DCN Magazine October 2022

Page 22

the dcn.com.au First published in 1891 The voice of Australian shipping & maritime logistics A LOOK AT MARITIME ENGINEERING & SALVAGE 26 Bugbears re-emerge in liner trades to Europe 32 The future of freight in the mid-pandemic era 40 A deep dive into Victoria’s logistics sector October 2022 Heavy lifting
the dcn .com.au4  October 2022 XXXXXX Contents COLUMNS FEATURES 26 Liner trades to Europe Bugbears are re-emerging after a period of favourable conditions 32 Supply chain & logistics Securing the future of freight in the mid-pandemic era 40 Victoria A deep dive into developments in the state’s ports sector 46 Maritime engineering & salvage It was a big year for the salvage and wreck removal industry 16 Conference roundup The Ports Australia conference 20 Women in maritime Designing diversity into the maritime industry 22 Industry opinion Mitigating the impacts of climate change 24 In detail Introducing Strait Link 56 Industry opinion FTA comments on Australia’s biosecurity measures and response preparedness 58 Trade law Judgements discussed at recent IFCBAA CPD forums 60 Maritime history Concerns around cold storage and meat trade in October 1922 62 Out & about The APSA Conference 2022 64 Maritime country profile Greece 65 Industry opinion Thrusters and technology for safer navigation 66 The grill In conversation with Southern Ports CEO Steve Lewis 26 32 40 46

Australia’s largest container & general cargo port

From the editor

The Productivity Commission’s draft report on Australia’s maritime logistics system, released in early September, caused consternation in some and jubilation in others. However, I would venture to say that all this celebration and gnashing of teeth may be a little premature. It is a draft report, released for consultation.

And once the commission folds in the feedback it wishes to and releases a final report, there is no guarantee government will act on its findings. The report’s impact will almost certainly not be nothing.

It will be interesting to see how it drives policy, particularly now, as the federal government seems to be moving towards establishing its promised taskforce to look at a potential “strategic fleet”.

You can read a truncated version of the DCN’s coverage of the Productivity Commission’s draft report on page 8, with more detailed coverage on our website.

Also in this issue we have an in-depth look at the world of salvage and maritime engineering on page 46. Additionally, our special correspondent Dale Crisp gives his laser-sharp analysis of the container-liner trades between Australia and Europe starting on page 26.

And finally, I am looking forward to seeing everyone at next month’s DCN Australian Shipping & Maritime Industry Awards.

Ian Ackerman

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Daily Cargo News acknowledges the Cammeraygal people, the traditional custodians of the land on which this publication is produced. We pay our respects to their elders past and present. We extend that respect to all Aboriginal and Torres Strait Islander peoples today.

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the dcn .com.au6  October 2022
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News in brief

Productivity Commission report explores “underperformance” of Australian ports

The Productivity Commission on 9 September released its draft report into Australia’s maritime logistics system, and it is calling for reform to overcome perceived underperformance.

The draft report, Lifting productivity at Australia’s container ports: between water, wharf and warehouse, has been a work in progress since December last year, when the Productivity Commission launched an inquiry into the structural issues affecting productivity in the nation’s maritime system, and in particular, container ports.

A key point raised in the draft report is that that inefficiencies at Australia’s container ports cost the Australian economy an estimated $605 million a year.

Commissioner Stephen King, one of two productivity commissioners who carried out the inquiry, said Australia’s major container ports underperform their “best practice” peers overseas.

“Underperformance on Australia’s ports directly costs business and consumers,” Commissioner King said.

“Any sustained disruptions to imports or exports magnify these costs across the economy because of the critical role of ports to trade and commerce.”

But the Productivity Commission suggested that increased productivity is achievable, adding that considerable variation in performance across container terminal operators is pointing to potential productivity gains from more consistent performance.

Another factor perceived to have lowered productivity at container ports

held enough significance to be considered a key point of the report: that workplace arrangements are lowering productivity, and incremental changes to the Fair Work Act are needed.

Commissioner Julie Abramson, who conducted the inquiry alongside Commissioner King, said workplace arrangements at container terminals are holding back productivity.

“Highly restrictive clauses in terminal operators’ enterprise agreements limit the ways that workers and equipment can be deployed,” she said.

The commission said limits should be placed on clauses in container terminals operators’ enterprise agreements that are “highly restrictive” and constrain the ways workers and equipment can be deployed.

The report also raised the issue of lack of competition, which in some parts of the maritime logistics system means consumers are paying too much.

Transport operators, it said, have no choice about which terminal they use when picking up or dropping off a container, so must pay whatever price is set by the terminal operator.

Recent rapid increases in terminal access charges have reportedly flowed through to cargo owners as well as consumers.

The Productivity Commission said in its draft report that terminal operators should only be able to levy fixed charges such as terminal access charges on shipping lines, which can choose which terminal to use.

And, transport operators and cargo owners are reportedly paying fees to shipping lines for the late return of containers even where the delay is because empty container parks are full. Commissioner King identified the use of market power as a problem.

“Truck drivers have to pay whatever price the terminal operator demands to pick up or drop off a container,” he said. “The shipping lines choose the terminals so they should pay these charges.”

On a more encouraging note, the draft report found infrastructure needs in the maritime logistics system are being addressed, and the adoption of technology at Australia’s container ports is broadly in line with international practice.

Though the coverage of the report extends well beyond the key points outlined, one more point was considered vital enough to communicate from the outset: that “concerns about domestic shipping capacity and training may be better resolved by means other than a strategic fleet”.

The Productivity Commission argued capacity could be acquired as needed from the international market without the costs involved in supporting a national strategic fleet.

And, it said Australian-flagged vessels are “not a prerequisite” to meeting maritime skill requirements.

According to the report, cadetships and skilled migration “appear to be working well” in meeting needs for blue-water experience.

the dcn .com.au8  October 2022
Full details at thedcn.com.au

TOLL SHIPPING, NOW STRAIT LINK, BECOMES INDEPENDENT SHIPPING COMPANY

Toll Shipping announced it has become an independent shipping company in Tasmania under a new identity and new name: Strait Link.

Toll Shipping was part of the Toll Global Express group (now Team Global Express) which connected the island state with the mainland through its dedicated Tasmania Shipping service.

In September last year, private equity company Allegro Funds acquired Team Global Express from Japan Post, the parent company of Toll Group.

Toll Shipping now operates under its new name independently from the Team Global Express group.

Though Strait Link will be an independent company, it will still operate within the Allegro portfolio of businesses.

The renaming comes with a new brand identity inspired by the company’s connection to the Bass Strait and Tasmania.

Strait Link CEO Gary Allen said the company would continue to support local Australian businesses by building strong partnerships and maintaining established services.

“We are dedicated to supporting Tasmania to achieve its ambitious export growth targets and make a positive contribution to the Australian economy,” Mr Allen said. He said the newly appointed leadership team would build on the strong foundations already in place.

“We have a proud history ... with a dedicated workforce who are highly skilled and passionate.”

Coastal shipping company welcomes new cargo vessel

Coastal shipping company Consort Express Lines has expanded its fleet with the acquisition of a new cargo vessel.

Consort purchased the 90-metre-long Kimbe Chief along with another barge and 1000 new shipping containers.

Kimbe Chief will be deployed on Consort’s weekly Lae-KimbeLae Niugini Islands route. It has its own crane and “generous capacity” for cargo.

Thomas Bellamy, chief operating officer of Steamships (which owns Consort) said the company bought the vessel to better service the importers, exporters and communities that rely on the route.

“Having one of our vessels solely dedicated to the route enables Consort to provide a more reliable and efficient service,” Mr Bellamy said.

He said the addition of the new vessel will free up other vessels that previously serviced the route and minimise the impact of any unanticipated maintenance issues with Consort’s wider fleet.

“We’re now more favourably positioned to not only provide an enhanced service between Lae and Kimbe, but better services across all routes,” Mr Bellamy said.

“Furthermore, the expanded fleet has increased our charter project capabilities, which is particularly important for some of our biggest customers, including those in mining, as well as oil and gas.”

He said the company’s investment in the barge and extra containers, including high-cube reefers and 20-foot and 40-foot dry containers, is important for service capability as well as safety.

OPERATIONS BEGIN AT TIMOR-LESTE PORT

Tibar Bay Port in Timor-Leste has welcomed maiden calls from two vessels as part of the new port’s operational trials.

The port was built recently to alleviate congestion building around Port of Dili, which was the only international port in the island nation until now.

PIL subsidiary Mariana Express Lines announced its vessels Kota Dunia and

Selatan Damai called the new deepwater port over two days between 14 and 16 September.

Over the two-day operational test phase, the port handled nearly 1000 containers from both ships using the terminal’s digital operating systems.

Mariana Express Lines general manager Lee Chin Giaf said the company had been calling Timor-Leste for more than a decade.

“We are very pleased to have the opportunity to show our commitment to the growth of Timor by deploying two of our vessels to participate in the testing of the country’s new world-class facility,” he said.

“We look forward to working closely with Timor Port and Bolloré Ports on the successful development and launch of the new port as part of its ambition to drive economic growth for the country.”

the dcn .com.au 9October 2022  Strait
Link;
Consort
Express Lines The Toll ships are now run by Strait Link The Kimbe Chief

NOISY NUISANCE SHIP TO BE SHUNTED FROM SERVICE

Noisy nuisance ship Safeen Prime was scheduled to call Port Nelson in September in what the port expected to be its final visit to the port.

The vessel will be phased out of ANL’s TTZ service, to be replaced by a yet-to-be announced vessel.

Safeen Prime has left a trail of noise complaints across a number of Australian and New Zealand ports over the past several months.

Now, Port Nelson said it has limited the vessel’s time at the port for its final visit.

“We will endeavour to have the vessel leave the berth as

soon as there is sufficient water depth on the rising tide,” the port said in a statement.

The vessel’s operator, ANL, and its owner have made modifications to the vessel to manage noise and is to carry out further changes.

Port Nelson said the ship has modified funnels on the generators to reduce noise and implemented operational procedures designed to reduce the noise levels.

The TTZ service calls weekly at the ports of Sydney, Melbourne, Auckland Tauranga, Wellington, Nelson and Lyttelton. Three vessels are deployed on the service.

NEW ZEALAND SHIPPING DELAYS SKYROCKET

An increase in shipping delays to Oceania is hitting New Zealand particularly hard, according to a report from logistics technology company Project44.

The report, State of Ocean Freight – Oceania + Japan, attributes the delays in shipments from China to global port congestion, but notes New Zealand is facing another layer of challenges as carriers prioritise more profitable routes.

John Brazil, vice president Supply Chain Insights at Project44, said there is still a crisis in the supply chain, especially in New Zealand.

“Compared to Australia, many exporters and importers are still waiting weeks longer for shipments,” he said.

A comparison of quarter-on-quarter data between 2019 and 2022 illustrates the severity of the impact on New Zealand, according to Project44.

Data suggests shipment delays from China to New Zealand increased by 144% in the third quarter of this year compared to the same quarter in 2021, and by 372% compared to that of 2020.

When Project44 compared the data from the third quarter of 2019 to the third quarter of this year, it found shipment delays from China to New Zealand were up by 6764%.

The report found customers in New Zealand who order the same goods at the same time as customers in Australia are generally receiving their goods several weeks later than they are received in Australia.

“One of the main reasons shipping to Australia was less affected by delays was that it has more ports for ships to call into in case of congestion,” the report said.

Methanol-powered coastal shipping in the offing

New Zealand freight transport and warehousing company Move Logistics Group is working towards acquiring a methanol-powered ro-ro vessel to be deployed on coastal routes.

Earlier this year, Move secured NZ$10 million in co-investment funds from transport agency Waka Kotahi to support coastal shipping initiatives that improve the competitiveness of domestic coastal shipping, reduce freight sector greenhouse gas emissions and enhance resilience.

According to Move, Waka Kotahi has endorsed the proposal for the ro-ro vessel design, which includes a methanol tank and pipework. This ensures the new vessel will be ready for the swap-in of methanolpowered engines as they become available.

Move executive director Chris Dunphy said the company is committed to decarbonising its freight activities.

“Our decision to invest alongside Waka Kotahi demonstrates the very real nature of how a former trucking company can become truly multi-modal and offer resilience to our clients via coastal shipping,” he said.

Port of Tauranga, New Zealand

Move said the new vessel will be able to call into at least 13 New Zealand ports without the need for any new port infrastructure to be built. The vessel will initially operate three sailings a week between Nelson and New Plymouth.

the dcn .com.au10  October 2022 NEWS IN BRIEF
Trabantos; Port of Tauranga
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Government subsidises monthly barge service to Norfolk Island

On 1 November Neptune Pacific Direct Line will commence the first of four planned sailings of a barge service between Brisbane and Norfolk Island.

A statement from NPDL said the service was secured via collaboration and financial support from the Australian government.

According to NPDL, the barge has a cargo capacity for 1000 tonnes or 26 containers and 350 tonnes of breakbulk.

Minister for territories Kristy McBain said the sailings would help address the immediate shortages islanders are experiencing and support businesses and the community through the summer tourist season.

“Government financial support for the barges is the first in a series of measures to stabilise sea freight in the short-term,” she said.

Ms McBain said other initiatives are under development and discussions with stakeholders and shipping providers are progressing.

“In the meantime, we will continue to subsidise air freight flights to help address critical shortfalls,” she said.

PATRICK MARKS 20 YEARS OF AUTOMATED STRADDLE CARRIERS

Saturday 24 September was the 20th anniversary of the first ship ever worked with automated straddle carriers in Australia.

The COSCO ship Hong Yun He came alongside at Fisherman Islands Berth 7 and stevedores commenced on the midnight shift into 24 September 2002 – the first use of the automated straddle carrier technology in a live, commercial environment.

Patrick Brisbane Autostrad Terminal manager Matt Hollamby said the technology was developed by Patrick, under the leadership of Chris Corrigan, in partnership with the Australian Centre for Field Robotics at the University of Sydney.

He said Patrick had acquired the lease on Berth 7, the old Sealand terminal, at Port of Brisbane.

Two sailors rescued in Tasman Sea

The Australian Maritime Safety Authority co-ordinated the rescue of two sailors from a yacht in the Tasman Sea with assistance from the Royal Australian Airforce and New South Wales Police.

Two merchant vessels were also diverted to assist if required.

AMSA was advised by a family member of the crew that the yacht, Aviva, had been damaged and began taking on water when it encountered 10-metre seas and high winds in the Tasman Sea.

The two crewmembers on board, understood to be aged in their 70s, activated an emergency beacon at around 0500 on Monday 5 September.

“AMSA responded with its Melbournebased challenger rescue aircraft which

established radio communication with the crew on board the vessel,” AMSA said in an update.

“The Australian Defence Force responded with multiple RAAF aircraft, to ensure continued communication and observation of the vessel.”

By Tuesday afternoon, the vessel was around 164 nautical miles east of Lord Howe Island, and NSW Police vessel Nemesis was en route to the vessel.

AMSA also diverted two merchant vessels, Liberian-flagged chemical tanker Ionic Artemis and Marshall Island-flagged bulk carrier Fairchem Aldebaran to assist if required until Nemesis arrived.

“The Nemesis arrived at the scene … and rescued the two crew members,” AMSA said.

“Corrigan took the lease on that facility in 2000 and we spent two years trialling, developing – perfecting, if you like – the automated straddle carrier technology,” he said.

“As a consequence of that work, on the 24 September 2002, we gave it a run commercially. And, as a consequence of the success of those trials, we moved on to build the fully automated terminal that you can visit here today.”

Mr Hollamby said the transition to autostrads was completed without any lost time.

“These changes are quite profound, and they set the business up for success ever since.”

