A Sustainable Queensland Intrastate Shipping Industry

Posted on
March 13, 2019

Ports Australia recognises that the primary legislative instruments to increase coastal shipping lies within the remit of the Federal Government, however we welcome the Queensland Government’s consideration of this matter in looking at the issues relevant to the state, including potential opportunities and intrastate shipping.  We also recognise that every Australian State and the Northern Territory can undertake reforms within their legislative powers and policy settings that can improve the effectiveness and efficiency of coastal shipping through various landside improvements.  Additionally, States and Territories can advocate for Federal reform that result in significant benefits nationally and for each state and territory.  

Furthermore, we consider it logical and sensible to investigate intrastate coastal shipping opportunities which fully utilise Queensland’s extensive and sophisticated ports network for the betterment of the state given the growing freight task.  

Coastal shipping accounts for only around 2% of Queensland’s total intrastate freight task.   The Queensland Government’s 2013 Moving Freight Strategy noted that this task comprises bauxite trade (between Weipa and Gladstone), petroleum products (between Brisbane to Gladstone and Mackay) and cement trade (between Gladstone and Townsville).   This clearly is a limited scope of coastal shipping’s potential within the state.  Trade opportunities comprising other non-time sensitive goods should be investigated in light of Australia’s and Queensland’s growing freight task (26% in the ten years to 2026  and more than 20% in the ten years to 2028 , respectively), and the limitations with road and rail network capacities which are not an issue on the ‘blue highway’.  

Given the concerning data published on the inadequacies of Australia’s freight network (including those outlined above) and noting that extra investment in the existing freight network will not meet the forecast freight needs, it is surprising to see Government throwing money at road and rail, with no focus on coastal shipping.  Current data indicates that all Governments spent a combined $26 billion on construction and maintenance of roads in 2015-16 and rail expenditure by all governments totaled a combined $11 billion in 2015-16.   The Queensland Government is slated to spend $21.7 billion over the next four years to 2021 22 on roads.  

The ‘blue highway’ has negligible costs.  It does not require maintenance other than the channels at the port and the related port infrastructure which are largely in place and invested in by port owners.  The ‘blue highway’ also connects every port which is key given that there are around 80 in Australia and approximately 85% of Australians live on the coast.  

Ports Australia considers that increased coastal shipping is a necessity for the future economic well being of Australians as it offers economies of scale on the non-time sensitive movement of goods within and across Australian jurisdictions, resulting in cost savings for various Australian businesses and for consumers.  Accordingly, we have been advocating for its consideration in rebalancing Governments’ investment and policy planning across the different transport modes to ensure freight is efficiently and cost effectively moved across Australia.  

Damning statistics published over the last couple of years outline how federally and at the state level tunnel vision planning and resourcing is resulting in significant economic constraints.  The lack of consideration in incorporating improved and efficient coastal shipping for moving freight is costing Australian dearly.  

  • The cost of existing urban transport congestion in Australia’s capital cities is forecast to increase from approximately $13.7 billion to $53.3 billion by 2031 unless significant infrastructure investment and planning is undertaken.  
  • It is estimated that the average cost of excessive congestion in the South East Queensland metropolitan area is approximately $1.2 million per day.
  • Analysis undertaken for the Federal Government’s Inquiry into National Freight and Supply Chain Priorities suggests that while the national freight task is projected to double in the next 20 years, even with extra investment, Australian transport infrastructure will be hard pressed to meet this demand.  

Australia’s ports are the gateway to the national economy with over 98% of the nation’s trade going through our ports.  Due to the scale of trade moving through the ports any increase in efficiencies surrounding them no matter how small provide massive economic benefits.  Conversely, any inefficiencies impact negatively.  The Australian Logistics Council estimates that a one percent increase in freight efficiency in the national logistics supply chain will be boost GDP by $2 billion.   Australians are indirectly paying a premium for the inefficient use of our freight transport network.  Given Queensland has the country’s largest ports network it is imperative that policy makers investigate opportunities that limit the impact of this inefficiency to Queenslanders.  

Unlike any other state, Queensland policy makers also have the added responsibility of ensuring the freight network can withstand the regular natural disasters that affects the community.  Road and rail closures impact the ability of communities to be serviced while also temporarily shutting down our valuable export market that cannot reach our ports.  According to a report by IAG in November 2017 the total economic cost for Queensland over a ten-year period, has averaged $11 billion per year and is forecast to reach $18 billion per year by 2050.  Coastal shipping offers a more reliable service during natural disasters that ensures the functionality of Queensland communities while also providing an avenue to provide natural disaster relief services.  

The additional benefits resulting from increased coastal shipping is:

  • A reduction in greenhouse gases.  A report by the New Zealand Ministry in 2008 illustrated that one container ship can carry the same amount of goods as almost 400 trucks.  A report by Deloitte Access Economics produced for Ports Australia in 2018 indicated that shipping produces 1/5 the carbon emissions of road per tonne-km.
  • Improved safety outcomes.  According to analysis undertaken by Synergy Economics Consulting, under a scenario in which 1 million tonnes of freight per annum is shifted from road to sea between Brisbane and Townsville, the reduction in accident costs would be approximately $30.7 million per annum.  This largely entails a significant reduction in long haul truck journeys transporting freight.
  • Increased regional job outcomes.  Increased coastal shipping will lead to more short haul truck journeys in regional areas to/from the local port.  As a result, regional jobs in the trucking and complementary sectors should receive a boost.  Additionally, increased maritime jobs and support services will be generated in regional economies from increased coastal shipping.

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