br />

Pilots that complete the CPD program<br />

can gain points and certification<br />

demonstrating their credentials to<br />

regulators and port authorities.<br />

A course was designed this year by Port<br />

Ash to meet the requirements of AMPI’s<br />

program. The manned ship-model facility<br />

specialises in the practical aspects of ship<br />

handling and the control of ships at low<br />

speeds in confined and shallow waters with<br />

and without tug assistance.<br />

“This gives trainees some grassroots<br />

ship handling experience without the<br />

distraction of electronics,” Mr Farmer said.<br />

“So much electronic stuff is terrific but<br />

when things are going pear shaped you<br />

need to rely on grassroots skills like those<br />

gained through manned models.<br />

“When people come into pilotage, many<br />

ship captains haven’t handled their ships<br />

or received those foundation skills,” Mr<br />

Farmer said. “The manned model brings<br />

them up to the level where they really<br />

see and feel the complex hydrodynamics<br />

involved.”<br />

Located 35 minutes north of Newcastle,<br />

Port Ash provides training in ship handling<br />

for masters, ship’s officers and pilots, using<br />

experienced pilots as instructors.<br />

“I think it’s terrific, it’s a first class<br />

facility,” Mr Farmer said, referring to Port<br />

Ash. “It’s the only facility of its kind in<br />

Australia. The models are to scale and the<br />

remote control tugs are some of the best<br />

I’ve seen anywhere.”<br />

Mr Farmer said the benefit of diversified<br />

forms of training was they could address<br />

several learning styles.<br />

“The simulators play a specific role …<br />

where people can sit in a boat and see what<br />

is happening all around them without<br />

distractions,” he said.<br />

Port Ash managing director of Port Ash<br />

Captain Cliff Beazley said it was gratifying<br />

to see that state regulator Maritime<br />

Safety Queensland had approved AMPI’s<br />

continuous development program.<br />

“It’s a start for introducing some form<br />

of commonality in Australia,” Captain<br />

Beazley said.<br />

“Our general manager, Captain Andrew<br />

Beazley, has spent much of this year<br />

developing and delivering a three-day<br />

program tailored to each port.”<br />

Its emphasis is to select likely points of<br />

incident in each port and blend them into<br />

general principles that manned models<br />

The simulator is the best tool that is in existence today<br />

to teach onshore operators of autonomous vessels<br />

because it combines theory with practice.<br />

show uniquely. A course is then delivered<br />

using the relevant ship-models and tugmodels<br />

over two or three days depending<br />

on the complexity of the port.<br />

“There is much failing of main engines,<br />

wrong-way wheels, the occasional accidental<br />

dropping of anchors, breaking of tug lines –<br />

all at inconvenient and unexpected times of<br />

course,” Captain Cliff Beazley said.<br />

“The aim is to practice the unexpected,<br />

mitigating the consequences while<br />

preferably avoiding damage altogether. It<br />

really is relevant training at the pointy<br />

end,” he said.<br />

“As the models work in accelerated time,<br />

a tremendous amount of ground and<br />

scenarios can be covered in the three days.”<br />

Port Ash<br />

48 October 2018<br />

thedcn.com.au


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EDUCATION & TRAINING<br />

Meeting naval shipbuilding capacity needs<br />

A sustainable sovereign workforce is a key enabler to deliver the<br />

Commonwealth’s naval shipbuilding program<br />

The federal government is working<br />

with several industry partners to develop<br />

naval shipbuilding endorsed programs<br />

to deliver a skilled and capable<br />

workforce to meet industry’s needs.<br />

The Commonwealth has announced<br />

a nationwide shipbuilding enterprise<br />

that includes the investment of $90bn<br />

over the next 30 years, of which $54m is<br />

to go to the Naval Shipbuilding College.<br />

Its aim is to ensure a co-ordinated,<br />

national approach to workforce<br />

development and skilling across the<br />

naval shipbuilding enterprise.<br />

“A sustainable sovereign workforce<br />

is a key enabler to deliver the<br />

Commonwealth’s continuous Naval<br />

Shipbuilding Program,” program<br />

director Bill Docalovich said.<br />

He told DCN the college is working<br />

with the Defence Industry Education<br />

and Skilling Consortium, the Australian<br />

Maritime College, as well as VET industry<br />

and the education and training sector.<br />

While the college is based at<br />

Osborne, South Australia, it has a<br />

nationwide hub and spoke model<br />

working with ship and submarine<br />

designers, shipbuilders and suppliers<br />

across the country.<br />

“Later this year the college will open<br />

a Western Australian satellite office in<br />

or near the Henderson shipbuilding<br />

precinct near Fremantle,” Mr Docalovich<br />

said.<br />

With the recent announcements<br />

about building 12 offshore patrol<br />

vessels, nine future frigates and<br />

12 future submarines, there is a<br />

requirement to deliver 5000 direct<br />

shipbuilding jobs and another 10,000<br />

jobs in supporting industries.<br />

“The Commonwealth’s commitment<br />

to a continuous ship and submarine<br />

program means that shipbuilding will<br />

become one of the careers of choice<br />

for the Australian workforce,” Mr<br />

Docalovich said. “Thousands of South<br />

Australians will have the opportunity<br />

for long-term careers working with<br />

cutting edge technology to support<br />

Australia’s national security.”<br />

A key role of the college is to work with<br />

industry to determine the appropriate<br />

training required to meet the rigors and<br />

demands of naval shipbuilding in their<br />

specific areas of expertise: trades, semiprofessional<br />

or professional.<br />

The college, through its national<br />

network of education and training<br />

providers, will assist in ensuring sufficient<br />

capacity is available within the training<br />

and education systems to meet the<br />

future specialised workforce skilling<br />

requirements.<br />

“This will be achieved by working<br />

across industries to identify personnel<br />

numbers by trades and professions and<br />

analysing this data against throughput<br />

capacity of training and education<br />

providers,” Mr Docalovich said.<br />

The college has developed a workforce<br />

register to manage the talent pool of<br />

interested candidates enabling the<br />

growth of a sovereign workforce for the<br />

Naval Shipbuilding Enterprise. It links<br />

potential candidates to employment<br />

or training opportunities in naval<br />

shipbuilding, supply-chain or associated<br />

industries.<br />

“Our candidate-managers<br />

work with these interested<br />

individuals to fully understand<br />

their background, skills, past<br />

training and education to<br />

discuss and support their<br />

desired career path and<br />

potential role type,” Mr<br />

Docalovich said.<br />

“These individuals<br />

are then matched<br />

with training and/<br />

or open positions<br />

in the naval<br />

shipbuilding<br />

enterprise.”<br />

The college has received expressions<br />

of interest in shipbuilding careers<br />

from more than 250 people to date.<br />

It is continuing to establish working<br />

relationships with the ship and<br />

submarine-building firms, including<br />

Naval Group, Lürssen, CIVMEC, BAE<br />

Systems and ASC.<br />

AMC is a foundation preferred<br />

education provider within the college<br />

network, owing to its role as a national<br />

specialist maritime education and<br />

training institute, especially as the<br />

major provider of maritime engineer,<br />

naval architect and maritime logistics<br />

graduates.<br />

“AMC graduates are widely employed<br />

in shipbuilding industries, domestically<br />

and internationally, and are highly<br />

sought after,” Mr Docalovich said.<br />

Naval Shipbuilding College has a<br />

commitment to encouraging diversity in<br />

candidates with a strong focus towards<br />

attracting women, Aboriginal or Torres<br />

Strait Islander people and those from<br />

culturally or linguistically diverse<br />

backgrounds.<br />

“We’ll also look at developing workers<br />

in any stage of career development<br />

whether they’re a school-leaver,<br />

transitioning from another industry,<br />

former shipbuilding employee, or<br />

unskilled/seeking new opportunities,”<br />

Mr Docalovich said.<br />

The Naval Shipbuilding College<br />

recently marked its first official<br />

endorsed program in welding in<br />

partnership with TAFE SA.<br />

“This is not only a tremendous<br />

milestone for both educational<br />

institutions, but it’s a critical<br />

development to the success<br />

of the continuous naval<br />

shipbuilding program in<br />

Australia,” Mr Docalovich<br />

said.<br />

Building new defence vessels in<br />

Australia is increasing demand for skilled workers<br />

Defence Image Gallery<br />

50 October 2018<br />

thedcn.com.au


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MARITIME ENGINEERING & SALVAGE<br />

