News / Row erupts over Australia's plan to create 'strategic' shipping fleet

Photo 78489463 | Australia Naval Flag © Simon Whitaker | Dreamstime.com

The Australian government has backed a series of proposals from a taskforce set up in 2022 to examine developing a national strategic shipping fleet reserve.

The Independent Taskforce on the Strategic Fleet published its report last week, which recommends creating a fleet of 12 vessels – domestically owned, registered and crewed – to “help Australia build resilience to freight disruptions, while supporting our maritime workforce and sovereign capability”.

The composition of the fleet’s vessel types has yet to be decided, although it is likely to be a mix of container, ro-ro, dry and wet bulk carriers; as has a variety of ways to fund the fleet’s development, including changes to its taxation regime and introduction of a levy on all vessel arrivals at Australian ports.

“The creation of a strategic fleet will build Australia’s resilience and protect our national security and economic sovereignty by enabling the movement of cargo in a time of crisis,” said federal minister for infrastructure, transport, regional development and local government Catherine King.

However, the report, and the government support for it, drew ferocious criticism from liner lobby group Shipping Australia, which dubbed it the “Strategic Failure Fleet”, and pointed to previous federal and state government efforts to bolster Australian maritime capacity, which it said had persistently failed.

“The current federal labour government is just recycling policies we know have failed in the past,” said Shipping Australia. “It has failed so often that we can give an appropriate label to this recycled policy – it’s the Strategic Failure Fleet.

“It failed in the past, as it will fail in the future, because its premises are so utterly flawed,” it added.

It also claimed that the composition of the taskforce itself had left many in the industry struggling to understand how it had arrived at its conclusions.

“This policy-making process has ignored ample historical evidence, analysis from the independent economic analysts and industry input. We can only conclude that it clearly had a pre-determined outcome – to manufacture a justification for a strategic failure fleet.

“There was little transparency (the work of the taskforce has been shrouded in secrecy, and there was no open and transparent selection process to its membership). There was incomplete consultation, as the report of the taskforce was not released to the public until earlier this week.

“On the very same day  the report was released, the government had already agreed to many of its recommendations. No one got a chance to review or comment upon, the work of the taskforce before the government accepted its recommendations. That’s a predetermined outcome and it’s bad process in policy-making,” Shipping Australia said.

However, sea freight buyers said that following the report’s publication, their representatives had been called to provide feedback.

Freight & Trade Alliance director and co-founder Paul Zalai told The Loadstar: “We have been invited to engage with the strategic fleet project team to discuss their final report, and look forward to understanding the detail of proposals and considering all viable options to achieve the desired goals,”

“We see merit in the intent of establishing a Strategic Fleet at a time of increased geopolitical tensions and natural disasters.

“We clearly need contingencies to address all scenarios to service to ensure continuity of the movement of goods internationally and across our broad continent. While we have traditionally been well-serviced by foreign-owned shipping lines, can we rely on them prioritising Australia’s needs in times of crisis?

“At the same time, we cannot sign a blank cheque to achieve these outcomes, and are mindful that any additional levies on trade will further inflate costs through the supply chain, impacting the viability of our export produce and [adding] fuel inflationary pressures across our economy,” he added.