Tasmania

Freight to the fore

Freight to and from the Apple Isle is on the rise and industry players are investing to boost capacity to meet this growing task while also keeping an eye on sustainability, Ian Ackerman writes

Big things are happening in Tasmanian freight. The state’s economy, relatively unscathed from the pandemic, is performing well. And the Tasmanian freight task has been increasing. To keep ahead of this, the state’s port manager, TasPorts, and the shipping companies that serve the island are pumping investment into port infrastructure and new vessels to handle the busy Bass Strait trade lane.

WEATHERING THE PANDEMIC

Tasmania was hit with the pandemic economic downturn, just as every other state in the country was. However, Tasmania is recovering quickly, with promising forecasts of economic growth.

The state has managed to largely avoid widespread transmission of the virus. Its seven-day average for new cases peaked at 11 on 14 April 2020, falling to zero by 12 May 2020. In comparison, during last winter’s outbreak in Victoria, the seven-day average was above 100 from early July through late August. Tasmania has seen almost no new cases since those days last year.

This success in keeping the pandemic at bay, and avoiding the lockdowns that some cities have endured, has helped the state’s economic performance.

The latest State of the States report from CommSec, published in April, said Tasmania is Australia’s best performing economy. The report ranks the state first on relative population growth, equipment investment and dwelling starts.

And, the Deloitte Access Economics Business Outlook Report for June 2021 forecasts economic growth of 6.1% in the state this calendar year, outperforming expectations.

Additionally, Australian Bureau of Statistics labour force data for June showed Tasmania leading the country in employment growth (month-on-month). TasPorts, the state-owned company responsible for 11 ports around the state, reported total freight throughput of 14.1 million tonnes in its most recent annual report, for the 2019-20 financial year. This was a decrease of 9.5% in overall throughput on the previous year.

TasPorts said the decline reflects a downturn in international demand for forestry products and other commodities, along with the impact of the pandemic.

However, looking to containerised freight (both imports and exports), TasPorts handled more than 550,000 TEU, an increase of 3% on the previous reporting period.

The Port of Devonport handled half of that throughput (277,000 TEU). The Port of Burnie handled most of the other half, with 238,000 TEU (43% of the total). And the Port of Bell Bay handled more than 26,000 TEU over the course of the year.

And until the pandemic halted cruise ships in mid-March 2020, there were 122 port calls at TasPorts’ ports, bringing more than 190,000 passengers to the state. The short-term outlook is not good for a return of cruise ships. The Australian government has banned foreign-flagged cruise ships from the country through mid-September.

TasPorts executive general manager, corporate affairs, Kate Dean told DCN freight volumes were on track to increase in the 2020-21 financial year, with a continued lift in volumes.

“At this time, with container volumes, we’ve seen about a 6.6% increase this year,” she said.

“Last year, we mentioned in our annual report 14.1 million tonnes transited through the multi-port system. Currently, we’re on track to exceed that this year in growth. Given the backdrop of aspects such as COVID, it’s positive to see that we’re seeing an increased lift in freight growth.”

The Port of Melbourne’s June trade report also indicated continued increases in trade to Tasmania. Full container trade between the Victorian port and Tasmania, excluding transhipments, increased 24.4% compared with June 2020 to a total of 18,152 TEU.

While trade was on the increase over the past year, global issues are impacting local importers and exporters. Agility Logistics state manager – Tasmania Brett Charlton said container availability is an issue for Tasmanian exporters.

“We’re struggling with equipment availability, we’re certainly seeing significant disruption to the international supply chains down here,” he said.

“We’re hand-to-mouth with equipment down here, to the point where we’re using 40-foot containers rather than 20-foot containers, but even that’s difficult.”

TASMANIA’S LIFELINE

Bass Strait is Tasmania’s lifeline to the mainland of Australia and the wider world. TasPorts, along with the companies that operate the ships that ply the waters of the strait are investing in bigger, better and more efficient ships and freight infrastructure.

As Devonport handles half of Tasmania’s containerised freight, it is of vital importance. TasPorts is investing $240m in a re-development project at the port.

TasPort’s Ms Dean said the project will facilitate an increase of 40% in freight at the port through the ability to accommodate larger vessels.

“The Port of Devonport is an absolute critical piece to Bass Strait Shipping services, and this re-development is an absolute generational change for Tasmania. The investment will facilitate a significant increase in capacity for both freight and vehicles over a 25 to 30-year horizon,” she said.