The case of the<br />

Kea Trader<br />

DCN’s David Sexton spoke with Roger King, who<br />

is involved in the complex salvage operation off<br />

the coast of New Caledonia<br />

In July last year, the container ship Kea<br />

Trader grounded on Durand Reef, New<br />

Caledonia. Daily Cargo News editor<br />

David Sexton sat down with Roger King,<br />

master mariner and director of TMC<br />

Marine, Australasia, about the case. TMC is<br />

a London-based, international marine<br />

consultancy which also worked for four<br />

years on the Rena wreck in New Zealand.<br />

What were some challenges?<br />

The main challenge that we encountered<br />

in the Kea Trader salvage, which has<br />

progressed to wreck removal, has been the<br />

wreck site and its location in the South<br />

Pacific. The Durand reef is a shallow, flat<br />

topped, hard rock reef 40 nautical miles<br />

south east from the nearest land, Mare<br />

Island and 130 nautical miles from the<br />

nearest port, Noumea. Salvage operations<br />

have been hampered by a swell that<br />

often breaks across the whole reef and<br />

unrelenting winter trade winds supplanted<br />

in summer by passing cyclones. This<br />

pounding on the Kea Trader has resulted<br />

in hull failure and ongoing degradation.<br />

The isolated location means personnel,<br />

equipment and specialist vessels have to<br />

be brought in from Singapore, China or<br />

Australia. Safety is the primary concern<br />

followed by environmental protection and<br />

mitigation of effects caused by the wreck.<br />

Initially, oil was removed (1009 cubic<br />

metres of heavy fuel oils, diesel and other<br />

lube oils) and then 697 containers were<br />

salvaged from the vessel.<br />

What have been some of the big lessons?<br />

TMC Marine was appointed as special<br />

casualty representatives (SCR) by Lomar<br />

Shipping given its technical knowledge and<br />

experience in major casualty management,<br />

including the Rena. Much of the Renaobtained<br />

experience has been equally<br />

applicable in this jurisdiction. From the<br />

outset, a project control group (owners,<br />

insurers and TMC) set out to work<br />

52 October 2018<br />

thedcn.com.au


Kea Trader with SSC vessel HUA AO on the Durand Reef, July 2018<br />

Kea Trader, September 2018 March 2018<br />

TMC<br />

alongside the authorities and to ensure that<br />

at every step of the way, the works program<br />

was understood, approved and accurately<br />

reported. Good communication has helped<br />

build co-operation with the authorities<br />

and those affected locally. This has helped<br />

to deliver timely and effective decisionmaking,<br />

a co-ordinated approach and the<br />

approval to get on with work at sea and<br />

on land. From the outset we took the joint<br />

decision with the owners and insurers to<br />

engage the best expertise to help resolve<br />

this problem.<br />

Initially, Ardent was appointed as<br />

salvors under a LOF contract and then, as<br />

the challenge turned to a complex wreck<br />

removal, Shanghai Salvage Company took<br />

over after an exhaustive tender process.<br />

From the authorities side of the project, the<br />

benefits of having responsible ship owners<br />

insured with the International Group<br />

plying your waters make all the difference<br />

when there is a major incident and in<br />

dealing with its aftermath.<br />

What were some of the unique<br />

characteristics of this case?<br />

The remote location combined with the<br />

surprisingly poor weather and often<br />

difficult sea conditions combined to<br />

add a unique complexity to this project.<br />

The exposed location has also had a<br />

major impact on the vessel, given she<br />

was grounded in an elevated position<br />

on an exposed rock in the middle of a<br />

vast ocean. Initially, the Kea Trader’s hull<br />

failed, fracturing her into two halves<br />

and thus eliminating any expectation of<br />

salvage. The mid-section of the vessel has<br />

degraded further and now lies as a debris<br />

field between the forward and aft sections.<br />

Marine operations on both major sections<br />

are further complicated by the shallowness,<br />

the angle of list and the debris field. This<br />

has required the completion of a new and<br />

very comprehensive bathymetric survey to<br />

ensure safe operations on site.<br />

Opportunities to board and undertake<br />

work have decreased as time has passed<br />

and the condition of the vessel has become<br />

more hazardous. When safe boarding has<br />

been possible, the SSC team has removed<br />

all accessible and potential flotsam, whilst<br />

monitoring for any pockets of pollutants.<br />

The vessel continues to be clear of both.<br />

Currently, an area of the reef adjacent<br />

to the wreck is being cleared of debris<br />

thedcn.com.au October 2018 53


MARITIME ENGINEERING & SALVAGE<br />

OFFSHORE PIPE HAUL MANAGED BY AAL<br />

Specialist shipping company<br />

AAL says it recently transferred<br />

subsea pipes and other equipment<br />

to the Greater Enfield Project, a<br />

development of subsea oil production<br />

and water injection wells 60<br />

kilometres north-west of Exmouth.<br />

The 90-day project was done on<br />

behalf of TechnipFMC, a subsea and<br />

offshore specialist.<br />

The cargo was loaded onto the<br />

AAL Nanjing in Kuantan, Malaysia and<br />

Tanjung Langsat, Malaysia.<br />

An accommodation block had<br />

already been installed on the ship<br />

in Singapore, able to host a group<br />

of specialist offshore marine<br />

construction workers, TechnipFMC’s<br />

own team and additional AAL<br />

superintendents and personnel – all of<br />

whom remained onboard throughout<br />

the entire operation.<br />

The operation took three<br />

months to plan and, according<br />

to AAL’s statement, “met the<br />

strictest standards of safety and<br />

environmental compliance”.<br />

It involved the AAL Nanjing<br />

operating offshore in the Exmouth<br />

Gulf for 71 days, transferring cargo<br />

ship-to-ship to two platform supply<br />

vessels and itself initially interacting<br />

with Technip’s pipe layer/installation<br />

vessel Global 1201 at the start of the<br />

offshore campaign.<br />

AAL chartering and operations<br />

director Namir Khanbabi described the<br />

project as “a major offshore operation<br />

and key scope in one of Australia’s<br />

most important offshore oil production<br />

projects”.<br />

“It was very challenging in terms of<br />

quality control and the environmental,<br />

health and safety compliance associated<br />

with operating offshore in the Exmouth<br />

gulf for so many days, transferring<br />

cargo s-t-s and accommodating not just<br />

our crew, but 12 extra passengers,” Mr<br />

Khanbabi said.<br />

“This included strict ballast and<br />

waste management regulations and the<br />

constant well-being of all the personnel<br />

onboard.”<br />

Mr Khanbabi said the sourcing and<br />

management of the offshore marine<br />

construction crew was key to their<br />

scope of work and testament to AAL’s<br />

expanded capabilities for taking on<br />

similar operations on a full project basis<br />

in the future.<br />

“The dedication of our land and seabased<br />

teams and flexibility of the AAL<br />

Nanjing herself – a perfect vessel for<br />

such a demanding job,” he said.<br />

Namir Khanbabi, chartering and operations<br />

director, AAL<br />

TechnipFMC project director<br />

Archie Walker said the company<br />

worked closely with AAL to develop<br />

the procedures for loading and the<br />

working of the vessel in Australian<br />

waters to the installation vessel the<br />

Global 1201.<br />

“The project was completed<br />

successfully without any recorded HSE<br />

incidents or schedule delays,”<br />

Mr Walker said.<br />

AAL Nanjing at Exmouth<br />

AAL, TMC<br />

54 October 2018<br />

thedcn.com.au


Kea Trader oil removal via<br />

lifting drums July 2017<br />

by divers using a variety of lifting aids,<br />

including airbags, before scrap steel is<br />

transferred ashore in New Caledonia for<br />

recycling. Around 180 hull pieces together<br />

amounting to more than 92 tonnes of<br />

steel have been recovered to date. On<br />

land in New Caledonia, TMC is providing<br />

expertise and technical support as project<br />

managers, distressed cargo specialists<br />

and community liaison and shoreline<br />

response co-ordinators. Offsite, TMC’s<br />

specialists in naval architecture, the marine<br />

environment, pollution safeguards and<br />

other expertise has been involved as needed.<br />

What work is still to be done?<br />

The remaining large task is the removal<br />

of the two hull parts and the structural<br />

debris field. Plans are well advanced,<br />

with the intention to mobilise new heavy<br />

resources with heavy lift capabilities – the<br />

design of which is subject to complex<br />

engineering studies and final approval<br />

by the authorities. It forms part of a<br />

revised methodology for removing the<br />

vessel, which has been required given its<br />

changing condition and is being designed<br />

to continue to provide safeguards to the<br />

local environment. In the interim, SSC will<br />

continue to monitor the wreck and ensure<br />

the reef environment remains protected.<br />

SSC will also continue to remove further<br />

smaller-sized debris from the reef, as and<br />

when sea conditions make this possible.<br />

How is technology changing the way<br />

salvage is conducted?<br />

The salvage industry has been seeing<br />

increasingly complex and expensive wreck<br />

removals. This is due to larger vessels;<br />

isolated, environmentally sensitive or<br />

difficult wreck sites; politically complex<br />

locations; and increasing public and<br />

cultural awareness that ensure the<br />

authorities demand full or substantial<br />

wreck removal. The Kea Trader encapsulates<br />

the hardest of all these elements. To<br />

meet these demands, salvage and<br />

marine consultancy experts both have<br />

to constantly adapt and innovate. While<br />

primary salvage objectives such as the<br />

protection of the environment from oil<br />

or cargo pollution are constant, others<br />

such as the removal of wrecks from<br />

difficult locations are not. The variability<br />

between wrecks dictates that any operating<br />

Kea Trader containers removed<br />

onto Hibiscus barge August 2017<br />

platform must be adaptable to the specific<br />

challenges of a project like this. The<br />

Kea Trader project was always going to<br />

present a very tough challenge, one that<br />

would require innovative thinking and<br />

considerable investment.<br />

TMC Marine - providing expert advice and support<br />

internationally to the marine industry since 1979<br />

WRECK REMOVAL<br />

SALVAGE<br />

TECHNICAL ANALYSIS<br />

CLAIMS AND ACCIDENT<br />

INVESTIGATION<br />

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thedcn.com.au October 2018 55


