Australia Advances Plan for Strategic Fleet Following Taskforce Report

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The Australian government is moving forward with its plans to set up a strategic national fleet of 12 Australian-flagged and crewed commercial cargo ships.  The task force established to explore the viability of the project released its report today supporting the proposal made by Prime Minister Anthony Albanese during his political campaign.

The Independent Taskforce on the Strategic Fleet was launched a year ago to study the issue and propose the best approach. Its final report builds a strong case for the need to invest in the fleet and offers a roadmap on how the government can proceed with the plan that is aimed at bolstering the country’s maritime and freight sectors. Political leaders said after seeing the impact of the pandemic on the shipping industry that an Australian fleet is critical to safeguarding from increasing uncertainties in the global commercial shipping industry.

The vessels, which will be privately owned and operated, would also be available to the government for requisition during times of national need such as natural disasters or times of conflict. This, according to the government, guarantees economic sovereignty, national security, and offers training opportunities to boost the maritime workforce capabilities.

Catherine King, Minister for Infrastructure, Transport, Regional Development and Local Government, said the government now intends to “take the next steps” on the plans for the national strategic fleet after agreeing in principle with 12 recommendations of the taskforce out of the total 16 and promising to review the other four points. The recommendations address issues such as the costs, composition of the fleet, the need to improve the Australian registries, and other legislative priorities.

“We are getting on with the job of revitalizing Australia’s long-neglected maritime sector,” said King. “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.”

The decision to proceed with plans for the 12 vessels forms the first time Australia is making concrete advancement in creating and maintaining a larger register of Australian-flagged vessels after several failed attempts. In its report, the taskforce highlights the decline of the Australian fleet and the almost complete reliance on foreign-flagged vessels. The Australian fleet they write currently stands at only 15 vessels over 2,000 dwt (11 on the coast and four trading internationally). This means that in the event of a crisis, the country would have great difficulty accessing and controlling the maritime assets that it might require, the report concludes.

“This puts us in a dangerous position and needs to be reversed,” states the 92-page report. Apart from the fleet, the taskforce also asserts that demand for Australian seafarers is outstripping supply across the maritime industry, and without action, the country’s maritime workforce will not be able to meet the needs of the strategic fleet and the broader economy.

According to the report, shipping is critical to Australia’s social and economic well-being, accounting for 99 percent of goods traded by volume, and around 79 percent by value. In 2021–22, 1.6 billion tonnes of imports and exports were moved by sea, worth A$755 billion (US$485.7 billion) in total.

During the year, 26,400 foreign-flagged vessels docked in the country with 6,170 unique foreign vessels.  Bulk carriers accounted for the majority of vessels (56 percent) and containerships represented nearly 14 percent of the total ship calls.

The report identified the most significant strategic freight needs in any disruption as primarily imports and the coastal trade. It proposed that the preferred composition of an initial strategic fleet should include smaller container vessels with geared ship cranes capable of independent container operations and multipurpose vessels (MPV) capable of carrying project cargo, containers, and some bulk cargoes, and unloading using geared ship cranes.

Other capabilities of the fleet should include smaller roll-on roll-off/roll-on lift-off vessels, liquid bulk vessels configured to carry multiple grades of fuel and chemical products in independent tanks, dry bulk vessels, and break-bulk vessels.

The report concludes that these capabilities are critical considering exports account for nearly 89 percent of the total volume of sea freight handled in Australia. By volume, exports are predominantly bulk commodities such as iron ore, coal, and liquified natural gas, in total representing 90 percent of exports.

A key challenge in establishing the fleet will be the operating costs. This follows the determination that the cost gap of operating Australian-flagged and crewed vessels is much higher at A$5 to 8 million (US$3.2 to 5.1 million) annually depending on vessel type and crew numbers as opposed to foreign vessels. This means, the taskforce writes, that for the plan to succeed, the Australian government must find a way of offering financial assistance to the industry.

The government must also encourage vessel owners and operators to register their vessels in Australia’s shipping registers. This they report will require changes to the Australian General Shipping Register and the Australian International Shipping Register to make them more attractive to vessel owners and operators.

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