Tasmania’s planned direct international shipping link fails to materialise
A $33m memorandum of understanding (MoU) between the Tasmanian government and Swire Shipping expired this week, ending negotiations by the parties to establish a direct shipping link from Tasmania to Asia.
Tasmania’s minister for infrastructure Rene Hidding said it was agreed with Singapore-based Swire as part of the MoU, that both parties reserved the right to consider any changes implemented by the Federal government to the Tasmanian Freight Equalisation Scheme (TFES). “Obviously, the recent decision by the Federal government to inject an additional $203m into the TFES will have a substantial impact on freight equalisation and the cost of exporting from Tasmania. “As such, given this materially different context, it was not possible to reach an agreement with Swire under the terms of the MoU,” Mr Hidding said.
Mr Hidding said while it was not ultimately possible to reach an agreement with Swire in light of the Federal government’s TFES announcement, there may be future opportunities for Swire as the changes to the TFES are implemented and further changes to the Federal Coastal Trading Act are considered by Federal parliament. He said the state government is committed to ensuring the $33m allocated to the potential international shipping service is spent on job-creating infrastructure. “We will detail specifically how this one-off funding will now be spent in the 2015/16 budget when it is handed down on May 28.”
The MoU was signed in late 2014 to confirm that Swire Shipping were the preferred operator for the Tasmanian government to explore a direct shipping link.
Lloyd’s List Australia contacted Swire Shipping for comment but at the time of publishing the company was yet to respond.
Source: Lloyds List
Update on situation in Yemen
The latest update we have received is that the entire city of Aden including the port is closed. The vessel calls in port of Aden are cancelled by all carriers. Operations to/from Hodeidah port are running normally. Maersk Line are currently holding Aden destined cargo at the Port of Jeddah, and working on alternative transhipment options for cargo that is still in transit.
We will be working very closely with our team in Yemen to provide a clearer picture for our customers in Australia as soon as we can. All customers with affected bookings will be advised directly by our Customer Service teams the contingency plan for each shipment.
UN3480 lithium ion battery restriction
Following an internal safety assessment, Qantas Freight and appointed handling agents will no longer accept shipments of UN3480 lithium ion batteries for carriage on any Qantas Group aircraft. The restriction will take effect on 1 April 2015 and applies to all domestic and international Qantas, Jetstar and QantasLink passenger services as well as all Qantas Freight domestic and international freighter services.
Please be aware that there is no change to acceptance of shipments of UN3481 lithium ion batteries packed with or contained in equipment. These goods continue to be carried on both our passenger and freighter aircraft. While it is important that we restrict routine transportation of UN3480 lithium ion batteries, we recognise that these commodities play a role in a range of urgent life-saving devices. We will continue to work with customers to accept small quantities that are urgently required and where no other means of transport is available. Please contact your local sales representative for conditions of carriage.
JETS Transport Express continues to offer carriage of UN3480 lithium ion batteries on its specialist interstate road transport network, which services major cities across Australia. This multi-modal network enables Qantas Freight to continue offering supply chain support to critical industries that use lithium ion batteries. Safety is the Qantas Group’s first priority. This change of carriage policy has been introduced in the context of an ongoing review by aviation safety regulators, following discussions with aircraft manufacturers and an internal risk assessment process. The change aligns with similar policy changes introduced by several of our alliance and code share partners.
Increased costs Port of Melbourne
We have sent formal correspondence to the Port of Melbourne Corporation today (Friday 6 March 2015) adding our support to the industry outcry about port rental increases being enforced by the Port of Melbourne Corporation that will undoubtedly flow on to the freight and trade sectors.
The Freight & Trade Alliance (FTA) submission questioned the rationale for the magnitude of rental increases noting that it looks like nothing more than a cash grab in order to inflate the value of the port as a part of the Victorian Government’s privatisation process.
Whilst publicly supporting other port privatisation initiatives (please refer to our commentary published in the Australian Financial Review) we are of the view that the approach by the Port of Melbourne Corporation justifies the fears of the Australian Competition and Consumer Commission (ACCC) that such initiatives will generate unwarranted price increases.
We have sought early engagement with the Port of Melbourne Corporation to address these concerns.
For further industry commentaries please refer to:
· DP World - Media Release
· Fully Loaded
· Lloyds List Australia
PM announces $200m subsidy for Tasmanian freight
Prime Minister Tony Abbott announced a $203m expansion of the Tasmanian Freight Equalisation Scheme (TFES) late last Friday (March 13) in Devonport, Tasmania. The subsidies are expected to be applied at $50.75m a year over four years, representing an increase of more than 40% in the Commonwealth government’s annual contribution and from January 1, 2016, will cover international freight as well as domestic transhipment.
Tasmanian exporters will be able to claim $700 per shipping container. Shippers from King Island and the Furneax Group of Islands will be eligible for a 15% additional loading. Under the current scheme that was first announced in 1976 by prime minister Gough Whitlam, only domestic freight leaving Tasmania is subsidised, which Melbourne lawyer and convener of the National Sea Highway Group Peter Brohier said is a “failure” and an “interstate barrier no other state faces”.
Mr Brohier has called for a national maritime sea highway policy which he said would result in access costs set consistently at the cost of travelling on a road to cover all people, vehicles and freight and will integrate the Tasmanian economy. “Tasmania’s so called “geographical isolation” doesn’t justify subsidies when isolation of other states over land has justified substantial Federal interstate highway expenditure,” Mr Brohier argued. He says the “cheapest and shortest inter-capital interstate transport corridor is largely being ignored.”
But Tasmanian exporters have been calling for an extension of the TFES for around 18 months, according to Tasmanian Logistics Council chairman Steve Henty. He told Lloyd’s List Australia that today’s announcement is “fantastic news for Tasmanian exporters”. He told Lloyd’s List Australia that today’s announcement is “fantastic news for Tasmanian exporters”. “But it also removes the bottlenecks for potential investors in Tasmania that may have seen the disadvantage in Bass Strait as a reason not to invest,” Mr Henty said.