INDUSTRY ANALYTICS<br />

Aussie ag exports buffeted<br />

by weather and trade<br />

Farm exports may suffer because of trade tensions Ian Ackerman reports<br />

AUSTRALIAN AGRICULTURAL<br />

production and exports are expected to<br />

decline slightly over this financial year, on<br />

the back of drought, and trade tensions<br />

are casting a shadow over future export<br />

figures, according to a recent report from<br />

the Australian Bureau of Agricultural and<br />

Resource Economics.<br />

The report, Agricultural commodities<br />

forecasts and outlook for September quarter<br />

2018 (authored by Matthew Howden and<br />

Kirk Zammit), shows that total Australian<br />

agricultural commodity production is set to<br />

total $60bn for the current financial year,<br />

which is 3% less than the previous year, but<br />

above the 10-year average of $56bn.<br />

The authors of the report point to a<br />

decline in area planted in the eastern states<br />

and the effect of drought conditions in late<br />

autumn and early winter as a driver of this<br />

decrease.<br />

ABARES predicts that 2018-19<br />

production of livestock and livestock<br />

products will increase. Droughts can result<br />

in more meat processing and more live<br />

exports as livestock farmers shrink the size<br />

of their herds.<br />

Earnings from exports of agricultural<br />

commodities are expected to decrease by<br />

5% to $47bn. Lower exportable supplies of<br />

canola, coarse grains, pulses and wheat are<br />

the expected drivers of this decrease. The<br />

report again points to the recent drought<br />

conditions as an underlying cause of this,<br />

as well as an increase in the use of these<br />

exportable grains as feed for livestock.<br />

VALUE OF AUSTRALIA’S AGRICULTURAL EXPORTS<br />

Livestock Crops<br />

50<br />

40<br />

30<br />

20<br />

10<br />

0<br />

A$bn 2013-14 2014-15 2015-16 2016-17* 2017-18* 2018-19**<br />

CHINESE IMPORT TARIFFS, AUSTRALIA AND THE US, AUGUST 2018<br />

COMMODITY AUSTRALIA (%) US (%)<br />

UNDER CHAFTA<br />

Beef 7.2–15 37–50<br />

Dairy 12-3 33–40<br />

Fresh or dried fruit 2.4–9 47–70<br />

Pork and pork products 2–4.8 63–70<br />

Tree nuts 1.4–2.6 45–65<br />

Vegetables and legumes 2.8–13 25–38<br />

Wine 2.8–13 29–35<br />

NOT INCLUDED IN CHAFTA<br />

Cotton 1 26<br />

Durum wheat 1 26<br />

Grain sorghum 0 27<br />

Soybeans 3 28<br />

Alf Manciagli<br />

56 October 2018<br />

thedcn.com.au


While ABARES predicts an increase in<br />

meat exports, total exports of livestock and<br />

livestock products is expected to remain<br />

flat, due to a decrease in exports of live<br />

sheep, skim milk powder and wool.<br />

The burgeoning trade disputes between<br />

the US and China could be problematic for<br />

Australian agricultural exports, with the<br />

Chinese government having imposed tariffs<br />

on the majority of agricultural imports<br />

from the States. With ChAFTA in place,<br />

and Australia able to export many of the<br />

same products to China, this dispute gives<br />

Australian exporters an advantage, the<br />

report points out.<br />

Burgeoning trade<br />

disputes between the<br />

US and China could<br />

be problematic for<br />

Australian agricultural<br />

exports.<br />

However, US exports will find their way<br />

to other markets, and new subsidies in the<br />

US may have an effect on competitiveness<br />

vis-à-vis Australian exports.<br />

Additionally, the report points out that<br />

the trade dispute puts economic growth in<br />

Asia at risk, thereby negatively impacting<br />

economic growth and thereby future<br />

demand for Australian agricultural produce.<br />

With 66% of total agricultural exports<br />

going to Asia in 2017-18, the continent is<br />

Australia’s largest market.<br />

LIVE SHEEP EXPORTS<br />

2000<br />

1500<br />

1000<br />

500<br />

0<br />

‘000 sheep 2016-17 2017-18* 2018-19**<br />

WHEAT EXPORTS<br />

25,000<br />

20,000<br />

15,000<br />

10,000<br />

5000<br />

0<br />

Kilotonnes 2016-17 2017-18* 2018-19**<br />

SUGAR EXPORTS<br />

5000<br />

4000<br />

3000<br />

2000<br />

1000<br />

0<br />

Kilotonnes 2016-17 2017-18* 2018-19**<br />

BEEF AND VEAL EXPORTS<br />

1200<br />

1000<br />

800<br />

600<br />

400<br />

200<br />

0<br />

Kilotonnes 2016-17 2016-17* 2016-17**<br />

* ABARES estimate ** ABARES forecast<br />

THE FALL OF TARIFFS<br />

UNDER CHAFTA<br />

As China is the biggest destination<br />

for Australian agricultural produce,<br />

the China-Australia Free Trade<br />

Agreement is an important pact for<br />

Aussie producers and exporters<br />

of farm products. According to<br />

statistics from the Department<br />

of Foreign Affairs and Trade, the<br />

Chinese market was worth about<br />

$13.5bn in 2017 for Australian<br />

agriculture, forestry and fisheries<br />

exporters – an increase of 105% over<br />

2011 numbers.<br />

Since ChAFTA came into force in<br />

December 2015 tariffs on several<br />

agricultural commodities have<br />

fallen, with many more scheduled to<br />

decrease or be eliminated next year<br />

and beyond.<br />

Tariffs on Australian beef in the<br />

Chinese market (which are currently<br />

set between 12% and 25%) are set<br />

to be eliminated by the beginning of<br />

2024, and a 12% tariff on beef offal<br />

is due to be eliminated by 2022. In<br />

2017, Australia exported 116,603<br />

tonnes of beef to China, worth<br />

$832.5m.<br />

Tariffs on live exports to China<br />

(including all animals) are set to<br />

be eliminated by 1 January 2019,<br />

including a 10% tariff on live cattle.<br />

Tariffs on pork are also set to be<br />

eliminated by the beginning of next<br />

year, with tariffs on sheep and goat<br />

meat to be eliminated by 2023.<br />

Wine is another Australian<br />

agricultural commodity set to receive<br />

tariff-free entry to China starting<br />

next year. Tariffs of up to 20% are set<br />

to be eliminated by 1 January 2019,<br />

giving Australian wine exporters<br />

better access to the Chinese wine<br />

market, which doubled in size since<br />

2010, according to DFAT.<br />

Horticultural products are also set<br />

to see tariff reductions in January.<br />

Macadamia nuts will no longer have<br />

tariffs of 10 to 25% entering the<br />

Chinese market next year, and fresh<br />

vegetables and fruits (except for<br />

citrus) will enter China tariff free as<br />

well. Tariffs on citrus are set to be<br />

eliminated in 2023.<br />

Also on the chopping block for<br />

2019 are tariffs of up to 15% on<br />

seafood including abalone, rock<br />

lobster, salmon, trout, southern<br />

bluefin tuna, salmon, crabs, oysters,<br />

mussels and prawns.<br />

thedcn.com.au October 2018 57


MARITIME LAW<br />

HMB Endeavour replica, berthed<br />

at the Australian National<br />

Maritime Museum in Sydney<br />

Managing risk on Australia’s<br />

blue highway<br />

Maritime lawyer Ambrose Rajadurai examines some trends in terms<br />

of international management of shipping safety<br />

A COMPREHENSIVE REGIME EXISTS<br />

manage additional risk and complement<br />

managing this risk have been shaped by<br />

to manage the safety of shipping, including<br />

the resources already on board.<br />

historical considerations. Systems in place<br />

International Maritime Organisation<br />

Such sensitive waters include port waters<br />