Mr Hollamby has been the port manager for Patrick at the Port of Brisbane since 1997.

“It’s been the greatest experience of my life to be involved in building the new container terminal and automating Brisbane,” he said.

the dcn .com.au12  October 2022 NEWS IN BRIEF
The yacht Aviva
AMSA; Patrick
The crane gang

Drugs concealed in sea-cargo coffee shipment to Melbourne

The Australian Federal Police have launched a major investigation after more than $182 million worth of illicit drugs – concealed in a shipment of coffee beans – was seized in Melbourne.

Australian Border Force officers on 18 September x-rayed a full container load of coffee beans sent to Melbourne via sea cargo from Panama.

The x-rays indicated anomalies. ABF officers, after further examination, identified substances hidden in the coffee consignment that presumptively tested positive to methamphetamine and cocaine.

Police estimate the illicit drugs have a combined estimated street value of more than $182 million.

ABF Acting Commander Uriah Turner, Maritime and Enforcement South, said ABF officers are vigilant to the methods organised crime groups use to try to illegally import drugs into the country.

“Our technical expertise and sophisticated technology means that we will find the drugs, regardless of the method of concealment these criminals use,” A/g Commander Turner said.

“The ABF is committed to protecting the community from harmful drugs and working closely with our law enforcement partners to stop the tide of methamphetamine and cocaine coming into Australia.”

AFP Detective Superintendent Jason McArthur said the seizure demonstrated how drug smugglers used any product and method to import drugs into Australia.

“This significant seizure, concealed inside a shipment of coffee beans, demonstrates we are one step ahead of these criminal networks,” Det. Supt. McArthur said.

Darwin Port announces new CEO

Landbridge Australia has appointed Peter Dummett as Darwin Port’s new chief executive officer.

Mr Dummett had served as the port’s acting CEO for the past three months. Following the announcement, he will maintain his responsibility for the overall operations and management of the port.

Mr Dummett joined Darwin Port Corporation in 2011 as general manager port development and continued in the role through Landbridge’s acquisition of the port in 2015.

Darwin Port’s non-executive director Terry O’Connor welcomed Mr Dummett to the role and praised his maritime experience and knowledge of the Northern Territory business sector.

“Peter will be a solid leader for the port, with his extensive knowledge and experience in maritime, shipping, trade and logistics,” Mr O’Connor said.

“We remain committed to the Northern Territory, and I look forward to working with Peter, his team, the Northern Territory government and industry stakeholders to develop and grow trade in the Territory.”

Mr Dummett’s maritime career began in the Royal Australian Navy, where he developed an interest in commercial shipping.

He then moved on to various roles in the shipping industry including regional development manager with Swire Shipping.

During his time at Swire Shipping, Mr Dummett was involved in the promotion of the Northern Territory government’s AustralAsian trade initiative, which involved collaboration between the state government, Swire Shipping and the port of Darwin.

During that time, he served as a member of the executive of the Northern Territory Chamber of Commerce International Business Council for four years, which included two years as deputy chairperson.

Mr Dummett then joined Perkins Shipping as coastal trades manager where he was responsible for contract management of agreements between Perkins and Rio Tinto, GEMCO and Woolworths.

the dcn .com.au14  October 2022 NEWS IN BRIEF
INDUSTRY EVENTS To notify DCN of events please email us at editorial@paragonmedia.com.au 2022 EVENT 4 Nov SCLAA ASCL Awards and Gala Dinner Park Hyatt Melbourne 10 Nov 2022 DCN Australian Shipping & Maritime Industry Awards Plaza Ballroom, Melbourne 2 Dec SAL (NSW) Christmas Luncheon Hyatt Regency Sydney
Australian Federal Police Jim Wilson The shipment of coffee beans containing drugs

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Ports Australia Biennial Conference

Ports and maritime industry leaders met in Queensland to process the challenges that defined the past two years and build a vision for the years ahead

MORE THAN 300 PEOPLE FROM across the ports and maritime industry gathered in Brisbane recently for the Ports Australia Biennial Conference.

This year’s program followed the theme of “risk and resilience” and featured keynote speakers and panellists representing organisations throughout Australia, Papua New Guinea, New Zealand, Singapore, Canada and Belgium.

The first item on the agenda was a tour of Port of Brisbane’s recently opened international cruise terminal on the afternoon of 30 August.

That evening, guests settled into conversations and canapés at a cocktail function at the luxurious W Brisbane hotel. They were formally welcomed by Ports Australia CEO Mike Gallacher; AMS Group CEO Glen Marshall; Catherine King, federal minister for infrastructure, transport, regional development and local government; and Queensland deputy premier Steven Miles.

Ms King thanked the ports sector for its role in maintaining the flow of freight in and out of Australia during “some

incredibly difficult times” and set the tone for the coming days.

“There does remain some significant challenges through some of our supply chains, though the role of shipping and our ports have never been more critical,” Ms King said.

“One of those challenges … is decarbonisation and how critical that is for the sector, and how challenging that is for the sector. But I also want to note that it’s a challenge you’re all up for.”

RISK, RESILIENCE AND RECOVERY

In an opening address the next morning, Mr Gallacher reminded delegates of the backdrop the conference was unfolding against – a backdrop of supplychain challenges previously deemed unimaginable.

“And yet, despite the ongoing domestic pressures caused by this freight tsunami, together with long-running differences between some in our sector, the Australian port sector remained open,” he said.

“As panic buying took hold, the supply chain felt the pressure. But it never failed.

We had the nation’s back. Friends, let’s not lose sight of what we have achieved over the last two years.”

In a virtual presentation, International Association of Ports and Harbors technical director Antonis Michail said the notion of risk and resilience is not limited to the disruptions that made headlines over the past two years. It applies other forms of disruption that can impact a port, from cyber-attacks or loss of power to industrial strikes or bankruptcy of a major port user.

“If we accept disruption as part of a normal business, then that implies we need to put much greater attention and focus on resilience and on our ability to rebound from the disruptions,” he said.

Building off the challenges of risk and resilience, a panel session moderated by TasPorts CEO Anthony Donald explored the elements of recovery. Resilience NSW Commissioner Shane Fitzsimmons, TT Club’s Asia Pacific regional director Philip Emmanuel and the Australian Chamber of Commerce and Industry’s economics, employment and skills director Jenny Lambert sat on the panel.

the dcn .com.au16  October 2022 Abby Williams CONFERENCE ROUNDUP
An organist provided the entertainment during the conference gala dinner in Brisbane City Hall

Mr Fitzsimmons reminded the ports sector of the vital role it played during desperate situations experienced recently.

“When you’ve got supply chains that are so heavily disrupted domestically and abroad, sometimes I would wager a bet that when the ports industry is looking at their remit, they may not always appreciate just how significant the flow-on effects are and the interdependencies are for having good, efficient supply chains and delivery mechanisms,” he said.

DIGITALISATION AND BORDER SECURITY

David Foo, assistant chief executive, operations technology at the Maritime and Port Authority of Singapore, then discussed digitalisation through the lens of the port authority’s digital port ecosystem.

Describing data as “the new fuel”, Mr Foo explained how digitalisation has helped strengthen the port’s resilience during and despite the pandemic, enabling Port of Singapore last year to handle a record 37.5 million TEU.

Australian Border Force Commissioner Michael Outram then spoke about how technology, innovation and engagement with industry can help streamline and secure the Australian border.

“We need to better articulate the border as a strategic national asset and to reframe pretensive policy thinking to account for this,” Mr Outram said.

“If we’ve learned a lesson from the pandemic, it’s the significance of our border to our ability to respond in crisis.

“We need to better articulate the prize that’s on offer for Australia if we deliberately modernise the border, but also understand the penalties that will apply for not doing so.”

Mr Outram said the ABF is currently working to counter challenges around increasing volumes of people and goods

transiting the border within a resourceconstrained environment. He said the agency is looking to modernise, which primarily involves enhancing partnerships with the industry.

“Modernising and co-designing an Australian border for the future is a key priority, and … we can’t do this on our own. It’s imperative to enhance and to streamline Australia’s export and import border practices to enable trade growth while also better protecting our community.”

THE COMPLEXITY OF SHIPPING

Australian Maritime Safety Authority CEO Mick Kinley presented an outline of risks and broader issues from a shipping perspective. Many of them stemmed from climate change or the industry’s efforts to minimise its contribution to it.

“Climate change is doing alarming and scary things,” he said. “In China where they’ve had the drought that has broken all records, heatwaves that have broken all records, shipping contracts are looking at calling force majeure because it’s too hot to be building ships out in that temperature.”

Mr Kinley also said the combination of larger vessels and more severe weather events are going to make it difficult for containerships to keep cargo on board.

“How that’s going to impact on our current emergency towing capacity is going

to play out in the future,” he said. “You need emergency towing capacity to be in the right place at the right time.”

The decarbonisation task then came into focus as Mr Kinley unpacked the safety risks around some alternative shipping fuels currently under consideration, such as toxic ammonia and flammable hydrogen.

“How many ports are going to be able to invest in the sorts of infrastructure that’s needed if they’re going to be able to

the dcn .com.au 17October 2022
(Left to right) Jenny Lambert, ACCI; Anthony Donald, TasPorts; Mike Gallacher, Ports Australia (Left to right) Fego Kiniafa, PNG Ports; Mike Gallacher, Ports Australia; Michael Minns, Department of Home Affairs (Left to right) Andrew Adam, DP World; My Therese Blank, Maersk; Stewart Lammin, Flinders Port Holdings Saul Cannon, Port of Melbourne and Merriden Varrall, KPMG Australia A conversation on the Portland Bay rescue

manage the risks … with all those different fuel mixes, and what is that going to mean for the industry of the future?”

Allan Gray, president and CEO of Port of Halifax in Canada, then took the floor to discuss approaches to port planning and how a port interacts with its surrounding environment, from landside logistics to nearby communities.

the way that our international system works,” Dr Varrall said.

“[The] liberal internationalist world order is being disrupted, and what we’re seeing instead is what some academics describe as a geo-economic order. This is one where, instead of being seen separately from politics and as a net positive, tools of economics like trade and investment

considering the state of ports and freight from their agencies’ perspectives.

Ms Cass-Gottlieb focused on competition in the ports sector and trends that had emerged over the last decade, such as governments privatising ports without putting adequate regulation in place.

“Since the ACCC’s monitoring regime started, Port Adelaide, Brisbane, Melbourne, and Botany have all been privatised, as well as two key bulk ports in Newcastle and Kembla,” Ms Cass-Gottlieb said.

She acknowledged the benefits of privatisation, including incentives for the port to achieve greater cost efficiencies and responsiveness to port users’ needs.

REGIONAL EXPERIENCES AND GEOPOLITICS

The next session was considered by many to be one of the highlights of the conference. A forum moderated by Mr Gallacher of Ports Australia comprised Fego Kiniafa, CEO of PNG Ports Corporation; Roger Gray, CEO Ports of Auckland; and Michael Minns, assistant secretary, capability within the Department of Home Affairs’ cyber and infrastructure security centre.

The goal of the forum was to share experiences from across the region-wide port sector and create a platform for leaders to learn from each other.

Mr Gray touched on some of the challenges ports in New Zealand are facing, such as port ownership models, honouring the Treaty of Waitangi and improving port safety.

And Mr Kiniafa spoke about how ports in Papua New Guinea are working toward implementing better cyber security and the smart port concept. He also highlighted recent initiatives to involve more women in the ports sector.

“On the front of women empowerment in our business, we have about 118 female employees out of 465,” he said. “A quarter of our employees are women, and five of whom are in senior management roles.”

David Wood, chief economist of the Department of Foreign Affairs and Trade and Merriden Varrall, director of KPMG Australia Geopolitics Hub then discussed the emerging economic and geopolitical landscape in a session facilitated by Port of Melbourne CEO Saul Cannon.

“What we’re seeing in our geopolitical landscape … is all adding up to a shift in

are increasingly being seen as risks and vulnerabilities and areas to be worried about rather than areas to embrace.”

PORT SUSTAINABILITY

The second day of the conference began with an opening address from Bridget McKenzie, shadow minister for infrastructure, transport and regional development. It was followed by a port sustainability panel session facilitated by NSW Ports CEO Marika Calfas. The panel included Peter Creeden, managing director of MPC International and Jason Sprott, director of Sprott Planning and Environment.

Mr Creeden broke down decarbonisation targets, the time frames in which they need to be met, and the changes on the horizon for the shipping industry.

“Changing to alternative fuels … is going to be where the next disruption comes from,” Mr Creeden said. “Forty per cent of the world vessel fleet will have to be phased out by 2030. They are no longer fuel efficient to meet expectations.

“The bonanza on the ships being built today are not about new capacity for the shipping lines, it’s about replacement capacity. And the big shipping lines are using this as a new barrier of entry to prevent newcomers into the trade. This is the new game that they’re going to play to try to keep the freight rates high and controlled,” he said.

COMPETITION AND PRODUCTIVITY

Australian Competition and Consumer Commission chair Gina Cass-Gottlieb and Productivity Commissioner Stephen King delivered back-to-back presentations

“However, Australia’s container ports are regional monopolies and in the absence of appropriate regulation, they can extract monopoly rents from users with no alternative.”

Dr King offered delegates some background as to what had prompted the Productivity Commission’s inquiry into Australia’s maritime logistics system. At the time of Dr King’s presentation, the commission’s long-awaited draft report was not yet published.

“We’re interested in productivity of ports because we’re interested in how efficient goods are coming into Australia, leaving Australia, the benefits of that for Australian exporters and for Australian consumers,” Dr King said.

The conference concluded with a supply chain efficiency panel discussion, moderated by Stewart Lammin, CEO of Flinders Port Holdings. The panel comprised My Therese Blank, head of Oceania market, regional ocean management at AP Moller – Maersk; Andrew Adam, CEO of DP World Australia; and Andrew Johnson, assistant secretary, maritime and shipping branch of the Department of Infrastructure, Transport, Regional Development, Communication and the Arts.

Panellists discussed the connection between shipping and landside in supply chain efficiency.

“If we look at the connectivity, it’s not only about being able to connect into the terminal, but also between the terminals,” Ms Blank said.

She challenged the suggestion that shipping lines were “flooding the market” with empty containers and noted carriers have also been impacted by rising costs along the supply chain.

the dcn .com.au18  October 2022
CONFERENCE ROUNDUP
We need to put much greater attention and focus on resilience and on our ability to rebound from the disruptions.
Antonis Michail, International Association of Ports and Harbors
dcnawards.com.au Join us in the heart of Melbourne for the 27th annual awards and be among the who’s who of the industry for a night of excellent entertainment and networking. Have your say, nominate for an award now. Thursday 10 November 2022 Plaza Ballroom, Melbourne MAJOR HOST SPONSOR SPONSORS Contact Lloyd O’Harte, on 0414 272 574 or email lloyd.oharte@thedcn.com.au SAVE THE DATE ! DAILY CARGO NEWS 2022 AUSTRALIAN

Diversity by design

Diversity, equity and inclusion need to be designed into the maritime industry, Jillian Carson-Jackson writes

YET AGAIN, THE JAMES WEBB

Space Telescope is presenting us with spectacular images of the universe. The images provide a view of the cosmos that offer new insights into how stars are formed. Looking at these images I am awed at the conscious effort that was taken to plan and design this six-tonne telescope as a successor to the Hubble Space Telescope.

To bring this project from concept to reality demonstrates focus, attention to detail and unwavering effort. It drives home the fact that conscious effort and planning can achieve amazing results, even when the goal you are looking to achieve may seem to be beyond the realm of possibility.

