Shipping Australia Limited has released a statement on the Australian “Strategic Fleet” policy released today, to point out the reasons why they think that this is not a good idea.
he Australian Government today announced it will establish a strategic fleet of up to 12 Australian-flagged and crewed vessels. The Government appointed this Taskforce to guide it on the establishment of the fleet, noting it would be privately owned and operate on a commercial basis, but could be requisitioned by the Government in times of national crisis such as natural disaster or conflict
According to Shipping Australia, this kind of policy has been tried several times in Australia and it has always failed. The Federal government-owned fleet failed (1928). The WA-owned Stateships failed (1995). The WA government subsidised service to replace Stateships failed in 2013. Another national government owned company failed (several times in fact; it last failed in 1998). The Coastal Trading Act (2012) had six objectives to boost Australian shipping but it succeeded in destroying it, driving ships, jobs, and industry away from Australia.
Shipping Australia also noted that:
- The Strategic Fleet is just the recycling of a policy that we already know has failed in the past.
- Expert independent analysis by the Productivity Commission indicates that the policy is doomed to fail again in the future.
- The fundamental premises of the Strategic Fleet are utterly flawed.
- It will not add to economic sovereignty; Australia is already economically sovereign.
- It will not add meaningful capacity; the numbers of the Strategic Fleet are small and the international shipping industry is vast.
- It will not cut costs; Australia is a high cost country – this proposal has the potential to drive up costs during a cost of living crisis, especially if a possible levy is actually imposed on shipping.
- It will not be an economic success; history shows that such ventures waste public money.
- It will not meaningfully add to domestic skilling; as the Productivity Commission pointed out in its “Australia’s maritime logistics system” report: “it is best addressed through immigration and cadetship programs without additional government intervention”. And that’s before we even start discussing future technologies such as remote-controlled and autonomous ships.
- It will not boost domestic maritime logistics; crises don’t discriminate by flag. If there is a nationwide problem, then any national fleet, and the international fleet, would be caught up in the same problem. We saw this during COVID – ships of every nation were caught up in port queues around the world. Ships flying the Australian flag would not have been exempt from the crisis.
- It will not boost supply chain resilience; throughout history, time-and-time again in crisis-after-crisis, shipping sailed through every problem and continued to deliver the goods. International shipping has never been stopped – not by disease, not by war, or strikes, or piracy. Nothing stops international shipping from delivering the goods.
- At best the Strategic Fleet will add next-to-no extra capacity while being a costly waste of resources. At worst, it will increase costs during a cost-of-living crisis.