in Australia are largely the product of<br />

conventions, national laws, classification<br />

and special sea areas such as the Great<br />

incremental change over the past hundred<br />

society regulations, flag-state control,<br />

Barrier Reef. The risks are not just those<br />

years or so, very much similar to the<br />

port-state control and private vetting<br />

relating to protection of the environment,<br />

Commonwealth Navigation Act 1912. Just<br />

compliance required by charterers and<br />

avoiding injury or damage to property.<br />

as that Act underwent a complete review<br />

terminal operators. This all ensures most<br />

A major accident in a critical waterway,<br />

and replacement recently, it is suggested<br />

vessels are operated safely for general<br />

resulting in closure of a port, could have<br />

that the management of safe and efficient<br />

trading on the high seas.<br />

devastating consequences for the broader<br />

transit of vessels through sensitive waters<br />

community and the economy, the cost of<br />

merits review from the ground up to ensure<br />

NAVIGATION IN SENSITIVE WATERS<br />

which would most likely not be recoverable<br />

that systems in place effectively address<br />

However, in sensitive waters, whether<br />

from those accountable. Imagine the<br />

contemporary expectations and standards,<br />

because of increased hazards to navigation<br />

Westgate Bridge being brought down and<br />

utilising all available modern resources in<br />

or because the consequences of an accident<br />

closing the port of Melbourne for weeks,<br />

an integrated and effective manner.<br />

present unacceptable risk, local authorities<br />

or a ship sinking in the entrance to Botany<br />

impose additional requirements to better<br />

Bay, blocking access to the port.<br />

TRADITION<br />

manage risk. These include additional<br />

August 2018 marked 250 years since Captain<br />

local rules, reporting requirements for<br />

RISK MANAGEMENT<br />

James Cook started the first of his three<br />

ships in the area, vessel traffic services<br />

and compulsory pilotage. These additional<br />

requirements are tailored specifically to<br />

The risk that needs to be managed here<br />

is one of low probability but of very<br />

high consequence. Attitudes towards<br />

voyages of discovery. On 26 August, 1768<br />

Cook set sail from Plymouth on HMB<br />

Endeavour. Cook’s voyages seeded what is<br />

Victor Wong<br />

58 October 2018<br />

thedcn.com.au


Image supplied<br />

commonly referred to as globalisation, and<br />

had a big influence on shaping this part of the<br />

world. The maritime industry has a long and<br />

romantic history compared with most other<br />

industries in the modern era. The industry<br />

is steeped in rich tradition, and practitioners<br />

and others in society delight in recalling the<br />

past. Many, like Tevye the milkman in the<br />

famous musical, still believe that without<br />

its many traditions, the maritime industry<br />

would be “as shaky as … a fiddler on the roof”<br />

and cling to models of risk management<br />

based on historical traditions, especially<br />

with regard to risk posed by and to shipping<br />

in port and sensitive coastal waters. It is<br />

posited that many maritime traditions no<br />

longer have practical relevance because of a<br />

paradigm shift in operational practices and<br />

societal expectations.<br />

DEVELOPMENTS IN THE PAST 50 YEARS<br />

Ships and the industry today are radically<br />

different from those barely 40 years ago,<br />

let alone from the days of Cook or the<br />

period narrated about in Homer’s Iliad and<br />

Odyssey. Containerisation, the increase in<br />

the size of ships, specialisation of ships in<br />

the bulk liquid trade and commensurate<br />

changes in port infrastructure, cargohandling<br />

systems and technological<br />

innovation across the board has<br />

transformed the industry radically.<br />

It is arguable that there has been more<br />

fundamental change in the maritime<br />

industry in the past 50 years than there<br />

was in the previous 500, a rate of change<br />

that continues to accelerate exponentially.<br />

An example is automated cargo-handling<br />

systems in container terminals. Today, the<br />

volume of cargo loaded or discharged in<br />

an hour by a handful of operators would<br />

exceed that handled by perhaps hundreds<br />

of dockers over 24 hours just a few decades<br />

ago. Practices considered world’s best only a<br />

few years ago would be considered criminal<br />

today. An example is in the tanker industry,<br />

where ballast water was loaded into cargo<br />

tanks after discharge of the cargo. When<br />

this was pumped out prior to loading,<br />

hundreds of tonnes of oil would also be<br />

simultaneously discharged into the sea.<br />

Similarly, cargo ships would, as a matter<br />

of course, throw all rubbish overboard<br />

and there was usually a stream of rubbish<br />

trailing in their wake when ships departed<br />

port. Today, discharge of just a few litres<br />

of pollutant into the environment would<br />

invite severe penalties.<br />

MARGINS FOR ERROR<br />

Large modern ships have a deadweight several<br />

thousand times that of the Endeavour, have<br />

physical dimensions many times hers, crews<br />

about a fifth in number of hers (in case of<br />

cargo ships) and carry a range of modern<br />

cargoes that, if released uncontrolled into<br />

the environment, would have unimaginably<br />

negative consequences. Passenger ships carry<br />

thousands of persons on board, posing wholly<br />

different risk scenarios.<br />

Conversely, technological advances<br />

have improved precision in, position<br />

fixing capability, charting of underwater<br />

topography, measurement and prediction of<br />

relevant external forces (wind, tide, current),<br />

measurement of speed, etc. The continuously<br />

improving ability to more accurately measure<br />

relevant parameters has resulted in permitted<br />

margins for error in managing the transit<br />

of vessels through sensitive waters, being<br />

progressively narrowed.<br />

The spotlight today is being turned on the regulators<br />

as much as on the perpetrators<br />

While the probability of marine accident<br />

may have been reduced, the consequences<br />

when an accident does occur have been<br />

much magnified. The challenge has<br />

changed dramatically.<br />

CHANGING EXPECTATIONS AND<br />

TOLERANCE<br />

On 28 November 1903, the tanker Petriana<br />

ran aground at Portsea, Victoria an hour<br />

after the pilot boarded. After attempts<br />

to free her failed, she was lightened by<br />

dumping her cargo of bulk oil into the sea.<br />

The spill was described as “a film of great<br />

beauty, radiating all the colours of the<br />

rainbow, spread from Sorrento Back Beach<br />

to Point Nepean”. The pilot had his license<br />

suspended for 12 months for carelessly<br />

causing the stranding.<br />

On 5 January 1975, the ANL bulk carrier<br />

Lake Illawarra collided with the Tasman<br />

Ambrose Rajadurai, principal, Ambrose<br />

Rajadurai and Associates in Melbourne<br />

Bridge in Hobart and brought down several<br />

sections. Four cars drove off the collapsing<br />

bridge into the water below killing five<br />

occupants. Seven crewmen on the ship also<br />

perished. The master was found to have<br />