With the ongoing issues of sexual assault and sexual harassment and continued gender imbalance in the maritime industry, it may also seem that diversity, equity and inclusion goals are also beyond the realm of possibility. I believe we can achieve diversity through conscious effort, but it may mean we need

to look at diversity by design rather than diversity by chance.

CONSCIOUS CONSIDERATION

We know diversity is good for the industry, yet the maritime industry is still struggling with diversity in positions afloat and ashore. We continue to see “first woman [insert maritime role]” notifications. Why?

Perhaps we are not considering diversity, equity and inclusion at a conscious level, planning for diversity by design.

We can put a maritime industry filter over the four fundamental questions asked in any project design:

Where are we?

The industry has incredibly low representation of women in operational roles, with women representing just 2% of seafarers.

Where do we want to be?

We know we need diversity in the industry. We want to be an inclusive

industry where we can grow and thrive with diverse views and where we can build resilience in challenging times. I recently made a call in The Nautical Institute for “2 to 20” and the Women’s International Shipping & Trading Association (WISTA) Norway has launched a “40 by 30” pledge, striving towards 40% women in leading positions in the maritime industry by 2030.

How will we get there?

We can’t simply talk about diversity, equity and inclusion. This is likely the most difficult question to address. We must chart a course, put in place waypoints and monitor our progress. We need to navigate our way to where we want to be.

How will we know we have arrived?

Once we have clear vision of where we want to be and chart the course on how to get there, we will be able to monitor the route and know when we have arrived.

the dcn .com.au20  October 2022 NASA and the Space Telescope Science Institute WOMEN IN MARITIME

THREE TIPS FOR DESIGNING DIVERSITY INTO THE MARITIME INDUSTRY

There are many dimensions to designing for diversity, from how positions are advertised to company policies. Below are three tips that can help put you, and your organisation, on course.

• Implement policies that support diversity, equity and inclusion This is not simply a diversity policy, but a full review of all policies to integrate diversity. Doing a “find and replace” of gender-specific terms (for example, changing “his” to “their”) isn’t enough.

Every policy should be passed through a lens of diversity, equity and inclusion – from PPE to paternity leave options. Does the leave policy include support for couples in the event of a miscarriage, or transition leave for transgender personnel? Does the policy for hours of work include flexibility for the morning school run, or for primary caregivers of older family members?

• Use inclusive language in advertising the role

Look at how you advertise positions – what language are you using?

There are some known examples of gender coded words, as well as discriminatory language. There are many great resources out there, such as The Inclusion Hub and Culture Plus Zone online. Check out the table for examples of gender coded words – it suggests swapping words such as “competitive” and “aggressive” for alternative words such as “collaborative” and “dependable”.

Look at the wording of the job description that is associated with the application. Think about how the words may be interpreted. Is it specific to, for example, X-number of years’ experience?

The chances of diversity groups having had an opportunity to meet that requirement may be limited, which means the applications you receive will not reflect the diversity group.

It is simple to change the experience timeframe to “proven experience” and then include what is actually required to do the role.

• Design diversity into the recruitment process

Once you get diverse candidates who apply, you need to include the diversity, equity and inclusion approach for the recruitment process. Blind resumes are a great way to start! Cover over all personal information on a resume such as the name (which may have a gender focus), gender, date of birth, nationality and so on.

Review the screening factors, based on the revised job descriptions. Focus on screening for the competences of the actual job, not what has traditionally been seen as requirements for the job. This can then support the development of an application and interview rubric that supports a transparent process.

AN INCLUSIVE FUTURE

We know that the maritime industry must do more to support diversity, equity and inclusion, but knowing this isn’t enough. If we truly want to make a change, to break through the barriers and make possible that which presently, for some, seems to be beyond the realm of possibility, we need to make a conscious effort to have diversity by design.

REWRITING WOMEN INTO MARITIME

Historical accounts of seafaring women will be secured in the public domain for the first time under a new project aimed at rewriting women into maritime history.

Led by the Lloyd’s Register Foundation Heritage and Education Centre, the initiative aims to highlight the work of women in shipping over the past few centuries.

The International Maritime Organization, the International Chamber of Shipping, The Nautical Institute, WISTA and Nautilus International are among the industry organisations working together to collate material spread across historical archives.

Launched in September this year, project will begin in London before expanding internationally.

The project aims to ensure forgotten voices are heard and highlight the many maritime career opportunities available to women.

Project lead Louise Sanger said women in maritime history is an area of growing research, but there is still work to be done.

“Apart from a few notable exceptions, women have largely been excluded from the maritime history narrative,” she said.

“We hope that this new research project will help to contribute to the growing discourse of women’s history and help uncover forgotten stories.”

Natalie Shaw, ICS director of employment affairs, said women have long been part of the shipping industry and it is time for their work to be recognised.

“We are all currently on a journey, and rightfully so, to ensure that our sector is more diverse, equitable and inclusive,” she said.

“As we mark our centenary here at ICS our focus is on the future but we should not forget the past and the important role that women played in history.”

And Monica Kohli, president of WISTA UK, said the organisation was delighted to partner with others on research into the role of women in shipping historically.

“We need to know our past, and celebrate the achievements of the ladies who have been present, made a difference but not yet been recognised or acknowledged.”

the dcn .com.au 21October 2022  Image supplied
View of the Tarantula Nebula from James Webb Space Telescope (NIRCam Image)
We must chart a course, put in place waypoints and monitor our progress. We need to navigate our way to where we want to be.
Jillian CarsonJackson, managing director, JCJ Consulting

Preparing supply chains for the impact of climate change

THE UNPRECEDENTED HEAT THAT

this past summer swept the United Kingdom and parts of Europe highlighted the significant impact climate change can have on supply chains and their resiliency; particularly the cold supply chain that felt the brunt of the extreme heat.

The COVID-19 pandemic and ongoing geopolitical tensions had already wreaked havoc on global supply chains, demonstrating the significant impacts of supply chain disruption to business continuity. But even once the fallout from the pandemic subsides, the increasing frequency of extreme weather events will

whether any supply chain networks will expose their organisation to risks.

Full transparency of the supply chain footprint allows businesses to better grasp which risk scenarios at the level of supplier, component and/or raw materials will be the most important to address.

Leading organisations have started to model climate-related shock scenarios to their supply chains – an exercise which allows them to better understand the potential fallout of various scenarios and how to best manage them.

Risk scenarios consider several productspecific inputs such as supplier network

place to deal with the most likely climaterelated events.

Buffering, on the other hand, is essentially having a plan B. It means putting aside inventory as a reserve in case it is needed, as well as arranging alternative sources of supply should primary suppliers face climate-related disruption.

Buffering strategies may also include the multi-sourcing of critical materials from different geographic regions, so that if one specific area is hit by climate disaster, the other route isn’t disrupted. Organisations should include both bridging and buffering strategies as part of their climate risk management plan.

PREPARING FOR THE LONG-TERM

continue to disrupt supply chains for decades to come.

With Australia experiencing its third consecutive La Niña event this summer – an event which threatens to bring more devastating flooding to the East Coast –businesses are once again bracing for more supply chain disturbance.

As these climate events shift from being a theoretical worst-case scenario to part of the day-to-day operations, businesses must start to evaluate how climate change will continue to impact their supply chains and build resilience accordingly.

MODELLING RISK

In order to truly understand the potential risk of climate-related events on the supply chain, organisations must have a clear view of their supplier ecosystem. It is imperative to have systems in place which allow organisations to understand order status and inventory, to be across necessary levels of productions, and to determine

reliance, financial cruciality, productspecific complexity, and supplier resilience. These inputs should be mapped against climate-specific risks that can lead to financial losses; from the damage to property and other assets, to the disruption to operations, supply chains, and the broader social and economic systems upon which supply chains depend.

BRIDGING AND BUFFERING

Supply chain risk mitigation strategies can generally be categorised into either a bridging or buffering approach. Bridging is a way of strengthening relationships with suppliers in order to fortify the supply chain. It is about ensuring communication is strong prior to, during, and after any type of crisis – including climate-related events.

Working together with suppliers, organisations can help to build supply chain resilience and ensure that all parties have risk mitigation strategies in

Protecting your company from the risks of climate change is something that needs to happen today. Despite being primarily focused on how to move goods in the immediate term, supply chain professionals must consider balancing the short term goals of logistics and procurement against the longer-term risks of climate-related disasters.

Changes must be made at an organisational level that help strengthen the business against climate disruption; from making policy changes and modelling risk, to culturally preparing employees to understand the importance of climate change resilience and how to build this into the supply chain.

The time has come for organisations to move beyond the reactive approach of dealing with individual climate events, towards anticipating risks and being better prepared for ongoing future disruption.

Once an organisation is able to harden its supply chain against relevant climate risks, it will enable the organisation to operate from a position of strength, resilience and integrity, placing it at a competitive advantage to ensure sustainable future growth.

the dcn .com.au22  October 2022 INDUSTRY OPINION
The time has come for organisations to move ... towards anticipating risks and being better prepared for ongoing future disruption.
WHATSAPP SEAFARER HELPLINE +61 439 382 204 1800 554 654 FREE CALL 24/7 NATIONAL HELPLINE Supporting maritime workers & their workplace wellbeing for more than ten years www.hunterlink.org.au HunterlinkEAP hunterlinkeap

Introducing Strait Link

Formerly Toll Shipping, Strait Link has adopted a new identity as an independent company and a new vision for Tasmanian shipping

A NEW SHIPPING COMPANY has emerged in Tasmania’s maritime ecosystem following a rebranding of what was Toll Shipping.

Strait Link (originally Toll Shipping) was the local sea freight division of the Toll Global Express group, which ran a shipping service between Tasmania and the mainland. But in September this year, Toll Shipping adopted a new name and identity. Around the same time, Toll Global Express announced it would change its name to Team Global Express, officially dropping the Toll branding.

In September last year, private equity company Allegro Funds acquired Toll Global Express from Japan Post, the parent company of Toll Group.

The most recent announcement in this timeline means Strait Link is now officially operating as an independent shipping company. Though no longer part of the Team Global Express brand, Strait Link is

still operating within Allegro’s portfolio of businesses. The company intends to continue its partnership with Team Global Express, which continues to provide endto-end supply chain services.

Strait Link is helmed by chief executive officer Gary Allen, who has a vision to transform the business and strengthen its roots as a vital link between Tasmania and the mainland.

STRAIT TO THE WORLD

Mr Allen said a career in the transport and logistics industry put Toll Shipping on his radar, and he recognised the potential to improve the business under Allegro’s ownership. He said the specialised nature of Strait Link’s services and the people behind it have helped shape his understanding of the company.

“Our purpose is pretty simple: linking Tasmania ‘strait’ to the world,” Mr Allen told DCN

“Our vision as an essential service provider is to support Tasmanian communities and the Tasmanian economy by providing superior, reliable service, utilising our critical infrastructure assets for our existing and new customers, and supporting sustainability and growth.”

Mr Allen has observed a strong emotional connection between employees and the company purpose. He said the Strait Link team is united and motivated by helping local businesses and the Tasmanian economy grow and by supporting local communities.

“I have an admiration and respect for all our operators, from stevedores and seafarers through to our transport operators and the amazing journey they go on every day to receive cargo, load cargo onto the vessels and distribute it at the other end,” he said.

Tasmania’s detachment from the mainland amplifies the role and

the dcn .com.au24  October 2022 IN DETAIL
The new Strait Link leadership team

recognition of seaborne trade for the island state. Mr Allen said Strait Link sees significant value in its relationship with the community, and vice versa.

“There’s no road between the mainland and Tasmania, so a reliable and sustainable service for the vessels to take cargo across Bass Strait and back every day is incredibly important,” he said.

“If we stop, then products don’t get into Tasmania, and they don’t come out of Tasmania. It’s as simple as that – the economy would grind to a halt. We’re incredibly proud of the important role we play for local communities and the state.”

Strait Link currently has two ships running between Burnie and Melbourne six nights each week. Tasmanian Achiever II and Victorian Reliance II are Australia-flagged ro-ro cargo vessels measuring 210 metres LOA. Each vessel has a 700 TEU capacity and room for 70 trailers and 70 cars.

Mr Allen said the ships cover around 221 nautical miles per sailing between Tasmania and Victoria, equating to around 136,000 nautical miles each year.

PORT ENGAGEMENT

Strait Link also has a relationship with TasPorts, which owns and operates Burnie Port. According to Mr Allen, Strait Link and TasPorts have a mutual interest in exploring opportunities for development of the infrastructure in Tasmania.

Strait Link also plans to engage with state and local government to explore opportunities for sustainable development over time. Strait Link shares a similar vision with Port of Melbourne, particularly around stakeholder engagement.

“Port of Melbourne has been very transparent in its port capacity

the local Burnie Ten run (a popular community event) and is looking to become more involved with state government initiatives.

“That will involve understanding road safety for the distribution component of our operations in Tasmania, understanding how we can help the Tasmanian economy grow by improving our port infrastructure, and working with TasPorts on its initiatives for development and enhancement of port infrastructure to enable us to bring more cargo in and support the community.”

LOOKING AHEAD

enhancement program in Victoria and the future 50-year plan for the development of the port infrastructure,” Mr Allen said.

“We’re a key stakeholder affected by that, so equally we’re looking for significant support from federal and state governments along with our supplier Port of Melbourne around what that sustainable future looks like, and to ensure the integrity of our essential service and our critical infrastructure assets.”

In terms of community contributions, Strait Link has started by supporting

Mr Allen said as Strait Link establishes itself in Tasmania, he plans to look into enhancements and improvements for the company’s terminal access and terminal throughput performance.

“My intention isn’t to go through radical change; it’s more around how we listen to our employees and customers and enhance the good work we do now in a sustainable manner, and how we evolve our systems, processes, activity on the vessels, activity in the ports, and how we do business generally.

“I want our business to be reliable, sustainable and easy to deal with.”

Strait Link the dcn .com.au 25October 2022
If we stop, then products don’t get into Tasmania, and they don’t come out of Tasmania. It’s as simple as that – the economy would grind to a halt.
The iconic Toll vessels are now run by Strait Link The new Strait Link logo

dilemma of the

After two years of conditions that have favoured direct services between Australia/New Zealand and the Mediterranean/North West Europe, the old bugbears are back, Dale Crisp reports

the dcn .com.au26  October 2022
Dale Crisp

Despite years of predictions to the contrary, Oceania shippers still have two direct services to/from Europe that have survived repeated attacks from price- and transit-threatening transhipment options: AES/NEMO, operated by Mediterranean Shipping Company and CMA CGM, via Suez, and PAD/NASP, provided by CMA CGM and junior partner Marfret, through Panama. (And herewith a reminder to readers that both direct services are really anything but direct: each comprises multiple segments that enable operators to fill and re-fill slots several times, without which such long, thin services could not be profitably maintained.)

Thus AES/NEMO sails southbound from NW Europe through the Mediterranean and Suez Canal to Indian Ocean islands, before continuing to Sydney thence east to west through Australian ports and on to Singapore, the Indian subcontinent, Middle East, Mediterranean and back to the UK/ NWW Europe.

Full pro-forma rotation is London Gateway, Rotterdam, Hamburg, Antwerp, Le Havre, Fos Sur Mer, La Spezia, Gioia Tauro, Malta, Genoa, Suez, Damietta, Pointe des Galets, Port Louis, Sydney, Melbourne, Adelaide, Fremantle, Singapore, Colombo, Suez Canal, Malta, Gioia Tauro, Valencia, London Gateway.

the dcn .com.au 27October 2022
CMA CGM’s APL Phoenix at VICT, Webb Dock, Melbourne
LINER TRADES TO EUROPE

The MSC-operated Le Havre and Pusan C are currently the largest AES/NEMO vessels at 9572 TEU

Current schedules show previous regulars including Piraeus, Genoa, Port Said and Damietta are not being called and there is some shuffling of NW Europe calls, presumably to manage congestion delays.