“We have a clear vision for the Port of Devonport, and with the Tasmanian government’s approval of the business case, we’re now moving into the finalisation of the plan to ensure that it is absolutely aligned and supports our customer requirements.”

The port’s location, at the mouth of the Mersey River, means there is a natural constraint on the size of ships that can access the port.

“With the Devonport East project, we’re looking to maximise as much as possible the length and draught of the vessels that can come to the port,” she said.

“We’re seeking to support the future growth in freight for Tasmania.”

COMPETITION ON THE STRAIT

While TasPorts is working to boost capacity of the main freight gateway in northern Tasmania, the three major ship operators on Bass Strait have likewise been investing in more capacity. All three – SeaRoad, Toll Group and TT-Line – are making, or have made significant investments in new, bigger ships.

SeaRoad executive chairman Chas Kelly confirmed that the Bass Strait trade is performing well.

The industry has been very resilient and has been able to cope with the challenges of the pandemic.

"Shipping volumes across Bass Strait have continued to grow over the last 12 months,” he said.

“Market growth has been consistent over a number of years. The influx of tourism to Tasmania has also assisted the state’s economy, which has had a flow-on effect on freight volumes.”

SeaRoad introduced the vessel MV Liekut earlier this year as a charter vessel for three years. It is significantly bigger than the SeaRoad Tamar, which it replaced.

SeaRoad has, of course, introduced the 210-metre MV Liekut charter vessel for three years. The new vessel is significantly bigger than the 147-metre SeaRoad Tamar, which it replaced.

“The Liekut has performed beautifully,” Mr Kelly said.

“It’s been very well received by customers, and crew members are settling in and enjoying the ship. We’ve experienced some small operational issues, which is relatively normal when you introduce a new vessel. The operational issues have now been rectified, and we’re well prepared for the upcoming peak season. Overall, the ship has performed above our expectations.”

The SeaRoad-chartered MV Liekut at Melbourne

SeaRoad

SeaRoad is carrying out a new-build program for a permanent replacement for the SeaRoad Tamar. Mr Kelly said the estimated $190m vessel is scheduled for delivery in the last quarter of 2023.

“The project has been delayed by COVID-19 impacts, but final negotiations are in progress. The new ship will be built in Europe and demonstrates our confidence in the Bass Strait market,” he said.

“The newbuild will replace the Liekut and in fact will be even larger than the Liekut, which will be returned to Europe.”

Mr Kelly said the main challenges and priorities he sees going forward includes changes in port infrastructure on both ends of the run.

He said SeaRoad is relying on TasPorts to deliver the Devonport East project on time and prior to the new vessel arriving.

“This is needed to provide more space and includes upgrades to navigational aids plus some infrastructure works,” he said.

Also, Mr Kelly said the company is in negotiations with the Port of Melbourne about the relocation of the trade from Webb Dock to Appleton Dock around 2028.

“This [relocation] will be a potential challenge for us in terms of attaining a facility that meets our needs, customers accepting the new location, and the ongoing costs associated with this,” he said.

Mr Kelly said another area of focus for the company is clean energy.

“We will continue to monitor regulatory requirements and ways in which we can reduce our carbon footprint. This will be a core consideration in how we do our business and how we invest moving forward,” he said.

And also, SeaRoad is also streamlining and automating systems and processes with an investment of $6m.

“This incorporates a new booking system, terminal operating system and gate operating system. Customers will have the ability to track freight while inside our terminal and they will be able to book directly online,” Mr Kelly said.

SeaRoad plans for the system to be fully operational in the 2022-23 financial year.

NEW SHIPS ALREADY IN THE WATER

Toll Group, one of the big three Bass Strait shippers, recently made some significant investment in the trade, with two new vessels coming online in 2019.

Toll Group executive general manager Steve Borg said those vessels, the Tasmanian Achiever II and the Victorian Reliance II, have increased the company’s Bass Strait trade capacity by 40%.

“Consistent with this uplift in capacity, we have made a number of staged investments in wharf infrastructure and equipment including several large orders of shipping containers, a combination of ambient-specific designed containers and reefers,” Mr Borg told DCN.

“We have also increased our fleet of overdimension MAFIs by 400% to cater for steel-tracked and other large machinery cargo that are now in service. Toll has also invested in upgrading 10 container forklifts across the business – with another four in pipeline – in addition to several new lashing trucks and terminal tractors.”