not handled the carrier in “a proper and<br />

seaman like manner” and had his master’s<br />

certificate suspended for six months.<br />

TIMES HAVE CHANGED<br />

In the case of abuse of children and<br />

customers of banks brought into the<br />

light by recent royal commissions, the<br />

spotlight today is being turned on the<br />

regulators as much as on the perpetrators.<br />

Practices once swept under the carpet are<br />

no longer tolerated. Similarly, legislators<br />

are reacting to public and media outcry<br />

in the case of maritime casualties. Those<br />

directly responsible and others, higher<br />

up the management tree, vested with<br />

authority to manage safety, are being held<br />

accountable and being served with severe<br />

penalties. In some instances, political and<br />

judicial overreaction may have resulted<br />

in unjust sanctions being meted out and<br />

counterproductive legislative changes<br />

enacted.<br />

A following article in next month’s<br />

edition of this magazine will illustrate this<br />

trend with specific examples. It will discuss<br />

the implications for safety regulators,<br />

harbour masters, pilots, VTS operators,<br />

ship masters and all others who have a<br />

shared responsibility to manage safety<br />

on Australia’s blue highway and a duty<br />

to promote the safety of life at sea, safe<br />

navigation and to prevent pollution of the<br />

marine environment.<br />

thedcn.com.au October 2018 59


WORKPLACE RELATIONS<br />

Technology and HVNL<br />

Gina Capasso examines the legal impact of advancing technology<br />

use in transport and logistics<br />

THE EFFECT OF FATIGUE ON<br />

road safety is a critical issue for the<br />

transport industry, as well as the broader<br />

community. Self-monitoring and selfreporting<br />

in the industry have historically<br />

been ineffective ways of reducing serious<br />

or fatal fatigue-related road accidents.<br />

However, technology can be used as a tool<br />

with the capacity to reduce safety incidents<br />

in the transport industry.<br />

TWO EXAMPLES<br />

In two recent cases, the Fair Work<br />

Commission considered disputes arising<br />

under the applicable Enterprise Agreement<br />

(EA) and determined the employer in each<br />

case had the right under the EA to:<br />

• further implement anti-fatigue<br />

monitoring technology in trucks in<br />

the form of infrared driver fatigue/<br />

distraction monitoring system (guardian<br />

technology) and inward and outward<br />

facing camera monitoring systems (DVR<br />

Cameras) – Toll Transport Pty Ltd T/A<br />

Toll Shipping v Transport Workers Union<br />

of Australia [2018] FWC 3573 (20 June<br />

2018); and<br />

• install GPS tracking devices on<br />

technician employees mobile phones –<br />

Australian Municipal, Administrative,<br />

Clerical and Services Union v Canon<br />

Australia Pty Ltd T/A Canon [2018] FWC<br />

2695 (18 May 2018).<br />

ADVANCES BEYOND GPS TRACKING<br />

Recently one of the big four banks built<br />

a blockchain for its logistics clients to<br />

monitor a shipment of 17 tonnes of<br />

almonds from Victoria to Germany. In<br />

this experiment the almonds and their<br />

transportation path was monitored using<br />

sensors. This provided all parties in the<br />

global supply chain with full transparency<br />

of the location and condition of the<br />

almonds and assisted the parties in the<br />

supply chain to identify and deliver<br />

efficiencies in their business.<br />

Logistics has traditionally involved<br />

extensive paperwork but emerging<br />

technologies mean more efficient<br />

and transparent supply chains will<br />

become prevalent. Technology that<br />

records transactions and tracks product<br />

movements from supplier to customer is<br />

likely to provide efficiencies, visibility and<br />

interconnectivity between parties in the<br />

supply chain.<br />

Operators and others in the supply<br />

chain will need to adapt to technology<br />

advancements particularly where such<br />

advancements are implemented by<br />

competitors and demanded by customers to<br />

remain competitive.<br />

Can blockchain and other technology<br />

advancements assist duty holders with legal<br />

compliance obligations?<br />

HVNL AND COR LAWS<br />

The new chain of responsibility laws<br />

(which have just arrived) provide that<br />

parties who control or have influence over<br />

the transport task (employers of drivers,<br />

loaders, unloaders, packers, loading<br />

managers, operators of heavy vehicles,<br />

schedulers, consignors and consignees)<br />

Technology may play a part in assisting with legal<br />

compliance where it incorporates mechanisms for<br />

identifying safety issues in transport activities<br />

will be responsible for ensuring breaches<br />

of the Heavy Vehicle National Law do not<br />

occur. These laws prevent heavy-vehicle<br />

driver breaches of fatigue management<br />

requirements, speed limits, mass,<br />

dimension, and loading requirements.<br />

If there is an alleged breach of these<br />

laws, the actions of each party in the<br />

Gina Capasso, special counsel, KHQ<br />

supply chain may be called into question<br />

and they parties may become the subject<br />

of an investigation, with the potential<br />

for prosecution. This investigation would<br />

include looking at what measures those<br />

parties in the chain have in place to prevent<br />

breaches of the HVNL occurring.<br />

HOW TECH CAN HELP, LEGALLY<br />

Technology may play a part in assisting<br />

with legal compliance where it<br />

incorporates mechanisms for identifying<br />

safety issues in transport activities (such<br />

as delays which impact delivery times and<br />

may have speed or fatigue considerations)<br />

that can then be eliminated or controlled.<br />

However, parties that have legal<br />

responsibilities in the supply chain need<br />

to ensure that the implementation of<br />

any technology to assist with compliance<br />

actually achieves this outcome. It will not<br />

be sufficient for a party that exercises (or<br />

has the capability of exercising) control or<br />

influence over any transport task to satisfy<br />

its legal obligations by simply relying on<br />

technology that is stated to achieve this<br />

objective. The user of the technology must<br />

be satisfied that the technology provides<br />

reliable information that can be used in<br />

demonstrating legal compliance.<br />

KHQ<br />

60 October 2018<br />

thedcn.com.au


CURRENCIES, GEO-POLITICS & TRADE<br />

The global economy<br />

and its risks<br />

The US economy is powering up, but political instability and<br />

potential trade wars threaten the global recovery<br />

THE GLOBAL ECONOMY IS<br />

killed middle-class jobs in the US, while<br />

travelling well, led by the US, which is<br />

enriching global corporations. The political<br />

firing on all cylinders. The Federal Reserve<br />

fallout has been immense.<br />

System has been rapidly returning to a<br />

The North American Free-Trade<br />

normalised monetary policy, reflecting the<br />

Agreement between the US, Mexico and<br />

strong growth and inflationary pressures.<br />

Canada has been a major casualty. The<br />

Europe has also been improving, with<br />

Mexicans have seized the opportunity<br />

steadily improving economic numbers.<br />