Fourteen ships, ranging from the 7943-TEU MSC Archimidis to the 9572-TEU Le Havre and Pusan C

undertake the 98-day round trip. CMA CGM presently provides five and MSC nine but in October a 15th ship will join AES/NEMO, the 10,926-TEU CMA CGM Estelle, which will become the largest container ship by nominal container capacity to serve Australia. The partners say this will aid schedule integrity and cut the number of port omissions.

PAD/NASP leaves the UK/Europe and crosses the Atlantic to East Coast North America, then through Central America/Panama Canal to Tahiti and New Caledonia, thence Australia’s east coast north to south before crossing to Tauranga and back through Panama, up the USEC and over the Atlantic to UK/Europe. For this service the pro-forma rotation is Zeebrugge, Rotterdam London Gateway, Dunkerque, Le Havre, New York, Savannah, Kingston, Panama Canal, Papeete, Noumea, Brisbane, Sydney, Melbourne, Tauranga, Manzanillo (Panama), Panama Canal, Savannah, Philadelphia, Zeebrugge. Zeebrugge calls are closely linked to NZ kiwifruit and apple exports; during South America’s mango season the service this year is also calling at Paita, Peru northbound/ eastbound, between late October and early January.

PAD/NASP requires 13 ships for its weekly frequency, providing a 91-day round voyage. All geared vessels these range from the 2257-TEU Seatrade Blue and four sisters to the 2506-TEU Marius (Marfret’s sole contribution) and three sisters. All have at least 500 reefer plugs.

VOLUMES AND RATES

According to London-based Container Trade Statistics (noting the usual proviso that CTS figures are often subject to later revision) first half calendar year 2022 southbound trade between Europe and Oceania was down 5.5% to 358,100 TEU, compared with 378,800 TEU for 1H21 and 331,900 1H20.

the dcn .com.au28  October 2022 LINER TRADES TO EUROPE
Dale Crisp
We have to remember though, those rates are dropping from historical highs, so it certainly won’t be panic stations for the carriers just yet. Peter Sands, Xeneta

Northbound the fall was a more palatable 1.1% to 97,100 TEU, compared with 98,500 in 2020 and 104,900 in 2020.

All-in freight rates showed a steady if modest decline southbound April through June 2022, while northbound the trend was reversed, albeit again by small increments.

Comparing July 2022 to July 2021 (latest available at time of writing), southbound volumes fell by 7.8% while northbound was down by 2.3%.

The key to understanding both direct services is the realisation that the amount of European cargo carried all the way on both is overshadowed by volumes on the intermediate legs, with the exception of southbound AES/NEMO.

Thus that service northbound – currently reported to be full ex Australia for several weeks – is bolstered by cargo (such as seasonal grains) moving through the SE Asian and ISC hub port calls, while PAD/ NASP southbound has strong and enduring liftings to the South Pacific, with northbound underpinned by seasonal fruit, and meat, to ECNA and Europe. The trans-Atlantic and ECNA-ANZ-ECNA legs are also important.

But large amounts of European cargo move by transhipment, over SE Asian and to a lesser extent Central American hubs. It is very difficult to establish an accurate measure of the mix.

For the last couple of COVID-19 years both direct services have been doing well. Liftings have been strong and carriers have had considerable success in obtaining “premium” rates for what are “premium” services for those shippers preferring/demanding their cargo stays on the same ship from origin to destination, i.e. not subject to transhipment.

Both services have concentrated on maintaining, as far as possible, weekly frequency. But this has only been achieved through port omissions at each end of the services: for AES/NEMO this has been more common in Europe and the Med than in Australia, while for PAD/NASP it has been Sydney and Melbourne that often miss out, especially as the partners strive to meet Zespri export dates in Tauranga (though with the kiwifruit season ending, even Tauranga is slated for an omission). At the European end London Gateway calls have been the most common casualty.

As an executive commented, “When we’re forced to drop calls and tranship, even locally, when is a direct service a direct service? Omissions are making it tough … and the raison d’etre for premiums evaporates.”

Another agreed: “It’s challenging. We can’t argue that [competing] transhipment alternatives risk delays in wayports when we’re feeding cargo between ports all over the place.”

Those port skips can be fundamentally attributed to congestion, caused by the now well-understood COVID boom in consumption that’s constipated supply chains worldwide and, more recently, industrial action in

European and UK ports. While AES/NEMO and PAD/ NASP calls have not necessarily been affected by the latter the need to divert other services and volumes has clogged the system even further.

SPOT RATES

Analyst Xeneta has been reporting constant and accelerating falls in spot rates between Asia and Europe and Asia and the Mediterranean since May.

As this was being written, mid-September, AsiaEurope was down another 14% in a week and AsiaMediterranean 10%. Rates were at their lowest level since April 2021.

Carriers’ plans to withdraw capacity in an effort to halt the slide in what has turned out to be a nonpeak peak, were gathering momentum, but that could only achieve so much if service structures were to be maintained.

“We have to remember though, those rates are dropping from historical highs, so it certainly won’t be panic stations for the carriers just yet,” Xeneta’s Peter Sands said. But he also saw little prospect of demand returning, with demand falling 4% year-on-year between Asia and North Europe.

Why is this important?

As readers might have sussed by now, falling rates and volumes on the main east-west trade lanes means transhipment operators to/from Australia become far more aggressive players. MSC and CMA CGM have good reasons not to undercut their own direct services but that leaves at least a dozen other big-timers ready and willing to do so; the only constraint may be the availability of space on first/last leg through SE Asia.

East-west rates have been spectacularly high and space very tight, which has protected the direct services. But the cold, hard truth is that transhipment alternatives are very often faster and rates are now down to well within range of those charged by AES/ NEMO and PAD/NASP. History tells us once AsiaEurope goes soft carriers will fire up the volume

The two-island, scrubber-fitted MSC Amalfi recently joined AES/NEMO

the dcn .com.au 29October 2022

vacuum to suck up any cargo they can find to fill expensive, large ships.

Ironically, MSC and CMA CGM are now better placed to reinforce the performance of the direct services because tonnage availability has improved and charter rates are falling – in some cases by as much as half.

Hence AES/NEMO’s addition of a 15th ship. And, more significantly, the decision to maintain PAD/ NASP at weekly frequency all-year-round, rather than drop back to fortnightly October-March.

An insider, asked whether the weekly maintenance is a service improvement or a make-good for shippers

angered by space shortages and port culls, confesses “a bit of both”.

“We expect to be able to clear some backlogs and hopefully repair some relationships,” he said. “But we’re still facing equipment shortages, thanks to quarantine delays in Australia, and no sooner does one congestion hot-spot cool down than another one appears – such as is now happening on the US East Coast as a consequence of cargo diverting from the West Coast traffic jams. Collateral damage for European boxes.”

The change has been well-received by customers, he confirmed.

Maintaining weekly frequency aids marketing consistency and also ensures access to the required, high reefer capacity, geared tonnage in the preferred PAD/NASP size range. Nevertheless, DCN understands the partners are discussing an increase in vessel size –to 2700-2800 TEU – in 2023, though they admit that might bring “challenges quayside” in the South Pacific.

There’s a lot of new, mostly large, tonnage due for delivery in the next three years and it’s unclear what impact the IMO’s 2023 CII regulatory changes to emission levels will have on existing tonnage, although lines are confident the current AES/NEMO and PAD/ NASP fleets will meet standards without having to slow down or be replaced.

For now carriers are demonstrating optimism about and the retention of the direct Europe services. But in container shipping things can change very rapidly and the old bogey of relay vultures is hovering.

A trade manager was so pleased with his summation from last year he offered it again: “I suspect the seas are going to be awash with ships, part-empty, taking us back to the bad old days of over-capacity. And we know what that means for our direct services, things turn to poo,” he said.

“There’s just a whiff and I don’t like it.”

the dcn .com.au30  October 2022
Southern Cross Maritime Services; Dale Crisp
LINER TRADES TO EUROPE
We’re
still facing equipment shortages, thanks to quarantine delays in Australia, and no sooner does one congestion hotspot cool down than another one appears.
Seatrade White and sisters, plus reefer containers, were taken over by CMA CGM when Seatrade withdrew its Meridian service in 2018 CMA CGM Abu Dhabi was acquired by the French carrier last year for the
PAD
service
the dcn .com.au32  October 2022 Travel mania SUPPLY CHAIN & LOGISTICS

The Australian Logistics Council’s CEO, Dr Hermione Parsons, spoke to DCN about Australia’s supply chains in the “mid-pandemic era”

The is time

While COVID highlighted the importance of supply chains to the Australian economy, the focus has now turned to building capacity and securing the future of freight in what the Prime Minister is referring to as the “mid-pandemic era”.

According to the new head of the Australian Logistics Council Dr Hermione Parsons, it’s an interesting change of language.

“It is interesting how things have moved around, it is important we build our capacity and consider the impacts of future disruption,” she told Daily Cargo News.

“We can control some things as a country, we can control land side operations, regulation, land planning, we can control elements of the supply chain.

“What we can’t control are global shipping lines, geopolitical tensions, international airlines and freight capacity.”

the dcn .com.au 33October 2022
NOW

Appointed in July, Dr Parsons is well positioned to advocate for supply chain operators and cargo owners in a time of rapid change, coming from her directorship of the former supply chain think tank at Deakin University, the Centre for Supply Chain and Logistics. She is also co-founder of Wayfinder, an initiative focused on increasing female participation and diversity in the supply chain workforce.

The ALC sits at the centre of the national discussion, representing the interests of infrastructure owners and operators such as port and freight terminals, transport businesses and service providers right through to those who rely on the movement of goods such as retailers and manufacturers.

ALC’S FOCUS

Dr Parsons said the ALC’s primary objective is to build on the work of ALC and member companies during COVID.

Essentially, this means fostering engagement between industry and government, and advocating on critical issues to supply chain.

“A real focus is to help government to understand the complexity of the supply chain, particularly at this period of our lives with disruption, increasing demand and change,” Dr Parsons said.

“The main focus for our members is to ensure we have the right infrastructure in place. That is physical infrastructure, technology and of course, the workforce.

“It is important to note that ESG (environmental, social, and corporate governance) is an incredibly important topic at the forefront of every leaders mind, in this new era,” she said.

“We can use that to our advantage, build stronger supply chains and drive competitiveness.”

Dr Parsons said it is clear that workforce issues remain current, as a “short, medium and long term challenge for us all”.

“There are no quick fixes, despite the important measures coming. It is an important one for the ALC.”

UNDERSTANDING COMPLEXITIES

One ALC mantra is taking a “system-wide approach” to improving planning, reducing regulatory impost and better informing investment priorities.

“This is an ongoing challenge,” Dr Parsons said. “The ALC understands the complexity of supply chain and the interdependency of each point in the supply chain.

“ALC members get it – we work it each day – you can’t look at one facet of a chain and deliver overall improvement.

“We need to understand the interdependency between transport and logistics. Between modes, of getting freight off a ship, into port, out via rail or road and into warehouses and between businesses.”

She believes the ALC has played a crucial role in identifying and helping Australian policy makers “join the dots” in improving regulation, such as urban planning.

Two key pieces of work in which the ALC played a role, were the National Freight and Supply Chain Strategy (NFSCS) and National Urban Freight Planning Principles (NUFPP).

ALC members were also closely aligned to government during COVID to keep moving through the critical issues arising.

“We have developed strong relationships at all levels, we are leveraging that as we go ahead, staying close to find the right solutions for our country and economy,” Dr Parsons.

“Recently, we released a comprehensive briefing that provides government with a sustainable pathway for the supply chain.

Most ALC members are involved in the Wayfinder program since its inception in 2016 and collaborate to attract a bigger, better, stronger workforce.

“A workforce that is diversified, skilled and capable to deliver our supply chain. After all, without a supply chain workforce nothing moves,” Dr Parsons said.

The ALC’s focus on technology remains, as a mean to improve efficiency and productivity in domestic capability.

“Pre-COVID, industry was hit by a big number of factors, including industry 4.0, that was reshaping the sector, with automatic, robotics, data and analytics, which is critical to achieving greater efficiency and optimising supply chains,” Dr Parsons said, adding that digital capability also leads to more sustainable outcomes.

“We expect disruption going forward and we are working with members and helping to inform government about the need to plan for that, to mitigate risks and to use all the tools at our disposal, such as multimodal transport and working to ensure the right mode for the right freight.”

ALC is capturing the lessons learned through its members who have been at the face of the COVID supply response.

“Those at the coalface know what worked, what didn’t and what we can do better,” Dr Parsons said.

NEW SPEED, NEW URGENCY

So far, so good is the out-take from conversations at the Commonwealth level, with a focus on collaboration.

“Working with industry is to learn from industry and so far we have seen collaboration,” Dr Parsons said.

the dcn .com.au34  October 2022 SUPPLY CHAIN & LOGISTICS
ALC
ALC members get it – we work it each day – you can’t look at one facet of a chain and deliver overall improvement.
IFC’s full solution approach to supply chain management services differentiates from many providers in the industry. Our consultative and customised approach ensures the supply chain modelling uniquely fits the needs of each business to minimise costs and overall time to market for customers. Delivering first-class supply chain solutions for over 30 years www.ifc.com.au GLOBAL LOGISTICS & WAREHOUSING Winner of International Supply Chain Award - ASCLA Awards Winner of Supply Chain Innovation & Technology Award - DCN, Shipping & Maritime Industry Awards Winner of Freight Transport SolutionMHD, Mercury Awards IFC Global Logistics and Warehousing are Australia’s trusted provider of international supply chain solutions

“Importantly, we must ensure that we do not get bogged down and that we see action, in this era we need a new speed and new urgency.

“Pre-pandemic, we had the luxury of time to consider and develop policy and could allow more time before implementation. We are in a position now, where the world and supply chains have changed and we no longer have such a luxury,” she said.

The skills and labour crunch is forcing the industry to address the critical issues and long-term challenges it had been avoiding, Dr Parsons said.

“Without a workforce, freight will not move, shelves will be empty and product won’t get to where it needs to be.”

The ALC hopes the recent jobs and skills summit delivers real reform in training, in population policy and support for industry-led initiatives that improve wellbeing and diversify freight logistics.

strategy up to date given events that have occurred in the relatively short period since its release.

“In terms of direction, the NFSCS is right, but we need to act quickly, we need governments implementing the action plan.”

AIR CARGO CAPACITY

While the International Freight Assistance Mechanism has come to an end, the ALC argues that aviation has not recovered to pre-COVID levels which remains a concern given Australia utilises air cargo for highvalue exports and imports such as medicines.

“The reality is, air transport relies on passengers and the priority goes to passenger movements,” Dr Parsons said.

“It seems fewer airlines are interested in air cargo and less so than we would hope. But air freight remains a critical mode and an important piece of the supply chain.

“It is a concern that as an island nation that we have not seen a quick recovery in air cargo capacity to pre-COVID levels.”

Dr Parsons believes it comes back to our lack of resilience. “We need to look at this, we have no control over some aspects of the supply chain and this leaves gaps. But we can do more?”

The ALC has been advocating for the introduction of a road user charge as a sustainable funding source for land transport infrastructure

The reasoning is that as the uptake of alternative fuelled vehicles increases, there will be a decline in the fuel excise.

“We need a nationally consistent approach, to reduce state-by-state regulation and it must apply to all vehicles classes and types,” according to Dr Parsons.

The ALC also wants a review of the NFSCS to include learnings from COVID and recent natural disasters.

“Time is of the essence,” Dr Parsons said. “Each year we have a progress update and we know there are gaps.