Toll’s Victorian Reliance II at Melbourne

Toll

Mr Borg said since investing in the two new ships, the company has continued investing in the Bass Strait trade route to increase capacity.

“Our upgrades to the Webb Dock transport depot have created a safer work environment for our people, as well as greater warehouse capacity, increased crossdock footprint and container storage and handling footprint,” he said.

“Our staged depot development at Launceston is continuing to better support Launceston’s economic growth. We have commenced civil works, including drainage and hardstand upgrade on the 90,000-square-metre site.

“The next phase will include a warehouse expansion. We have also continued to progress reviewing our Burnie port and infrastructure expansion project, which will include an increased terminal layout footprint.”

Mr Borg said over the past 18 months, Toll has seen continued strong demand from customers, and a key change over the period has been the shipping schedule.

“We now sail later in the day (>18:00) and arrive into Melbourne one hour earlier, at 06:00. This schedule flexibility has enabled us to better cater to the customer needs by offering later cut off times,” he said.

And at its terminals, Mr Borg said efficiency is up, particularly in Melbourne, with handling time decreasing from more than an hour to 30 minutes per truck.

“Further, we can now handle Super B Doubles and A Doubles throughout the daytime, whereas previously, these large truck movements were only handled later in the day and early evenings,” he said.

“In the last 12 months, our shipping volumes have grown by around 11%, with the most recent June 2021 quarter seeing volumes increase by 25% on the prior period,” he said.

These higher volumes reflect the continued strong trade in Tasmania, which are comfortably supporting as a result of our investments in our shipping operations.

Mr Borg said in addition to investments in infrastructure and efficiency, Toll has been improving its environmental footprint.

“Our new vessels produce less emissions and fully comply with stricter sulphur emissions standards,” he said.

NEW SPIRITS

The operator of the two Spirit of Tasmania ships, TT-Line, is likewise investing in a brace of new vessels. These new vessels will be bigger than the existing Spirit of Tasmania I and Spirit of Tasmania II, but they will be of a similar design.

TT-Line said the new vessels will have a substantially larger capacity for passengers, passenger vehicles and freight.

Earlier this year, the contract to build the two 212-metre vessels was awarded to Finnish shipbuilder

Rauma Marine Constructions. Delivery of the new vessels is slated for late 2023 and late 2024, with construction to begin in early 2022.

While construction of the vessels will take place in Europe, a portion of the spend on the new vessels will be directed to local companies.

In a media statement, Tasmania minister for infrastructure and transport Michael Ferguson said the state government is ensuring local companies are able to “capture up to $100m of the historic $855m spend on the new TT-Line ferries”, meaning that up to 12% of the spend on the ferries would go to Australian companies.

PRIORITY PORTS

This year, Infrastructure Australia’s Infrastructure Priority List included two projects in Tasmania: an increase in capacity at the Port of Burnie and a re-development of the Macquarie Wharf Precinct at the Port of Hobart.

In Burnie, Infrastructure Australia said the port could add additional berth and terminal capacity to support larger ships. Also, channel works could be carried out and other port infrastructure added.

In a media statement, TasPorts CEO Anthony Donald said the inclusion of two Tasmanian port infrastructure initiatives on the nationally significant list is reflective of the company’s commitment to future-proofing Tasmania’s multi-port system for the benefit of all Tasmanians.

Mr Donald noted that TasPorts vision for the Port of Burnie was announced in August 2020, with details released about the Burnie Export Gateway Initiative.

“The initiative will lay the foundation for exponential growth in Tasmanian mineral exports to global markets, enabling capacity for larger vessels to berth and ensuring fit-for-purpose terminal infrastructure,” Mr Donald said.

It will bring significant benefits to Tasmania through the provision of essential port infrastructure that enables exponential growth in mineral exports to global markets over a 30-year horizon.

Ms Dean said TasPorts is proud of the recognition of the Burnie Export Gateway project on Infrastructure Australia’s Priority List because it recognises the significance of investment into the port system in Tasmania, and it recognises that it’s of national significance.

“This is another major piece of port infrastructure that is designed to facilitate future exponential growth, in particular, in the minerals sector,” she said.

“Working with industry, understanding future demand, we’re now in a position that we are developing a business case for the Burnie Export Gateway, which the state government provided a $5m contribution at the election to the development of that business case.”