and negotiated a bilateral agreement with<br />

The Australian economy has been<br />

the US, while Canada has been seemingly<br />

a beneficiary of the global economic<br />

left isolated.<br />

environment as a heavily trade-exposed<br />

The US remains the biggest economy<br />

nation. The macro risk to global markets<br />

in the world and the primary destination<br />

has been the realignment of global trade<br />

for exporters. Any nation wishing to trade<br />

and the emergence of so-called trade wars.<br />

with the US must now establish new trade<br />

President Trump has decided to<br />

agreements. The US has used tariffs as<br />

renegotiate the US trade agreements and<br />

leverage, and the pressure seems to be<br />

re-establish the US supply chain. China<br />

working. In July the EU avoided a trade war<br />

has had a major advantage and, despite<br />

being the second largest economy in the<br />

world, receives advantage as an emerging<br />

by agreeing to buy more American goods,<br />

but China is still holding out.<br />

Paul Bettany, foreign exchange partner,<br />

Collinson & Co<br />

trading nation, complements of the<br />

POLITICAL UPHEAVAL<br />

WTO. Trump has sought to address this<br />

The Australian dollar was resilient during<br />

surrounding emerging markets, attempting<br />

apparent inequity.<br />

the political crises that enveloped the<br />

to end extremely stimulative monetary<br />

government in recent months. Yet another<br />

policy and return to normal monetary<br />

TRADE WARS<br />

internal coup deposed a serving Australian<br />

conditions. The Bank of England and<br />

The Trump administration in mid-<br />

prime minister. Australia has undergone<br />

European Central Bank remain prone with<br />

September announced tariffs on<br />

political insecurity, with seven prime<br />

Brexit negotiations building to a crescendo.<br />

US$200bn worth of Chinese imports. The<br />

ministers in the past eleven years. This is<br />

US equities continue to hit record<br />

US has launched a realignment of trade<br />

evidence of the political tumult that has<br />

highs as confidence and investment surge,<br />

agreements. Trump has discarded multi-<br />

engulfed the world.<br />

providing the platform for further economic<br />

lateral free trade agreements which he<br />

The Australian economy is trade<br />

gains. Business investment translates into<br />

sees as inequitable. The US has seen the<br />

exposed and has thus suffered from<br />

growth in profitability and incomes, thus<br />

supply chain shift to lower-cost economies,<br />

instability generated by the Trump trade<br />

supporting the consumer society.<br />

bringing with it the loss of manufacturing<br />

wars. Australia is heavily dependent on<br />

It is hard to foresee any interruption<br />

and the associated high-paying jobs.<br />

providing Asian supply chains and thus<br />

in this bull-run, save black swan events.<br />

This was thought to be the irreversible<br />

impacted by the volatility surround the<br />

Growth and inflation will mean further<br />

consequence of globalisation.<br />

US-China trade negotiations. The Reserve<br />

upward pressure on interest rates driving<br />

As manufacturing was shipped offshore,<br />

Bank of Australia has warned of the high<br />

currencies. The US is way ahead in the<br />

the consumer was the beneficiary through<br />

levels of consumer debt, exasperated by<br />

monetary cycle, which should lead to a<br />

cheaper consumables. Primary export<br />

stagnant wage growth, which gets the<br />

strong dollar.<br />

nations supply the energy and resources,<br />

canary in the mine-shaft quieting down.<br />

The risks to the Australian dollar<br />

thus benefiting the trade exposed nations,<br />

The past month again has been<br />

remain the global trade situation<br />

such as Australia, Argentina, Brazil, etc.<br />

dominated over the impact of global trade<br />

and consumer debt. A solution in the<br />

Collinson & Co<br />

The low-cost labour nations were set up<br />

as the global factories, which has seen the<br />

supply chain shift to parts of Asia, Mexico<br />

etc. This reduced costs and prices, but also<br />

wars and speculation over central bank<br />

activity and rhetoric. Central banks have<br />

recognised the healthy state of global<br />

economies, with the obvious exceptions<br />

China-US trade negotiations could see a<br />

significant upward boost to the currency,<br />

while continued uncertainty, brings with<br />

it vulnerability.<br />

thedcn.com.au October 2018 61


MISSION TO SEAFARERS<br />

MtS staff assisting cruise ship workers<br />

Cruise season is almost upon us,<br />

and MtS is at OPT to help seafarers out<br />

Operation Cruise Terminal<br />

With cruise season starting this month, Mission to Seafarers Sydney<br />

is launching Operation Cruise Terminal, writes Wendy King of MtS<br />

SEAFARERS HAVE MANY AND<br />

varied needs because of their long<br />

contracts, which typically require them to<br />

work from six to 12 months at a stretch. Due<br />

to the quick turnaround of cruise vessels at<br />

Sydney’s Overseas Passenger Terminal (they<br />

arrive at about 6am and depart at around<br />

6pm), few of the crew have shore leave.<br />

For the minority who do venture ashore,<br />

they prioritise carefully how they spend<br />

that brief time. Operation Cruise Terminal<br />

at OPT focuses on their needs, and, in<br />

partnership with the Port Authority of NSW,<br />

we are setting up a gazebo or marquee at the<br />

crew exit gangway at the OPT.<br />

This facility will enable us to serve the<br />

seafarers, assisting and caring for them<br />

in whatever way possible and within our<br />

means. Our friendly MtS staff at the gazebo<br />

will be selling discounted, pre-paid SIM<br />

cards with good plans; distributing our<br />

newsletters, magazines and information<br />

sheets regarding the MtS; and directing<br />

them to our Mission Centre which is only a<br />

10-minute walk from OPT.<br />

AT THE MISSION<br />

At our Mission, we provide facilities such<br />

as free internet and Wi-Fi and seafarers<br />

can get connected with family and friends<br />

back home. Seafarers can also listen to<br />

news updates in their own language in our<br />

Apple TV lounge, while enjoying a free tea<br />

or coffee. They can also change foreign<br />

currencies to local currency and remit<br />

their wages to family members back home<br />

through our Western Union facility.<br />

Our shop is stocked with toiletries,<br />

groceries and health supplements such<br />

as Omega-3 fish oil, as well as popular<br />

snack foods. The shop also sells souvenirs<br />

such as soft toy kangaroos and koalas,<br />

fridge magnets, T-shirts and caps, as<br />

well as mobile phones and accessories.<br />

We also sell discounted tickets to places<br />

of interest. Alternatively, seafarers can<br />

just relax in our centre on Hickson Road,<br />

Millers Point, playing pool and table tennis.<br />

Reading materials such as novels, booklets,<br />

magazines and newspapers are available<br />

free of charge.<br />

SEAFARERS IN THE FESTIVE SEASON<br />

Due to their work commitments, many<br />

seafarers labour through the festive<br />

seasons, especially Christmas and New<br />

Year. During these seasons, many of them<br />

would like to order gifts online, but where<br />