She believes there is an opportunity to bring the

MOVING FORWARD

The ALC has its technology summit taking place on 15 September, where it plans to tackle some “critical issues” for the industry.

It also has a significant engagement with government later this year, bringing together senior leaders.

“We will put on the agenda the key issues that are absolutely fundamental to the success of our supply chain,” Dr Parsons said.

In 2023 ALC looks forward to putting its annual conference back into the spotlight, building on the success of Forum 2022.

“We want a bigger and better 2023, as we continue to emerge from a pandemic and face the coming freight task,” Dr Parsons said.

the dcn .com.au36  October 2022 SUPPLY CHAIN & LOGISTICS
What we can’t control are global shipping lines, geopolitical tensions, international airlines and freight capacity.

Direct benefits

IFC Global Logistics and Warehousing’s Angelo Markovsky spoke to Daily Cargo News about how the company’s Direct to Store model is improving supply chain performance

You were awarded at the 2021 Shipping & Maritime Industry Awards for your innovation. Why was your company singled out for this? We invest in technology, sound processes, people, and our partners to deliver solutions such as IFC’s innovative Direct to Store model. IFC devised the model to provide a fast-paced, efficient supply chain system, which was critical in 2020 when the COVID pandemic drastically impacted Chinese production facilities.

The transition to this solution resulted in establishing a regular flow of stock to stores and a 25% reduction in logistic costs. As a result of shifting from a just in time inventory model, production lead times were vastly improved as goods were delivered to the distribution centre three months in advance.

Can you tell us more about the background to your Direct to Store model?

Originally, our client Total Tools had plans to set up a central distribution centre to fulfil its national footprint. However, their products are bulky, the cost of interstate transfers is high, and the volumes were not large enough to fill containers to ship directly to multiple ports around Australia.

The concept was scoped out to consolidate cargo FCL containers and ship only to primary DCs based in Melbourne, Brisbane and Fremantle. Then the cost challenges of interstate transfers to service other states such as Adelaide, Sydney and Far North Queensland were forecast to be very expensive, given the cubic sizes of their product range. As their service provider, they sought our advice to provide a solution.

We worked with our China partner to establish ILM, a new business dedicated to providing 3PL consolidated services in Shanghai. IFC operates the entire warehouse management system and processes.

At this point, the concept of the Direct to Store model was born, and IFC proposed a solution that

would benefit Total Tools in a number of ways. It enabled inventory to be centralised and better quality control at the point of origin.

The solution also improved Total Tools’ speed to market, as goods arriving would be cross-docked and transported to store the next day.

Cost savings were achieved as the Direct to Store model relied on utilising Australian ports, so the requirement for interstate line haul was eliminated.

Today IFC is partnering with several leading retailers performing direct to store ex China to Australia in the category of toys, apparel, consumable goods and appliances.

How have you been able to assist customers in navigating the issues in global shipping such as limited capacity and congestion?

This has been challenging. Having stock picked and readily available from a centralised DC, with forecast delivery plans (which are provided in our WMS), has enabled us to plan better, mitigating capacity issues and congestion, as we used multiple carrier services under contract to ship product early to meet customers’ timeframes.

Controlling the inventory at the origin helped us significantly as we had more control to plan to carriers’ capacity, which serviced us well through the COVID pandemic.

Is your Direct to Store model something you will be continuing as the effects of the global pandemic recede?

The Direct to Store model is a part of our business today. With labour shortages driving local 3PL providers’ costs up, it’s fair to say the Direct to Store model has a bright future. Given its proven concept, there’s no doubt we will continue to invest. We have plans to execute the same model elsewhere.

BENEFITS OF THE DIRECT TO STORE MODEL

• Centralise all inventory in the one origin hub.

• Provide value-added services such as pick and pack by store, by destination.

multi-store processed pallets, and cartons to Australian ports ex China.

• All goods are processed as picked to store from the origin distribution centre, ready to be shipped to the closest port of the last miles, whereby containers are cross-docked and delivered to the store.

the dcn .com.au 37October 2022  IFC
• Ship
IFC’s system enables inventory to be centralised

Act local, think global

The logistics arm of shipping giant CMA CGM Group, Ceva Logistics, was recently recognised for its emissions reduction efforts in the region, Paula Wallace writes

Ceva Logistics was a finalist in the latest DCN Shipping & Maritime Industry Awards for its actions to reduce its carbon footprint including greener warehousing, electrical vehicles and alternative fuels in air and ocean transport.

Ceva Logistics managing director for Australia and New Zealand Milton Pimenta told Daily Cargo News,

“As part of the CMA CGM Group, Ceva Logistics is strongly committed to the protection of the environment”.

The CMA CGM Group has a stated goal to become net zero by 2050.

In 2021, Ceva became a founding member of the United Airlines Eco-Skies Alliance to promote the use of sustainable aviation fuel in flights.

“We are exploring similar programs with other carriers. We also provide customers with other alternative fuel options in various modes of transport including biofuel, LNG and biomethane,” Mr Pimenta said.

Ceva is steadily adding electric vehicles to its last-mile fleets around the world and is working with vehicle manufacturers to pilot and test new electric vehicles in logistics applications.

“For example, in Singapore, we use a fleet of electric vehicles to deliver products for a leading sporting goods retailer. We also employ a similar electric fleet in Thailand in support of this same customer,” Mr Pimenta said.

Ceva not only measures its own environmental gains, but assists customers in measuring their own logistics carbon footprint.

“The Ceva Eco-Calculator is a digital tool that allows our customers to estimate the carbon footprint of their shipments via ocean, air or ground. By simply adding shipment information online, our tool provides an estimate of carbon emission,” Mr Pimenta said.

“Our local teams around the world are committed to sustainability as well. For example, our warehouses in Benelux already produce more energy than they consume, using solar panels, wind power, LED technology and efficient equipment.”

In 2021, Ceva increased the use of renewable energy at its warehouses by 40%.

For assessing the performance of its facilities in Australia and New Zealand, Ceva uses the Green Building Council of Australia Green Star rating tool. Four Ceva facilities have attained a six-star rating with the tool. This indicates world-class leadership, according to the company. Four other facilities have received five-star ratings.

Across Australia and New Zealand, the sustainability efforts of Ceva Logistics are estimated to reduce annual emissions by 4300 tonnes of carbon dioxide equivalent every year.

“In the near term, we are working toward 100% LED lighting at our facilities and to multiply by three our solar panel capacity,” Mr Pimenta said.

“Our aim is to produce as much carbon neutral energy as our overall consumption by 2025.

“We will continue exploring better ways of delivering our logistics solutions across the global supply chain,” Mr Pimenta said.

MEGA FUND FOR ENERGY TRANSITION

The CMA CGM Group announced it is creating a Special Fund for Energies , backed by a five-year, US$1.5-billion budget, to accelerate its energy transition and achieve net-zero carbon by 2050.

The fund will invest to support the industrial production of new fuels, as well as low-emission mobility solutions across the group’s business base (maritime, overland and air freight shipping; port and logistics services; offices).

It will help to support a global innovation platform developed alongside large corporations, SMEs, start-ups, and the academic and scientific community.

The fund will have four focuses as follows:

• supporting the development and production of renewable fuels;

• accelerating the decarbonisation of port terminals, warehouses and truck fleets;

• supporting, trialling and launching projects at the cutting edge of innovation; and

• pursuing energy savings and improving the energy efficiency of CMA CGM employee working methods and daily mobility. CMA CGM

the dcn .com.au38  October 2022 SUPPLY CHAIN & LOGISTICS

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Buildingbigger for freight

The Victorian government has implemented broad reform in the way it managed the state’s freight task, and the state’s major trade gateway is gearing up for a busy – and bigger – future, Ian Ackerman writes

THE Victorian ports and freight sector is in the midst of a major change in the way government interacts with industry. This is in addition to significant developments in logistics infrastructure both ongoing and in the planning phases.

GOVERNMENT SHIFT

In May the Victorian Parliament passed the Transport Legislation Amendment (Port Reforms and Other Matters) Bill 2022 into law. The bill forms the state government’s response to the Independent Review of the Victorian Ports System. In August last year, the government said it supported all 63 recommendations handed down in the review.

Before passing the legislation, the government already acted on several of the recommendations, including establishing Ports Victoria by amalgamating the Victorian Regional Channels Authority and the Victorian Ports Corporation (Melbourne).

Port of Melbourne

the dcn .com.au40  October 2022
VICTORIA
the dcn .com.au 41October 2022
Webb Dock, with works underway to remove the knuckle on the eastern quay

State minister for ports and freight Melissa Horne said the changes in the bill would make Victoria’s port system more efficient, adaptable and ready to support growth and recovery.

“With freight volumes expected to more than double over the next 30 years, the safe and efficient operation of our ports is vital to Victoria’s economic growth and this bill is another significant step to improving the operation of our ports,” she said.

In her speech for the second reading of the bill, Ms Horne said: “The bill will embed the role and function of Ports Victoria in primary legislation and provide it with the tools it needs to implement improved co-ordination, resilience and agility in relation to the safe provision of essential port services.”

In addition to embedding Ports Victoria in legislation, the bill will change the organisation’s charter to promote and facilitate trade, undertake operational activities, and provide technical and consultancy services concerning the whole of the Victorian ports system.

AT THE PORT OF MELBOURNE

The Port of Melbourne, as the busiest container port in Australia (it handles about 3.2 million TEU a year) and an important gateway for all manner of cargo, is also working towards a future with even more trade.

laid over the past five years in transitioning to a new entity, adjusting to a new regulatory environment, and setting the strategy for the next thirty years.

“What has become apparent to us, even before the pandemic, is that the changing nature of the global vessels sizes to larger vessels has been realised and is continuing to happen more quickly than previously anticipated,” he said.

“Coupled with the need to meet future capacity, it’s important we deliver on our Port Development Strategy in a timely way. Supply-chain infrastructure has long lead times, so we need to plan now for the longer-term future.”

A PLAN FOR CAPACITY

Port of Melbourne has recently embarked on a program to increase capacity ahead of the expected increase in freight volumes and larger ships.

The Port Capacity Enhancement Program (PCEP) proposes to develop a new international container terminal at Webb Dock North. The plan would relocate the Tasmanian trades, which currently occupy the area, to Appleton and Victoria docks, just up the Yarra River from the container terminals at Swanson Dock.

Mr Cannon said the potential projects in PCEP are about developing a new international container terminal at Webb Dock North and providing a longterm future for our Tasmanian trade operators.

“These projects were flagged in our Port Development Strategy, which was released in 2020 after an extensive consultation and stakeholder engagement process,” he said.

According to the latest trade update from the port Melbourne’s total container throughput in August came to 284,487 TEU, an increase of 9.5% on the same month last year. Additionally, year-to-date container throughput volumes were up 6.5%.

Full overseas imports into the port were up 11.2% in August, compared with the same month last year. The port said trade was strong with the beginning of the traditional peak season.

The port also reported August’s Bass Strait full container trade (excluding transhipments) were up 7% on the same time in 2021. And full container transhipments were up 2.8% in the same period.

Additionally, motor vehicle imports into the port of Melbourne in August were up 25.6% on the same month last year (an increase of 8531 units).

Since being privatised in 2016, the port has embarked on a program of planning, looking to ensure the port is fit for a busier future.

Port of Melbourne CEO Saul Cannon has been in the role for nearly a year. He said over this time, the port has been building on the foundations it has

“There are several factors that have led us to a proposed international container terminal at Webb Dock North. The ability to meet future capacity is paramount, as are accommodating larger vessels. The ability to moor these vessels concurrently and geographical constraints are also in the mix of considerations. The Tasmanian terminals are proposed to be relocated to Victoria and Appleton docks.

Mr Cannon said this would be a major change, but in developing the Port Development Strategy, other scenarios were tested and they were unsuitable.

“Ultimately our stewardship obligations underpin all our planning and investment processes and we are obliged to develop the port land and infrastructure to cater for actual and reasonably anticipated growth in, and demand for, port services,” he said.

As part of the PCEP, the port commissioned three independent reports covering port capacity, ship fleet forecast, and demand forecast.

“The main takeaways from the reports are that the most recent capacity estimates are consistent with several previous studies; that the frequencies of big ship (8000-12,000-plus TEU) will increase in the future as shipping lines seek to optimise sea freight efficiencies; and that international container volumes will grow from currently around 3 million TEU to around 6.5 million TEU in 2052,” Mr Cannon said.

the dcn .com.au42  October 2022 VICTORIA
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“Our current focus is to engage with our stakeholders and to seek feedback on the key drivers of capacity. We will work closely with our experts to analyse the feedback and use that to inform our cost-benefit analysis. We will be going back out to our stakeholders again between December 2022 and March 2023 to seek feedback on the emerging findings from the cost-benefit analysis.”

Mr Cannon said Port of Melbourne’s Port Rail Transformation Project is also well underway. It involves the development of a rail terminal adjacent to the container terminal at Swanson Dock East, new common operator infrastructure and a new operating framework that commenced on 1 June 2020.

“Not only does the project support a future metropolitan freight rail network, it is part of our sustainability strategy. The shift to rail has considerable environmental benefits and is one way we can reduce emissions per TEU,” he said.

KNUCKLE REMOVAL

And the port’s Webb Dock East Extension Project commenced this year. This is to restore Webb Dock East to a two-berth terminal by removing a knuckle.

The project involves the demolition of the concrete structure, removal of old piles and installation of new piles to support the extended quay line.

Tim Vancampen, CEO of Victoria International Container Terminal, which operates at Webb Dock East, said the project was being carried out in a partnership between Port of Melbourne and VICT.

“VICT and our parent company, International Container Terminal Services, has committed $235 million investment into the port in order to restore the loss capacity as a result of the restrictive knuckle and the increase in vessel size over the last five years,” he said.

“The extended quayline of 71 metres will be supported by additional two ship-to-shore quay cranes, six auto container carriers (which have already been delivered and commissioned) and six auto stacking cranes, which will create a further three stacking blocks within our yard.”

Mr Vancampen said this first part of the investment will be online in November 2023 and will allow VICT to accommodate the 18,000 TEU size vessels.

“When required, VICT will further commission one more ship-to-shore quay cranes bringing the total

to eight units, four auto container carriers that will bring the total to twenty units and four auto stacking cranes, bringing the total to thirty units equalling to fifteen blocks.”

A RESILIENT SUPPLY CHAIN

The unpredictability of the past several years has brought into focus the resilience of the links in the Australian supply chain – and the ports and stevedoring sectors have kept pace.

Mr Vancampen said during the pandemic, ports continued to work to keep the economy going, transport and warehouse employees did the same to keep the shelves of the supermarkets full.

“Overall the supply chain adapted to ensure we complied with the rules and regulations while continuing to carry out our activities,” he said.

“VICT, like all other businesses within the economy, also felt the shockwaves during the COVID pandemic where we experienced close contract isolation requirements and in order to combat the potential threat, we implemented rapid antigen testing for all employees, visitors and contractors every time they entered the terminal to ensure we can capture any positive cases at the gate and ensure we provide a safe working environment for our employees, seafarers and transport providers who enter our terminal,” he said.

“Currently as the rest of the world continues to be impacted by COVID that has caused congestion, we are experiencing vessels arriving off window and so far, we’ve been able to work with our shipping line customers to change rotation, adjust speed in order to ensure minimal to no congestion at our terminal.”

Port of Melbourne’s Mr Cannon said for him, the key reflection on the experience of the past few years was about how dependent we all are on the supply chain.

“There have been all sorts of factors and flow-on effects over that whole period, whether it’s the factory shutdowns in China because of the COVID zero approach and the West Coast of the US, with the big ship queues, all of those things can have flow-on impacts and all of this can lead to supply-chain impacts and disruptions,” he said.

