Productivity Commission Australia’s Maritime Logistics System

Recent events – namely the COVID-19 pandemic, the Suez canal blockage in 2021 and the Jan 2022 flood in South Australia rendering the east/west rail connection inoperable – have exposed several vulnerabilities in Australia’s logistics system. A system that is already subject to market pressures and external factors beyond the control of Australian businesses and governments.

Australia’s national merchant shipping capability has reached the point where:

  • there is no vessel we can requestion to deliver liquid fuel or chemicals (for say, water treatment);
  • very, very few suitable for the carriage of other essential products such as fertiliser or medical supplies; and
  • the supply of skilled mariners this nation has relied upon has been so eroded that it will take decades to rebuild.

Australia is utterly exposed and reliant on foreign ships under foreign government or corporation control to service our trading needs and without adequate ship numbers the nation will struggle – indeed may absolutely fail – to develop the right talent to feed our ongoing need for strategic maritime skills in the future.

Our lack of national shipping capability, the increasingly contested waterways we rely on, the shifting international norms that govern shipping, a changing geopolitical landscape, the lack of capacity to develop our skilled mariners ensuring safety and our ever-growing reliance on imports leaves us with very scant control over our maritime operations.

The issues of maritime domain resilience are falling between the cracks within government policies.

The two key steps that need to be taken to provide Australia with an appropriate level of maritime domain resilience are:

  • First and foremost, Australia needs to create a level playing field with other nations to allow competitive ship ownership and operation to happen from Australia. With the right fiscal and regulatory structures in place, growth in the commercial Australian ship ownership sector will happen organically and naturally.
  • To expedite provision of a base level of capability in key supply chains and the employment and training platforms needed to meet Australia’s strategic maritime skills requirement, a dedicated number of vessels ought to be identified for further support from the Government.

As Australia transitions into areas of new economic activity other opportunities will present themselves. For example, the hydrogen export market will demand that the hydrogen cargo is carried to market on ships powered by clean energy. Such investment in the ships themselves, and Australia’s interest in the end-to-end supply for the product, will present new opportunities for Australia to secure the logistics chain, gain economic benefit and create new Australian jobs.

This submission, and numerous others that have preceded it referenced herein, provide the detail on the how to build these and elaborate on why it essential to do so without further delay.

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