can their order be delivered? We allow<br />

them to use our Mission’s address to deliver<br />

orders, which they pick up from us when<br />

they call in at our port. This is another way<br />

to meet the needs of the seafarers. We have<br />

had much positive feedback from them<br />

about this service.<br />

The friendly, competent staff and chaplains<br />

at the Mission are available seven days a<br />

week, 363 days a year, providing listening<br />

ears to seafarers needing to share private and<br />

confidential matters without being judged<br />

This facility will enable us to serve the seafarers,<br />

assisting and caring for them in whatever way<br />

possible and within our means<br />

or criticised. The Mission provides a home<br />

away from home for all seafarers. We provide<br />

pastoral and personal care as well as hospital<br />

visitation when needed.<br />

We want to express our heartfelt<br />

gratitude to Port Authority of NSW senior<br />

manager, cruise and terminal operations<br />

Robert Rybanic and his team for endorsing<br />

our Operation Cruise Terminal at OPT<br />

and for granting permission to set up the<br />

gazebo at the terminal to serve and assist<br />

the seafarers calling at our port. We look<br />

forward to partnering with other agencies<br />

to assist us to serve the seafarers with<br />

greater efficiency.<br />

Mission to Seafarers<br />

62 October 2018<br />

thedcn.com.au


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OUT & ABOUT<br />

Svitzer port manager Ben Hart and Tim Crakanthorp,<br />

state member for Newcastle<br />

A Newcastle<br />

welcome<br />

for Svitzer<br />

Glenrock<br />

Svitzer hosted a ceremony<br />

and celebration at the<br />

Port of Newcastle,<br />

christening its new tugboat<br />

THE SECURITY GUARD AT THE PORT<br />

entrance was looking forward with<br />

trepidation at the crowds of people she had<br />

to let through the boom gate. “I’ve got my<br />

work cut out for me tonight, darl.”<br />

The crowds were gathering at the Port<br />

of Newcastle’s Dyke Point to attend the<br />

naming ceremony for the new tugboat,<br />

Svitzer Glenrock.<br />

Guests were greeted with a string trio<br />

making its way through the standard light<br />

classical repertoire, with a smattering of<br />

Bach, Dvorák, Vivaldi and others.<br />

The Glenrock itself was open for guests to<br />

clamber around in and explore the innards<br />

of the Damen ASD 2312 tug. While guests<br />

were chatting and admiring the vessel, a<br />

few dolphins swam by and two other tugs<br />

spun around in circles.<br />

Ray Kelly Jr gave the Welcome to<br />

Country and spoke about his family’s<br />

connection to the area. He said he<br />

appreciated the tug’s name and the<br />

connection to the area it represented.<br />

Then, it was time for the main event. The<br />

“naming mother”, Emma Fensom (who is<br />

also the chief operating officer for the Port<br />

Authority of New South Wales) boarded the<br />

tug, donned safety glasses and smashed a<br />

bottle of champagne on the vessel.<br />

“Let it be known, that on this day,<br />

Thursday the 13th of September, and forever<br />

more, this fine vessel is named Svitzer<br />

Glenrock,” she said.<br />

“May God bless her and all who sail in<br />

her.”<br />

Then, Svitzer east coast general manager<br />

James Mather took the stage and said<br />

the vessel was named by the company’s<br />

Newcastle employees.<br />

“We gave the employees a chance to<br />

choose the tug’s name, and they chose<br />

Glenrock through a vote,” he said.<br />

“Glenrock is a well-used wilderness<br />

precinct just south of Newcastle city. It was<br />

made a State Recreation Area in the 1980s<br />

Ian Ackerman; Svitzer<br />

64 October 2018<br />

thedcn.com.au


Nuatali Nelmes,<br />

Lord Mayor of Newcastle<br />

Gordon Lasker, Teresa Lloyd and Andrew Cumming<br />

Tug master Gavin Herbert, Svitzer CEO<br />

Henriette H. Thygesen, and deckhand Shane Suska<br />

Tom Charter and Sjoerd de Bruin<br />

and is popular with families because of its<br />

beaches, bush, wildlife and famous lagoon.”<br />

Mr Mather also said Glenrock was a place<br />

of regular habitation for the Awabakal people.<br />

Next, Svitzer managing director Nicolaj<br />

Noes was up.<br />

“The Glenrock, she’s a special lady,” he<br />

said.<br />

“If you have a cape-size coming through<br />

the channel and it loses power, you want<br />

someone like the Glenrock there,” he said.<br />

Svitzer global CEO Henriette Thygesen<br />

spoke about the importance of a naming<br />

ceremony, which is known as a christening<br />

in Denmark.<br />

“A ship has a soul – this is not mere oldfashioned<br />

superstition, but it is commonly<br />

believed, even in modern times, that a ship<br />

is almost like a living being,” she said.<br />

“There are many parallels between<br />

naming ships and naming newborn babies.<br />

Ms Fensom said she was honoured<br />

to be the naming mother for the Svitzer<br />

Glenrock, and she explained that the new<br />

tug would be instrumental in allowing<br />

more, larger ships – particularly fuel<br />

tankers – to call at Port of Newcastle.<br />

Emma Fenson and Keith Wilks<br />

Aaron Henshaw, Tiffany Adams, Lauren Rogers and Mark Whipp<br />

thedcn.com.au October 2018 65


OPINION<br />

Australia needs<br />

to go nuclear<br />

Captain Harry Mansson argues for nuclear power as an energy source<br />

and the spillover for the maritime sector<br />

NUCLEAR POWER USE HAS BEEN<br />

discussed in Australia since the 1950s,<br />

with policy proposals made and rejected<br />

like a revolving door. Prime Minister John<br />

Howard banned it before re-opening it for<br />

discussion in 2007. But nothing came of it.<br />

It is, therefore, refreshing to see some<br />

stirring, most recently by the former<br />

head of Australia’s Nuclear Science and<br />

Technology Organisation, and current<br />

chair of NBN, Dr Ziggy Switkowski. Dr<br />

Switkowski was quoted in The Australian<br />

as stating: “it was sensible to clear the<br />

regulatory pathway for the next generation<br />

of small nuclear reactors”. Opposition<br />

energy spokesman Mark Butler has held out<br />

the prospect of Labor removing the obstacle<br />

if and when they win government.<br />

REDUCED EMISSIONS<br />

The advantages would be enormous.<br />

Australia is the world’s third-largest supplier<br />

of uranium and thorium, it provides for<br />

safe dumping of nuclear waste. The fuel<br />

costs compared with coal-powered plants<br />

would see reductions of up to 80% and there<br />

would be zero emissions. A reduction in coal<br />

emissions would have obvious benefits for<br />

public health as well as for the environment,<br />

if there was the government’s will and<br />

strength to back it up.<br />

Our country is about the only developed<br />

nation not using nuclear power. When<br />

I left my native Sweden in the 1960s for<br />

good to become a proud and loving Aussie,<br />

that country had six reactors working for<br />

it and that has been increased to seven at<br />

times. Never any problems. And, Australia<br />

already has a small nuclear facility at Lucas<br />

Heights, NSW for medical purposes.<br />

The areas that need such power in<br />

Australia change with the weather, floods<br />

and fires. Ideally the reactors would be<br />

movable. Which brings us, accepting Dr<br />