“Industry has shown some pretty remarkable resilience in the face of all of those impacts over all those years. Hopefully we’re settling into a more settled period now.”

the dcn .com.au44  October 2022 VICTORIA Ian Ackerman
Victoria International Container Terminal
the dcn .com.au46  October 2022 MARITIME ENGINEERING & SALVAGE
Barge Cali removing wreck of Kea Trader

Bad weather, allisions, wrecks and a handful of close calls throughout the year put salvage operations on everyone’s radar. Though some maritime incidents have been big enough to dominate a news feed, the calculated and often discreet nature of salvage means the work behind an operation is usually underappreciated. Sometimes, it isn’t seen at all.

Even as bulk carrier Portland Bay inched toward the New South Wales coast in July after losing power, salvors were positioned inside the ship working with the crew to help bring the casualty under control. Others were on the phone with tug masters as the incident unfolded.

Salvage and emergency response service United Salvage was asked by tug company Engage Marine to assist with supporting the crew and assist Portland Bay while it was in distress.

But United Salvage managing director Drew Shannon told DCN the work of a salvor covers not only the immediate danger and consequences of maritime emergencies, but also a range of abnormal maritime situations that need some form of attendance or support. He said in the salvage world, nothing is normal.

“We take things that are abnormal and return them back to where they were, but there is no such thing as normal. ‘Normal’ is a setting on a washing machine.”

Despite an intrinsic link between shipping and salvage, Mr Shannon said he believes the work of salvors isn’t always understood by the maritime industry. He said salvors are part of the solution, not the problem. They work to minimise the cost, delay and disruption to an owner’s operations.

“The first thing is to dispel the myths and rumours about salvors being trophy hunters amongst other folklore,” he said.

“We are professionals who, despite the situation we sometimes face, abide by laws and regulations including workplace health and safety regulations and environment protection.

the dcn .com.au 47October 2022  Roger King
Salvage and wreck removal operations are inevitably influenced by weather and shipping patterns, which made 2022 a particularly eventful year for the industry, Abby Williams writes

“Owners and insurers do not have to fear picking up the phone before an incident is out of control. We are here to help, and work collaboratively with all to find the best outcomes to take the abnormal back to standard operations.”

TWO SUNKEN TUGBOATS

Another unexpected situation occurred in January this year when cement carrier Goliath allided with two berthed tugboats in Tasmania’s Port of Devonport. York Cove and Campbell Cove spent the good part of 2022 at the bottom of the Mersey River as United Salvage (among other parties) worked to recover them.

The tug wrecks were lifted from the port river in August, after seven challenging months and a massive team effort involving more than 100 people. Mr Shannon said removing the wrecks was complex because, for a start, there were two of them.

“Whatever you did once, you had to do it twice,” he said, noting that the Mersey River also has a large tidal range and very strong currents.

“Whether it’s oil in the water, managing divers in the water, that added complexity to controlling what was coming out of the tugs when we were trying to remove the fuel.”

Mr Shannon said even on the days the tugs were being lifted out of the water, the port was still operating as normal, meaning salvors had to carry out their work without interfering with the shipping schedule, as they had been doing for several months.

“Every day there’s a ship wanting to put its bow somewhere near where the tugs are, so we’d talk almost every few hours to vessel traffic control to know when ships would move and when we’d have divers out of the water or in the water, so we weren’t conflicting with each other.

“Devonport is the main artery of Tasmania when it comes to shipping and trade. To shut down Devonport, you’re really hurting the state of Tasmania.”

Mr Shannon said United Salvage was working tightly with TasPorts so as to not impede commerce during the wreck removal.

“We never stopped. Someone was working somewhere every day on that project. I’ve always viewed it from the way I was taught by my mentors: once you’re on the salvage job, regardless of what it is, it’s an accident in progress. It never stops until you remove it.

“Until those tugs were taken out of the water and out of the port, they continued to be a salvage job. Every day was a Monday.”

THE HEAVY LIFT

Once the tug wrecks were pulled from the river – a task which proved extremely difficult – they were welded onto specially designed cradles on heavy lift ship AAL Melbourne.

The wreck removal project marked the first time AAL had been involved in a major salvage operation

the dcn .com.au48  October 2022 MARITIME ENGINEERING & SALVAGE
Drew Shannon
Once you’re on the salvage job, regardless of what it is, it’s an accident in progress. It never stops until you remove it.
Drew Shannon, managing director, United Salvage A TasPorts tug wreck is pulled from the Mersey River

in Australia. Frank Mueller, general manager of AAL Australia, told DCN the multipurpose shipping operator encountered its own operational challenges in the Devonport wreck removal task.

“The Port of Devonport is … on the Mersey River with only a very small swing basin,” Mr Mueller said.

“The location of the sunken tugs did not allow us any flexibility on where we can position the AAL Melbourne. There was one spot and one spot only. We had to consider the heavy traffic in the port with the ferries from the mainland arriving and departing multiple times a day, every day.”

Mr Mueller said Devonport is also heavily affected by rain and additional water flowing through the Mersey River during and after heavy rainfall inland.

“The river current or increase of the river current during a delicate and accurate operation like this, also had to be considered and the operation had to be interrupted and delayed several times due to weather.”

AAL Melbourne departed Devonport in August and commenced its voyage to Brisbane where the wrecks would be scrapped.

ANOTHER DIMENSION OF SHIPPING

AAL Australia’s Mr Mueller said recent salvage and wreck removal operations, such as the removal of York

Cove and Campbell Cove, have demonstrated the role heavy lift vessels play in keeping shipping lanes open, particularly where a wreck is obstructing a waterway.

However, over the past two years, the Australian multipurpose and project heavy lift shipping sector has been severely impacted by port congestion – as the entire industry has – but has observed an imbalance in wait times as these specialised ships are de-prioritised “in the name of port efficiency”.

In some cases, according to Mr Mueller, multipurpose vessels and heavy lift ships are often considered to be blocking the port.

“Over recent years ports all over the world and in Australia have focused on containers and ro-ro [vessels], mainly because both means of shipping are not impacted by weather and their turn around time can be clearly predicted and productivity calculated,” he said.

“At the same time, container operators are selling themselves as the solution to every shipping problem and are actively trying to play a bigger part in project and heavy lift cargo.

“Similarly, ro-ro carriers that move all different goods on trailers, not just mobile cargo. What the recent months, and even more so this salvage example, demonstrate is that these statements are not true.”

Mr Mueller said there are valid reasons to move certain cargoes in containers or on ro-ro vessels, but there are things only heavy lift and multi-purpose vessels can do.

“Yes, these vessels are often slower in discharge, their discharge may be impacted by weather, the cargo may be dirtier and operations may be noisier, but once people, also those from outside the industry, look into this area, they are fascinated that there is more to shipping than containers.”

the dcn .com.au50  October 2022 MARITIME ENGINEERING & SALVAGE AAL; United Salvage
Frank Mueller, general manager, AAL Australia
We had to consider the heavy traffic in the port with the ferries from the mainland arriving and departing multiple times a day, every day.
The first tug emerges from the waters of the Mersey

UNITED SALVAGE

SERVICING AUSTRALIA AND THE SOUTH PACIFIC

The company’s head office and main warehouse facilities are located in a convenient and multi-user facility located near Port Kembla.

We have maintained our caches of equipment located in Port Hedland WA, Cairns and Mackay QLD.

From the company’s main warehouse, the United Salvage team is well poised to mobilise and respond in Australia and throughout the South Pacific.

We have recently been involved in projects such as the removal of wrecked tugs Campbell Cove and York Cove in Devonport TAS and the safe delivery of bulk carrier MV Portland Bay from turbulent waters off Sydney NSW.

Another recent project for the United Salvage team involved stabilising, relocating and securing the Ex HMAS Otama in the port of Hastings, Victoria.

We are well experienced in providing decommissioning services and support in Australasia. We have undertaken large scale projects in port and offshore that include;

• Removal of fire damaged jack up rigs from oil fields

• Fire damaged bulk carriers within port limits

Our experienced team responds at short notice to assist ship owners and their crews in a variety of circumstances. Our emergency salvage response services can include;

• Naval architecture

• Marine engineering towage

• Marine pollution

• Hazardous materials management

We maintain our Lloyds Register accredited training course for emergency towing crews as part of our wider scope of services.

UNITED SALVAGE

24 / 7 Response Centre +61 1800 864 725
32 Gloucester Blvd, Port Kembla NSW 2505 drew.shannon@unitedsalvage.com.au unitedsalvage.com.au

The wreck of Kea Trader

TMC Marine director Captain Roger King was on site as part of a rotation for the removal of the Kea Trader wreck in New Caledonia

In September 2021, and 1521 days from grounding on Récif Durand, New Caledonia, the operational phase of the wreck removal of the 2194 TEU containership Kea Trader was completed. Removing the containership proved to be the most complex and challenging wreck removal in Oceania since the 2011-2016 Rena project in New Zealand, which Roger also attended.

The 185-meter long 25,293mt Kea Trader was sailing from Papeete, French Polynesia to Noumea, New Caledonia, when she grounded on Récif Durand in July 2017. Récif Durand is 50 nautical miles from the nearest land of Maré Island (Nengone), and 120 nautical miles from Noumea. It is a flat-topped, shallow rock reef that never dries but over which waves from the South Pacific Ocean break almost constantly on a formation known locally as the “devil’s cauldron”.

The metocean conditions at Récif Durand are dominated by a confluence of long period swells radiating up through the Tasman Sea from the Southern Ocean and south-easterly, short period swells from the predominant trade winds, known locally as Alizé. The severe weather associated with Tropical Cyclones Gita (2018), Hola (2018) and Niran (2021) all resulted in the accelerated degradation of the wreck’s structural integrity.

New Caledonia is a partly autonomous overseas French Territory with its own congress and president. There is a strong cultural identity projected through the customary authority of the Kanak population. Remaining mindful of the project fundamentals of environmental protection, social and cultural factors remained key to the success of the project. The four-plus year project spanned three independence referendums and two national elections.

Surrounding New Caledonia is the third largest great barrier reef in the world, which is listed with UNESCO World Heritage site for its beauty, unique geography and exceptional marine diversity, in particular coral diversity. Récif Durand, however, is a flat limestone reef impacted by persistent wave shear but surrounded by coral growth on its deeper edges.

Following Kea Trader’s grounding, salvage personnel, craft and equipment mobilised from hubs in Asia, Europe and Australia, by Ardent (the initial salvor)

were engaged. Despite the endeavours by salvors, the vessel was unable to be salvaged due to a large ground reaction and degrading hull structure.

DE-RISKING THE WRECK

Environmental protection was prioritised by the de-risking of the wreck from the outset, with the removal of hydrocarbons, environmentally sensitive cargoes, containers, and the stripping of the ship of potential flotsam in that order.

One thousand cubic metres of heavy fuel oil was removed in the first month of the Kea Trader grounding. Concurrent to the de-risking operation, an international invitation to tender was issued to suitably experienced and resourced salvage companies to submit wreck removal methodologies and timelines for full wreck removal.

The Shanghai Salvage Company (SSC) was selected as the contractor and commenced mobilisation to site of monitoring vessels for their 35day, 4400-nautical mile voyage from Shanghai. With limited historical data or specific understanding of the wave magnification and refraction on the reef, SSC undertook detailed observations and an environmental analysis of the site. This data was incorporated into theoretical and model testing for the design and retrofitting of a specialist accommodation crane barge, Cali

Cali was built with a shallow draft and at 126 metres long and with a 32 metres beam, the craft was equipped with an 800-tonne SWL revolving crane, providing an imposing work platform for the project. The vessel had on-board accommodation for 100 salvage team and barge crew members.

SSC developed detailed work plans and a wreck removal methodology for Cali specifically designed to meet the unique challenges and characteristics of Récif Durand. Cali was moored at site using an eight-point anchor spread that incorporated synthetic lines and large mooring buoys in order to avoid contact with the surrounding environment. The offshore tug De Zhou and shallow water anchor handler Hua Ao towed and supported Cali

DEGRADATION AND RECOVERY

The wreck’s degradation over time (particularly by cyclones) meant that

much of the wreck was broken down into liftable pieces when operations commenced. A three-stage process was used to systematically remove the wreck.

Firstly, a 96-tonne grab bucket was attached to Cali’s 800-tonne crane for the removal of large, separated hull pieces. Secondly, where the wreck was more intact, the hull was sectioned into large pieces before those pieces were recovered with the grab, or in the case of the accommodation block, it was cut by salvors into large liftable sections. Thirdly, a high-powered magnet was deployed from a crawler crane to sweep and remove any recoverable small debris.

Single lifts of up to 190 tonnes were made with the largest voyage load being 2502 tonnes. The wreck was recovered over 14 operational voyages with discharge in Noumea at a specially created berth for steel recycling.

FINAL COMMENTS

SSC used precision position-fixing system with an electronic 50 x 50-metres, X-Y grid system overlaid onto an accurate reef bathymetric chartlet. This provided a mechanism for precision anchor laying, position referencing as well as facilitating a traffic light system to monitor the wreck removal with a grid going green when it was fully cleared.

A systematic analysis of the entire reef was undertaken at project’s end to ensure that all debris that could be technically and safely recovered had been removed. Many of the systems and techniques used at Récif Durand for systematic wreck removal were developed by TMC when clearing the Rena wreck site in New Zealand.

Overlapping the extreme site conditions and weather limited work opportunities were the logistical problems associated with distance, multiple languages, and of course the multitude of challenges associated with COVID-19 including travel restrictions and quarantining.

Roger’s final comment on the removal of Kea Trader from Récif Durand was that the project was a genuine 9/10 for difficulty (no snow or ice). That it was completed to the satisfaction of all stakeholders and with no injuries, whilst protecting the environment, demonstrates that TMC continues to be the go-to consultancy for salvage and wreck removals in Oceania.

the dcn .com.au52  October 2022 MARITIME ENGINEERING & SALVAGE
COMPLEX ISSUES DEMAND CONSIDERED RESPONSES tmcmarine.com

Salvage in Melanesia

Salvage in Melanesia comes with unique challenges. Local marine services company Pacific Towing explores the geographic and cultural factors that come into play when a vessel is in distress

Pacific Towing, Papua New Guinea’s largest marine services operator, is usually one of the first to assist when a vessel traversing Melanesian waters finds itself in distress, whether due to mechanical failure, grounding or hull damage. The company’s core business is harbour towage, but its services extend into salvage, emergency response, spill services and wreck retrieval.

PacTow general manager Neil Papenfus said the company has been involved in more than 70 salvage operations over the last 25 years. PacTow is the sole salvor in most operations, however it has also partnered with some of the largest salvage entities in the region under lead and co-salvor arrangements.

“Although we pride ourselves on being able to take care of just about any salvage in our region, we would require assistance with an oil tanker casualty, for example,” he said.

“This would be beyond our capacity as a sole salvor, but in this instance we would operate in a co-salvor capacity, and we’ve certainly got ample capacity to provide an effective and efficient first response to any sort of vessel in distress, irrespective of its size, type, or cargo.”

GEOGRAPHIC FACTORS

PacTow operations manager Daymon Pnematicatos said cyclones and considerable tidal surges are common in Melanesia and pose a risk to marine

traffic. He said Papua New Guinea also experiences high winds which can either hinder or assist managing vessel groundings.

“When trying to pull a casualty off a grounding area we often have to wait for the higher tides” Mr Pnematicatos said.

As the biodiversity of Melanesia’s marine environments is central to the cultural and commercial wellbeing of surrounding communities, PacTow also strives to minimise environmental damage during salvage operations.

PacTow’s lead commercial diver Vaburi Rea said locals who live around the coast rely heavily on the health of waterways to provide for their families.