While the plan for the Burnie Export Gateway is still being finalised, Ms Dean said there are several other projects TasPorts is working on at Burnie.

“One is the ability to accept larger vessels at the port and increase the frequency of vessels coming into the port,” she said.

“Also, we’re looking to enable additional capacity of up to 2m tonnes of iron ore bulk mineral export per year. It is all about being able to facilitate that trade growth.”

The other infrastructure priority-listed project is a $150m re-development of Hobart’s Macquarie Wharf, which TasPorts says will position the port as the “international gateway to the Southern Ocean”.

The re-development plan aims to increase the ports capacity to handle larger vessels, such as the Australian Antarctic Division’s new icebreaker, RSV Nuyina, and big cruise ships.

TasPorts’ proposal for the project includes the construction of a new 150-metre quay line, bringing the continuous quay line to 720 metres.

GROWING GREENER PORTS

TasPorts, in its Health, Safety and Environment Policy, said it is committed to conducting business activities in a safe and environmentally responsible manner. It said sustainability is a whole-of-business concept.

Ms Dean said it is critical that, as Tasmania’s multiport system, TasPorts plans for a sustainable future.

“As a result of that, we spent considerable time developing our own standalone sustainability strategy,” she said.

“The strategy is strongly aligned with the United Nations Sustainable Development Goals and it is supported through the World Port Sustainability

Program, and also Ports Australia’s Port Sustainability Strategy. These are the critical pieces we considered in the development of our own standalone strategy.”

The strategy has three core objectives: developing sustainability as a way of thinking, embedding sustainability across the business and taking clear and decisive action in relation to climate change.

“We commenced the planning around the strategy early this year. We have done our first-pass climate change risk assessment, which is part of that scoping the full extent of our climate adaption plan,” Ms Dean said.

“We are moving towards our second-pass climate change risk assessment as well. This will identify all climate-related risks across our facilities and then will form the basis of our actual adaption plans.”

TasPorts is working towards becoming certified by EcoPorts the port sector’s global environmental and sustainability standard.

“We’re aiming towards certification in the 2022 calendar year,” Ms Dean said.

“We’re already doing our initial assessments and working through all of the pieces that are required to enable that certification.

We see this as being incredibly important in terms of our sustainability work.

And at a more local level, TasPorts has also developed a series of environmental standards for issues such as birds, noise and light management at its ports.

“We’re getting tremendous feedback from stakeholders – whether they be port users, customers, or industry – about the creation and publication of these standards.”

Ms Dean said there are already rewards and benefits for local communities from putting the standards into operational effect.

Focusing on the light management standards, Ms Dean said artificial lighting can include lights from vessels and lighting within a port, and it can cause environmental harm or nuisance.

“The recognition here is that light plays a key role in animal behaviour, including directional cues for migratory birds, for example.

“Particularly seabirds are sensitive to light pollution, and they can become disorientated or trapped by intense light,” Ms Dean said.

“The standard doesn’t jeopardise or compromise lighting required for safe work or safe navigation. What it does do is improve safety by promoting efficient and effective use of lighting to reduce things like glare, over-illumination or light spillage.”

TasPorts has also recently released an event sustainability standard as well. Many popular events – such as Dark Mofo, the Sydney to Hobart Yacht Race – are held on TasPorts land, so the port corporation has developed sustainability standard that provides guidance around sustainable event operations.

“It helps people that are hosting events on our land to understand our expectations and the standards to which they need to comply,” Ms Dean said.

As part of its commitment to safety, TasPorts recently launched a new incident management system, whereby employees can file incident reports easy with an app installed on a mobile telephone.

Ms Dean said the IMS, called Beacon at TasPorts, has an easy-to-use mobile-optimised interface, and is quick and easy to use in the field.

“Employees can take a picture of a hazard out in the field, and within 30 seconds, they can put it into our system. That has a risk rating matrix sitting in the background, which then escalates any entry to the appropriate levels of management.”

“Beacon is a significant step forward in the way that we manage and report. It’s really a critical part to that evolution of a prevention and care culture for in our business.”

Tasmania, the island state of an island nation, is absolutely dependent on seaborne freight. And this reliance will only grow with increased economic activity and the attendant growth in freight demand.

However, the state will be well prepared with significant investments in bigger ships and bigger, better ports to serve the Apple Isle.