Switkowski’s views, to the concept of<br />

building new reactors each of about 100<br />

MW capacity, each able to supply energy<br />

for up to 100,000 people. These could be<br />

installed inside second-hand converted<br />

cargo ships to be towed to wherever needed<br />

and tied up near the existing power feed.<br />

NUCLEAR POWER IN SHIPPING<br />

Meanwhile, 15 countries have signed<br />

with Russia as users of non-self-propelled<br />

nuclear power supply ships. These include<br />

China, Indonesia, Malaysia, Algeria,<br />

Namibia, Cape Verde and Argentina. The<br />

New York Times reported that proponents<br />

argue such power stations could be<br />

“assembled more quickly, be put in a wider<br />

range of locations and respond more<br />

nimbly to fluctuating supply on power grids<br />

that increasingly rely on wind and solar”.<br />

The general use of nuclear propelled<br />

vessels also has been around for some time.<br />

The US built the cargo ship Savannah in<br />

the 1950s (it was a pet project of President<br />

Eisenhower) and could circle the globe 14<br />

times at 20 knots without refuelling its 20<br />

kilograms of uranium. A similar 14,000 kW<br />

of installed power would cost up to $50m<br />

for bunker fuel alone.<br />

Our country is about the only developed nation<br />

not using nuclear power<br />

The seaborne nuclear supply concept<br />

is not new; the Russians have several<br />

non-self-propelled ships operating already<br />

and more on mass production order.<br />

The supplier is the Baltic shipyard in St<br />

Petersburg. Each vessel can produce up to<br />

70 MW of electricity (300 MW of heat),<br />

enough for a city of 200,000. They can be<br />

towed almost anywhere around Russia.<br />

Refuelling of 20 kilograms of uranium<br />

is required every three years. The reactors<br />

Captain Harry Mansson, former shipping<br />

executive, sea captain and sailor<br />

have a life span of about 40 years, and<br />

service is only required every 12 years. And,<br />

nuclear propulsion is also nothing new to<br />

Russia, where nuclear icebreakers have been<br />

operated for 50 years, as well as a large<br />

number of Navy and tourist ships.<br />

NEED FOR LEADERSHIP<br />

What next? Nothing will happen without a<br />

Federal Government initiative. So it should<br />

set up a qualified working group consisting<br />

of industry leaders, including health and<br />

environment, and a minimum of politicians,<br />

coming up with the results of a study<br />

showing the proposed geographical target<br />

areas, required capacity of a typical nuclear<br />

energy supply ship, cost/benefits, inclusion of<br />

desalination needs, etc. Then come up with<br />

design ideas to suit the particular ships.<br />

The group would then come up with designs<br />

for the ships, and then call for global tenders,<br />

which should be independently assessed.<br />

The target deadline for the completion<br />

of this work should be six months, because<br />

this issue is far too important to leave it to<br />

languish on the back burner.<br />

Image supplied<br />

66 October 2018<br />

thedcn.com.au


The grill<br />

began on this dirty little garbage barge on<br />

Pittwater due to a lack of education.<br />

When I look back on it now, that was<br />

the best job I ever had. It was absolutely<br />

amazing and, as a young bloke, I thought<br />

I was the captain of the biggest ship in the<br />

world. At the end of the day, it was just a<br />

7-metre garbage barge.<br />

What is your favourite thing to eat?<br />

I’m a bit of a lefty when it comes to food<br />

and have a pretty heavily plant-based vegan<br />

diet these days – it’s probably a bit more<br />

sustainable as well.<br />

Favourite thing to eat would probably be<br />

– well, I’m lucky enough to have a fiancée<br />

who really knows how to cook, so anything<br />

she puts on my plate is great.<br />

Ian Ackerman<br />

Cameron Butchart, port officer at the Port Authority<br />

of New South Wales, talks garbage barges, cycling<br />

and a healthy diet<br />

What does a typical day at work look<br />

like for you?<br />

My current role at the Port Authority<br />

entails developing better work practices and<br />

procedures for our operational staff and<br />

our customers. Some of our customers are<br />

cruise ships, tankers and container vessels.<br />

I’m just trying to accommodate their needs<br />

so we can progress as world-class port and<br />

not hinder their port stays.<br />

What is the best part of working at the<br />

Port Authority?<br />

The best part of working at the Port<br />

Authority is that no two days are the same,<br />

we have so many different customers.<br />

One day I could be chatting with cruise<br />

ship captains, and the next day I could be<br />

helping assist a tanker with discharge or<br />

loading. There’s no day that’s the same.<br />

After spending a life at sea, I still get to be<br />

present on board ships but I don’t have to<br />

actually go away to sea.<br />

What did you do before you took up<br />

your current role?<br />

I had spent my entire life at sea. I<br />

completed a cadetship with Shell<br />

Tankers when I was younger, and I slowly<br />

progressed my way through the different<br />

deck officer ranks at sea.<br />

Later, I moved across to the Australian<br />

offshore oil and gas industry, working<br />

primarily on anchor handlers and support<br />

vessels.<br />

What was you first-ever job?<br />

The first job I got was a garbage man on a<br />

garbage barge on Pittwater. I always wanted<br />

to work at sea, but I had no qualifications –<br />

I hadn’t finished school. So, skippering this<br />

garbage barge around Pittwater collecting<br />

rubbish was the only job I could do without<br />

a qualification. I quickly realised I could<br />

clock up sea time on the garbage barge. One<br />

thing led to another and I accrued enough<br />

sea time to obtain a cadetship with Shell.<br />

I went from a small garbage barge to some<br />

of the biggest tankers in the world. It all<br />

What does an ideal holiday look like?<br />

It would be anywhere as far away as<br />

possible from the hustle and bustle of<br />

city life. I used to love getting away to sea<br />

because I could get away from the city. But<br />

now an ideal holiday would probably be<br />

on a nice, quiet island, somewhere in the<br />

tropics, or South East Asia. Somewhere with<br />

no technology, no devices.<br />

Got any hobbies?<br />

Cycling. Most mornings I’m out well before<br />

the sun comes up riding somewhere around<br />

Sydney. I’m an avid cyclist. I recently<br />

qualified for the World Fondo Series in<br />

Italy, I’m hoping to try and get there this<br />

year. I’m also getting married around the<br />

same time as the series, so I’m not too sure<br />

that the wife will let me travel.<br />

Are there any social issues you feel<br />

strongly about?<br />

Live export – I like to eat an ethical diet;<br />

I think more could be done with the live<br />

export trade. Is it a barbaric trade, and we<br />

could develop more humane ways to ship<br />

these animals overseas.<br />

I went from a small garbage barge to some of<br />

the biggest tankers in the world. It all began on<br />

this dirty little garbage barge on Pittwater due<br />

to a lack of education.<br />

thedcn.com.au October 2018 67


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