“It is common for people to catch fish so that they have food on the table, as well as additional fish to sell at the market so that they have cash for essentials like medicine and education,” he said.

Oil spill response is critical for maintaining the health of these local waterways. PacTow provides oil spill response services in partnership with local authorities, including Papua New Guinea’s National Maritime Safety Authority.

SOCIO-CULTURAL CONSIDERATIONS

The connection between coastal communities and the marine environment means reef damage can result in compensation claims for loss of livelihood. Salvage operations can – and

have – been shut down by these types of claims.

Expert local knowledge and having a predominantly Melanesian workforce is therefore critical when salvaging in Melanesia, where the customary and legal rights of landowners extend beyond the shoreline and into the sea encompassing reefs and their marine life.

“You need to have a Melanesian face representing your company when salvaging here” Mr Papenfus said.

“Negotiations for access through traditional lands, for example, can be extremely delicate and things can go badly impacting the immediacy of your salvage when the local people believe that their interests are not being suitably looked after.”

Mr Papenfus said PacTow also has productive relationships with relevant government bodies and agencies such as port and marine safety authorities.

“Government is always co-operative, and we work well together whether we’re salvaging or conducting our core business of harbour towage.”

INFRASTRUCTURE AND VESSEL INTEGRITY

Melanesia has a considerable network of ports, but most are very small and lack deep water berthing, as well as the equipment and expertise required for major docking and repairs. Appropriate ports of refuge are in short supply and many of the more sophisticated ports won’t accept the mooring of a damaged vessel.

Another issue is that many vessels operating in Melanesia are not properly maintained, professionally operated or adequately insured. This has led to an extremely disturbing number of small passenger vessels that run out of fuel and drift hundreds of nautical miles for days before they are rescued.

Mr Papenfus said PacTow regularly provides emergency assistance to these types of vessels and has saved hundreds of lives in the process. The costs of assisting these types of casualties are usually born by PacTow.

“To this extent we are a bit of a community service, but we have no alternative because leaving vessels to sink and pollute our waterways, or crew and passengers to drown is simply not an option.”

the dcn .com.au54  October 2022 MARITIME ENGINEERING & SALVAGE Pacific Towing
The wreck of Southern Phoenix
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The adequacy of Australia’s biosecurity measures

Australia has serious biosecurity threats on its doorstep, and Paul Zalai of FTA and APSA outlines emerging issues in the country’s biosecurity system

FREIGHT & TRADE ALLIANCE

incorporated member feedback in a formal submission to the Senate Rural and Regional Affairs and Transport References Committee. The feedback recognises serious current and emerging biosecurity threats, the potential diversion of resources from cargo to passenger processing activities, out-dated document assessment and inspection processes, exorbitant costs to importers, and the need for immediate remedial action.

RECOGNITION OF BIOSECURITY THREATS

FTA recognises Australia has serious biosecurity risks on its doorstep; should these cross our international borders and spread, it could have potentially devastating impacts on our agricultural industries, environment, health and economy.

Some of the notable risks include varroa mite, Japanese encephalitis, African swine fever, foot and mouth, lumpy skin disease, khapra beetle and the brown marmorated stink bug.

FTA notes the increasing threat of khapra beetle, listed as number two on Australia’s National Priority Plant Pests list. Changing trade patterns resulting from the pandemic and an inability to risk assess based on container history due to a lack of data are likely strong contributors to a spike in khapra beetle incursions in recent times.

While recognising the need for emergency measures to address these risks, FTA has concerns that these may take limited biosecurity resources away from business-as-usual trade facilitation activities to focus on passenger processing.

The varroa mite is a pernicious pest that impacts bee populations

OUT-DATED BIOSECURITY PROCESSING

In terms of import cargo, the Department of Agriculture, Fisheries and Forestry uses labour-intensive processes with biosecurity officers physically assessing import documentation and selecting consignments on a set criterion for inspection.

A change of import dynamics (increased import sea containerised volume and e-commerce via airfreight) and workfrom-home pandemic operating conditions highlighted inefficiencies in document processing and inspection programs administered by the department.

FEDERAL GOVERNMENT RESPONSE

As outlined in an independent report completed by the Inspector-General of Biosecurity (IGB) in February 2021, the biosecurity system is not in a strong position to address the diverse and evolving biosecurity risks and business environment expected to prevail through to 2025.

“This assessment is based on an examination of the systemic problems, including the department’s regulatory maturity, its approach to coregulation, inadequate frontline focus, and the absence of an appropriate funding model,” the report said.

The release of the IGB report coincided with a meeting between FTA/APSA representatives and David Littleproud (the then-minister for agriculture, drought and emergency management) resulting in the minister producing a media release

acknowledging performance failures, outlining necessary proactive initiatives. He said: “I have asked my department to work with industry groups on other short-term and medium-term system and process improvements, and on setting a global benchmark in biosecurity best practice through co-design.”

Interim measures developed in consultation with industry and deployed by the department during 2021 provided a level of relief but were short-lived as they failed to address longer term underlying causes. It is evident that adequate resourcing levels are required to service the current processing in parallel to deploying longer term reforms.

IMPACTS ON TRADE FACILITATION

While document assessment processing times continue to fluctuate, inspections and the issuing of import permits can take weeks to complete.

Importers, freight forwarders and customs brokers have suffered significant delays adding considerable costs aligned to contractual failures in meeting supply commitments and foreign shipping line-administered container detention penalties for the late dehire of the empty container.

As outlined in the FTA/APSA response to the Productivity Commission’s review of Australia’s Maritime Logistics Systems, foreign-owned shipping lines do not reasonably consider why there is a delay in returning empty containers yet insist they are returned within prescribed timeframes to add to their stockpile congesting our port precincts.

Biosecurity delays are one of many causes of container detention fees that are conservatively costing importers $500 million per year. This is on top of surcharges, terminal access charges and record high freight rates that are rapidly

the dcn .com.au56  October 2022 Mykhailo pavlenko INDUSTRY OPINION

escalating supply chain costs and adding to

pressures.

FTA acknowledges the department is co-designing solutions with industry, including examination of commercial practices to reduce the risk of introducing and spreading contaminating pests, minimising the associated regulatory consequences for Australian commerce.

REFORM

The Biosecurity Trusted Importer Program or commonly referred to as “green lane” is the gold standard of strong partnerships and shared biosecurity culture as outlined in the recently released National Biosecurity Strategy.

The goal of the green lane is to establish trust-based arrangements to: reduce compliance effort and regulatory fees for participating importers and improve speed to market for their goods; allow the redirection of departmental resources to areas of greater risk and system reform; and build relationships between industry and government through sustained effort and collaboration.

These longer-term strategies tie in with the Commonwealth Biosecurity 2030 roadmap by reducing the regulatory burden for qualifying import businesses and increase certainty in border clearance. Furthermore, it ties with successive federal government agendas for simplifying trade and deregulation

FTA recognises Australia has serious biosecurity risks on its doorstep

and align with the scope of the Simplified Trade System (STS) Taskforce.

FTA was honoured to be a member of the National Biosecurity Strategy Reference Group and see all identified priority areas as having of significant merit requiring an underpinning sustainable funding model.

While applauding these initiatives, the rate of implementation is too slow.

By way of example, a contingent of FTA representatives met with departmental executives in December 2021 identifying three areas of reform that were in progress and would be quick to implement. Some

nine months later the initial phases of 14.4 Rural Tailgates Approved Arrangement is being deployed and other agreed initiatives are yet to implemented.

We urge the incumbent federal to introduce immediate relief measures.

While a broader review of cost recovery arrangements is necessary as a part of future budgetary considerations, FTA recommends immediate industry engagement to consider additional transactional fees on the proviso that it translates to commensurate improved and immediate trade facilitation measures.

PROTECTING COMMODITIES PROTECTING PROFITS

IMPORT SAFETY EXPORT CONFIDENTLY

the dcn .com.au 57October 2022  Jim Wilson
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Another trip around the nation for IFCBAA CPD forums

I HAVE JUST COMPLETED presentations on legal issues at the CPD forums conducted by the International Forwarders and Customs Brokers Association of Australia. These were all well attended, and it was good to return to presenting in person and meeting members again on a face to face basis.

We were also all grateful for the engagement by government agencies such as the Australian Border Force, the Department of Agriculture, Fisheries and Forestry (DAFF) and the Anti-Dumping Commission (ADC).

The content of my presentations changed across the forums including consideration of several new judgements by

the Administrative Appeals Tribunal (AAT) and the federal court. I also reported on developments in Australia’s free trade agreements (FTA) and other industryrelated issues both here and overseas.

DUMPING AND COUNTERVAILING DUTIES

With “general” rates of tariffs being reduced through FTAs and other means, the significant levels of duties now imposed are in relation to dumping and countervailing measures.

While the imposition of the measures is decided by the relevant minister following investigation by the ADC, the duties are collected by the ABF. The ABF

also undertakes extensive compliance activities at various stages of the supply chain including through pre- and posttransaction review as well as intervention during the import of goods, often red lining imports of goods it believes to be subject to measures and requiring payment of the relevant duties before the goods can be released into home consumption.

Some recent decisions in the AAT related to Solu, Paracella, Solar Juice and CMS Electracom (the last two conducted by my firm). They were considered at length in the CPD forums, and each deserves careful consideration before deciding whether goods are liable to measures. However, some key issues arose as set out below.

• While reference to the Dumping Commodities Register (DCR) is helpful to determining whether goods are subject to duties, to fully understand whether goods are subject to duties, reference needs to be made to the final ministerial decision contained in the

the dcn .com.au58  October 2022 anastas_styles TRADE LAW
The decision of the full federal court overturned decisions in favour of the “collector of customs” at the AAT and a single judge of the federal court.
Trade law expert Andrew Hudson discusses the judgements addressed at recent continuing professional development forums

relevant anti-dumping notice imposing the measures together with the final report from the ADC on which the minister usually bases their decision.

• Reference to “tariff classifications” of the GUC in the DCR may not, on their own, determine liability to the duties. The goods needed to be analysed in more detail in the context of the words of the Ministerial decision, Anti-Dumping Notice and other ADC reports.

• The measures may not only apply to the goods under consideration (GUC) but also to “like goods” to the GUC if the decision of the minister was to also apply the measures to such “like goods”. The issue of “like goods” has regularly been an issue in considering which goods are subject to the original investigation.

• The “tariff precedent” issued by the ABF as to what is a kit in relation to aluminium extrusions was held in Solar Juice to only be the opinion of the ABF and not binding in any form even though it is often relied upon by the ABF. The upshot of these decisions is that a difficult and complex area is perhaps even more challenging for importers and their service providers. Errors or uncertainties could lead to intervention on imports, post-import demands for duties and even the imposition of infringement notices or penalties. The risks are exacerbated by the absence of an administrative arrangement to rule on the application of measures.

The introduction of such a ruling system was part of a reform package proposed by industry several years ago which was not legislated in the previous two parliaments and is now being considered by the new minister for Industry, Science and Resources.

TARIFF CONCESSION ORDERS

Tariff Concession Orders (TCO) may be granted to allow duty-free entry of goods on the basis that there are no “substitutable” goods produced or capable of being produced in Australia. To secure the benefit of a TCO, imported goods must meet both the tariff classification set out in the TCO and must meet the words of the TCO exactly. In Clover Pipelines, the AAT declined to allow imported products the benefit of a TCO as they did not exactly meet the words of the TCO even though they were the product of the same raw material (epoxy resin).

The term “substitutable” was also subject to further consideration by the full federal court in Alstom which formed the view that the AAT had not properly applied the test for whether Australian-produced trains were “substitutable” for imported driverless trains.

The full federal court (for the second time) remitted the decision back to the AAT for determination (for the third time) with specific directions as to how the test of substitutability was to be applied, requiring a test of whether the locally made goods are reasonably capable of being put to one of the uses of the imported goods.

DUTY DRAWBACKS

A duty drawback is the repayment of the customs duty paid on the import of goods which are exported. However, that process requires compliance with the terms of the Customs Act 1901 (act), the Customs (International Obligations) Regulation 2015 (regulation) and the Australian Customs Notice NO 2020/44 (ACN). In the decision of the AAT in Philip Morris, the AAT agreed with the ABF that the applicant had not complied with those requirements and the duty drawback application was not granted on certain goods exported.

The ABF has recently initiated a review of the relevant provisions of the act, the regulation and the ACN described here. The proposed review will be of general interest to those using duty drawbacks and especially to importers of alcohol who then export that alcohol with the pre-export notification requirements in relation to the export of tobacco being imposed on those exporting alcohol. There is also the proposal to include the provisions of the ACN within the regulation.

LIABILITY UNDER SECTIONS 35A AND 36 OF THE CUSTOMS ACT 1901

There have been several significant decisions in which parties were held liable for customs duty which would have been payable on goods placed “under customs control” if those goods are subsequently not accounted for or produced when required under section 35A of the act. On most occasions this relates to goods which have been placed in licensed premises and are removed from those premises without approval of the ABF (for example by theft).

There is also provision for penalties for a similar amount under section 36 of the act for failure to account for the

goods. There are also similar provisions on liability for excise duty on goods subject to excise duty which cannot be produced on demand although excise is payable to the Commissioner of Taxation (effectively the Australian Taxation Office).

The previous significant decisions include extending liability to persons not just companies deemed to be in possession custody or control of the goods. Further, many decisions have held that liability under these provisions is almost absolute with no apparent defences to liability.

However, the full federal court in Hurley has recently held that the operator of a licensed premises (in possession, custody or control of goods) was not liable under section 35A of the act as the goods had been moved under a “periodic settlement permission” to a retail premises (under section 71E of the act) where duty was not payable until a later date.

The decision held that because the goods were not then under “customs control” as defined in the act, section 35A of the act had no application. The decision of the full federal court overturned decisions in favour of the “collector of customs” (effectively the ABF) at the AAT and a single judge of the federal court. I understand that the Commonwealth is seeking special leave for the case to be heard before the High Court.

CONSEQUENCES FOR INDUSTRY

The combined effect of these decisions is to emphasise that dealing with the liability to duties (whether general duties, dumping and countervailing duties or amounts equivalent to duties) and the ability to exclude duties (through TCO) or have them repaid (through duty drawback) is extremely complicated requiring significant skill from those in industry.

When you add in the possibility of penalties or infringement notices and intervention by the ABF or the ATO at any stage in movement of the goods the need to manage the risks becomes even higher.

the dcn .com.au 59October 2022  Ian Ackerman
Andrew Hudson, partner, Rigby Cooke Lawyers

The value of cold storage to commerce

A story published in the pages of the DCN a century ago in October 1922 shines a light on the day’s concerns around cold storage and meat trade

THE VALUE OF AUSTRALIA’S refrigerated commerce can be gauged by the fact that there is more than ten thousand employees engaged in the industry, and the value of the refrigerating works in Australia is estimated at £7,000,000. It is hard to imagine the numerous activities which radiate from this industry which has grown enormously in the last twenty years. The value of mutton and lamb exported has increased from £492,000 in 1903, to £5,500,000 in 1919-20.

Of this, the United Kingdom paid 93 per cent, and although the industry is now at a standstill, when compared with other times, it seems that the future of the export of meat in this country is bright. The meat industry is, apparently, having the natural set back which visited all industries after the war.

Despite the fact that the industry has grown to an enormous extent in Australia, there is evidence which points to the fact that we are still neglecting opportunities in countries which, because of their position on the map, are acknowledged

as Australia’s rightful trade centres. The enormous population of Southern Asia should be buying those things which cannot be produced in Asia, from Australia; but, owing to the greater activity of her competitors, Australia is only the third greatest exporter to these countries, when she should be, undeniably, first.

The necessity of a direct shipping service between Australia and Shanghai

has been stressed by the Australian Trade Commissioner in China, and numerous Australian merchants doing business with that country. Messrs. Lane, Crawford, & Co., and Dombey & Son, Shanghai, firms with a capital of over a million taels, are just bringing to completion a large cold storage plant in Shanghai. These firms want quotations for frozen beef and mutton and fresh butter. It is an absolute condition of making any purchase of frozen meat or butter in Australia that shipment must be made in cold storage direct from Australia to Shanghai. If there is any question of transhipment, either in Hong Kong or Japan, they will not consider any business with Australia on any terms whatever.

The cause of this condition is the fact that many of the defects attributed to Australian wares in China are directly caused by transhipment which, besides retarding trade in many commodities, baulks any attempt, to exploit the fresh fruit trade in China.

Recently there was mention in these columns of a company being formed to exploit the trade between Australia and Shanghai. It was mentioned that the company being formed was a big one of Australian origin. If this company should be formed there is absolute assurance from the possibilities of this trade of a good return. The whole question revolves around that of cold storage.

It is hoped that this company is launched, and that Australia will be given a new lease of trade life by a decided improvement in the Far Eastern markets.

AUSTRALIAN MEAT EXPORTS IN 2021

While global trade issues throughout 2021 were challenges for Australian meat exports, increased international prices kept export volumes high relative to production.

According to industry group Meat & Livestock Australia, exports represented 72% of total red meat production in 2021. Australia exported 1.45 million tonnes of red meat over the year, a decline of just over 10% on the previous year.

Japan was Australia’s largest buyer of beef, importing 216,000 tonnes over the year. Other big importers of Aussie beef were China, the US and South Korea.

Major markets for Australian sheepmeat in 2021 were China, the US and the Middle East and North Africa region.

the dcn .com.au60  October 2022
Kerrie, Leah Kennedy
MARITIME HISTORY
Sheepmeat in a freezing chamber in the early 1900s

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APSA Conference 2022

The Australian Peak Shippers Association’s 2022 conference coincided with its AGM to create an event driven by stimulating sessions and leadership announcements

INDUSTRY REPRESENTATIVES FLOCKED TO WAGGA

Wagga in late August for the Australian Peak Shippers Association’s conference and annual general meeting.

Most delegates travelled to the event from outside of the regional city, selling out nearby accommodation and providing a burst of stimulation for local businesses. The conference kicked off with a Welcome to Country from Wiradjuri elder Aunty Cheryl Penrith and an official opening from APSA chair Olga Harriton.

The opening presentations were followed by an address from Michael McCormack, federal member for Riverina. The day unfolded with a series of panel sessions allowing for interaction between delegates.

Presentations on infrastructure, ports and shipping, regulatory reform and innovation were among the highlights of the agenda, sponsored by Port of Melbourne, NSW Ports, Port of Newcastle and the Department of Agriculture, Fisheries and Forestry

respectively. A large contingent of delegates also enjoyed a welcome function at the exclusive Riverine Club.

The 2022 conference was complemented by APSA’s 32nd annual general meeting which saw the election of a new board. The meeting set the policy direction for the year ahead and focussed on the need for a review of shipping competition, minimum service levels and notification periods, infrastructure investment, regulation of terminal access charges, regulation of container detention practices, waterfront industrial relations reform and implementation of biosecurity reform priorities.

A highlight of the AGM was a general discussion on compliance activity around cartel and exclusive dealing provisions in the international shipping supply chain sector led be representatives from the Australian Competition and Consumer Commission.

the dcn .com.au62  October 2022 OUT & ABOUT
APSA The welcome reception at the Riverine Club A panel session on innovation Conference delegates enjoying presentations at the welcome reception
the dcn .com.au 63October 2022
WinNews interviewing APSA chair Olga Harriton Delegates at the welcome reception The FTA leadership team Guests enjoying a drink at the Riverine Club Anthony McFarlane, Business NSW and Hany Amer, Tive Michael McCormack, member for Riverina Paul Zalai, FTA/APSA and Adam Drummond, Committee 4 Wagga Discussions during a panel session on regulatory reform

Port of Thessaloniki

ATHENS

Greece

FORMER INTERNATIONAL CHAMBER

of Shipping chairman Spyros Polemis described the Greeks as “mariners without interruption” in an article exploring the country’s maritime history.

Shipping has underpinned Greece’s economic activity since ancient times, and according to a 2022 report from the country’s shipowners’ union, Greek shipowners now own a collective 5514 ships and control 21% of the world fleet by capacity (dwt). It is the largest ship-owning nation in the world.

TRADE OVERVIEW

Greece’s top five export partners in 2020 were Italy, Germany, Cyprus, France and Bulgaria, according to the United Nations Conference on Trade and Development.

Closer to home, data from the Department of Foreign Affairs and Trade suggests the two-way merchandise trade between Australia and Greece was valued at $395 million in 2021. Imports from Greece accounted for $357 million that year, primarily in vegetables, medicaments, cheese and curd, and cereal preparations. Australia’s main exports to Greece were non-ferrous waste and scrap, as well as starches, inulin and wheat gluten.

THE MARITIME ENVIRONMENT

The Hellenic Chamber of Shipping based in Piraeus acts as an advisor to the government of Greece on maritime issues. The Union

of Greek Shipowners is among the unions represented by the chamber of shipping.

Port of Piraeus on the western coast of the Aegean Sea is the largest port in Greece and was, until recently, the second busiest container port in the Mediterranean. Owned by Chinese shipping company

COSCO, the port handled more than 5.3 million TEU in 2021. However, as container throughput volumes dropped during the pandemic, the port of Valencia in Spain overtook Piraeus and bumped it down to being the Mediterranean’s thirdbusiest port.

The Port of Thessaloniki, the second largest container port in Greece, reportedly handled 470,645 TEU in 2021.

MARITIME CHALLENGES

Greece’s dominance of the world fleet and the momentum building behind shipping’s energy transition means the country has a substantial role to play in decarbonisation.

In October last year, Greece reportedly called for a “realistic” EU policy for green shipping, according to Reuters. The prime minister told the European Commission that adding the industry to the EU’s carbon emissions trading scheme should be “proportionate and tightly enforced” to secure a level playing field for the European fleet in global markets.

Around the same time, the Union of Greek Shipowners published a technical report on decarbonising the sector, outlining its concerns that the variety alternative fuels under consideration would be a costly transition.

Tensions between Greece and Iran were embodied by several incidents involving the seizure of each other’s ships over the past several months.

Greek authorities in April impounded Iranian-flagged tanker Pegas with 19 Russian crewmembers on board due to European Union sanctions. A report from Reuters said the seizure “inflamed tensions at a delicate time”.

Then, in May, Iranian forces seized two Greek tankers in the Persian Gulf. An Iranian navy helicopter was said to have landed on Greek-flagged vessel Delta Poseidon while in international waters and took the crew hostage. Greece’s foreign ministry said a similar incident had occurred on another Greek ship near Iran. However, Iran’s state maritime body said the next day the crew of the two Greek tankers had not been detained and were in good health on board their vessels.

In June, Iranian media reported the Iranian-flagged tanker seized by Greece in April was no longer impounded and its oil would be returned to its owner.

And in mid-September, a Greek seafarers’ union said Iran had agreed to release the crews of the two Greek-flagged tankers seized in May.

the dcn .com.au64  October 2022 IN THE NEWS Aerial-motion MARITIME COUNTRY PROFILE
Aegean Sea Mediterranean Sea Port of Piraeus Port of Piraeus, Greece

A safer future: thrusters and technology

Captain Glenn Mathias discusses two ideas for increased vessel safety during port transit: navigational technology and lateral thrusters

AUTONOMOUS OR CREWLESS

vessels have been considered by some owners for a number of years; some autonomous vessels have actually made short voyages. However, to the best of the writer’s knowledge, only one vessel, the Norwegian-designed and built Yara Birkeland – a container feeder vessel that commenced construction in 2017 – has transitioned through the rigorous sea trials. It began commercial operations in April – a triumph of technology. It will operate over a two-year trial with a limited crew for legal reasons, after which, all going well, it could be considered to have successfully complied with the IMO’s fourth degree of autonomy that requires a vessel’s operating system to make decisions and determine actions by itself.

Although vessels with the appropriate technology could achieve the IMO’s fourth degree of autonomy in the future, shipowners should consider two technological improvements to their vessels because they would enhance safe manoeuvring during port transits, reduce costs and provide flexibility in schedules.

TECHNOLOGY

The first piece of technology takes a leaf out of the aircraft Instrument Landing System. The Institute of Electrical and Electronics Engineers credits the system to Dr Ernst Ludwig Kramar’s pioneering work in the 1930s. In October 1946, PICAO, the forerunner to the ICAO, designated the ITT ILS system as the international standard for commercial landing systems.

The ILS is an instrument-presented, pilot-interpreted, precision approach aid. The system provides the pilot with instrument indications which, when used in conjunction with the normal flight instruments, enables the aircraft to be manoeuvred along a precise, predetermined, final approach path to the runway. On modern aircraft, the ability

to couple an autopilot system to the ILS enables the pilot to monitor the navigation and aircraft touchdown automatically and without human intervention.

Compared with aircraft such as the 747-400, whose approach speeds range between 135 to 140 knots-indicated airspeed (KIAS), vessels usually approach ports at a speed of about 10 knots, with the speed progressively reducing as the vessel approaches its berth. While pilot error on approach could result in a crash landing with catastrophic consequences, a navigational error by a master would probably not result in such dire consequences. Importantly, the likelihood of injury is almost negligible.

Because technology has enabled passenger aircraft to land safely since the 1940s, one wonders why similar technology, referred to as a Port Navigational System, has not been fitted in ports and on vessels. The PNS would enable a vessel that had been granted port entry, to be guided into, and out of, a port.

LATERAL THRUSTERS

The second improvement should be the fitting of tunnel thrusters in the parallel body of a vessel, capable of moving a vessel sideways, or laterally. The lateral thrusters would be located inside the double bottom tanks, towards the bow and stern of the vessel’s parallel body. When not in use, their hull openings would be sealed with steel plates that closed flush with the hull plating, keeping friction to the minimum. Thrusters could be retrofitted in dry dock.

When the container vessel Ever Given grounded in the Suez Canal on 23 March 2021, one of the salvors noted that high winds acting on the vessel’s windage area could have contributed to the grounding preventing it from maintaining its intended course. If the vessel had lateral thrusters along its parallel body, their

combined thrust could have counteracted the wind force.

Vessels could experience lateral wind forces in the approaches to, and while transiting a port. The lateral thrusters would be capable of countering lateral wind forces, including adverse currents and tidal flows, maintaining navigational safety and reducing the risk of groundings, allisions and collisions. The thrusters would also facilitate berthing and unberthing, by moving the vessel laterally into, and out of, its berth.

Lateral thrusters are not for all vessels. Larger vessels would be candidates, with a minimum of two and a maximum of three or four on the ultra-large carriers.

RISK ASSESSMENTS

Shipowners and port authorities would be expected to conduct cost-benefit analyses and risk assessments before committing to the technological improvements. The risk of PNS failure during the initial implementation would dictate a pilot be taken when required, with a lower charge if the PNS operated and pilotage advice was not required.

Similarly with lateral thrusters: during the initial stages, tugs would be required to attend vessels but on lower charges if no assistance was provided. The issue of thrusters displacing volumes of water that could affect other vessels, would be dealt with at the design stage that could see, for example, displaced water diverted into ballast tanks or downwards with baffles.

the dcn .com.au 65October 2022  Image supplied INDUSTRY OPINION
Captain Glenn Mathias , ANZIIF Assoc; Dip. Law (University of Sydney), Australian Maritime Consultancy

Tell us about where you work and what you did before that.

I’ve been the chief executive officer of Southern Ports Authority since January 2019, so a bit over three-and-a-half years now. Southern Ports Authority was established in 2014 by the merger of the ports of Bunbury, Albany and Esperance. Before this role I was interim CEO of Mid West Ports Authority in Geraldton.

What is the most interesting place you’ve worked in so far?

Undoubtedly, it was the Dampier Port Authority in the Pilbara, mainly because of the stark beauty of the Pilbara and its connection to a major economic driver of the country, with iron ore coming from Dampier and Port Hedland. I was CEO of Port of Dampier for 11 years. When I first went to the Pilbara, I’d bever been north of Geraldton, so it was a real experience to go that far up the coast. There are a range of ships that go through there, from oil and gas tankers to pipe layers and rig tenders for the gas industry. It was an exciting place to work.

What is your favourite part of working in the ports sector?

I like the ports system and that we have an interest in everything. Ports are connected to the world; they’re connected to the state’s economy, the national economy and the community. We have an interest in the success of our towns and regions. There are so many elements to the job, from dealing with different proponents to going down to the wharf to look at shipping operations. There are also local indigenous communities in each region, and ports really feel that connection. I’m

The grill

DCN caught up with Southern Ports CEO Steve Lewis to talk leadership, life lessons and the beauty of the Western Australian coast

also a believer in intergenerational assets.

Every day we look at how we can make sure we’re leaving something better for the next generation, whether it’s wharves, systems or community relationships for the people who come after us.

Have you learned any lessons during your time as a leader?

I’m now in my 25th year as a CEO and am currently the longest-serving port CEO in Australia. I’ve learned in that time that any organisation is only as good as its people and how those people are connected to each other. You can achieve anything with the right people, and the right people are the ones you’ve got. It’s about what opportunities you’ve provided them with. I appreciate that people are what make a job enjoyable, come up with ideas and interact with the community.

When you were a kid, what did you want to be when you grew up?

When I was very young, I thought I’d be a policeman. Back then, I feel I had high standards and high moral fibre, thanks to my mother’s upbringing. But when I reached college in years 11 and 12, I realised very quickly that whatever job I did would be an indoor job. I’d worked out in the college gardens for two years to help pay for my tuition, sometimes in inclement weather, and decided I wanted to work in an office as an accountant. And I did – I became a junior clerk when I left college, and around three years into that I thought I should join the army, which I did. I was in the army for six years. When I left the army at 26 years old, I transitioned into public transport and worked there for 20 years.

You’re a book person – whose biographies have you found inspiring?

I’ve always been a fan of Winston Churchill. I read all his memoirs from the second world war and his early life. I admire him as a leader and a statesman. I finished a book some months ago about Angela Merkel, the former chancellor of Germany. I read her biography because she was such an outstanding leader. Elton John’s biography Me was an excellent book, and a didn’t mind the last book by Richard Branson, where he reflected on his career rather than giving management advice. I also liked Arnold Schwarzenegger’s biography Total Recall – it had some good life lessons in it.

Do you think you’ll ever have a biography?

I think we all think there’s a book in us somewhere. When you’ve been doing a job for a long time, you always feel there are life lessons you could pass onto other people. I have announced to the workforce here that I’ll be retiring on 30 June next year. I’ll be finishing my full-time work in the industry, but I’m hoping for semiretirement so I can keep some interest in ports. Who knows? Maybe I’ll write a memoir after that.

What’s a piece of advice you’d put in this potential memoir?

There are lot of adages I’ve used over the years, like “always stay on the high ground”. Whether it’s a discussion or argument you go into, should always be on the high ground because you should always be doing the right thing. Any strategy book will tell you it’ll put you in a much stronger position.

the dcn .com.au66  October 2022
Image supplied

Next month in

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In the DCN ’s annual feature on the young people doing great things in the industry, we interview the winners of the Young Achievement Award at last year’s DCN Australian Shipping & Maritime Awards.

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The reefer trades feature examines the state of the trades this year. We look at some of the emerging technology in the sector and offer insight into the reefer trades both here in Australia and internationally.

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