International Shipping Outlook

Capt. Melwyn NoronhaGeneral Manager – Technical Services & Industry Policy, Shipping Australia

Limited

www.shippingaustralia.com.au

• Consolidation status of shipping lines and its impacts

• Digitalisation and technological advancements • Snap shot of global freight rates;• IMO’s 2020 Low Sulphur Fuel and alternative

fuel options • Brown Marmorated Stink Bug (BMSB) • Biosecurity Import Levy

Economic Growth Spurs Shipping Demand

Increasing Seaborne trade of Containers

31%

36%

26%

Account for around 93% of the East–West routes

MSC &CMA/CGM Partnership Sept’19

World Box Ship Fleet Update

Established by four shipping linesMaerskHapag LloydMSCOcean Network ExpressMain Goal

Help the container shipping industry move into the digital era

• Reduced paper documentation• Eliminates unnecessary delays

• Reduced costs• Real-time data• Electronic Bill of Lading

BLOCKCHAIN

XSI Public Indices published by Xeneta.

World Container Index - Two-year spot freight trend

IMO’s 2020 Low Sulphur Fuel

• Availability

• Scrubbers – Open loop and closed loop

• Transition and Impacts on Engines from the use of

compliant fuel oil

• Compliance

• Bunker Surcharge

Containership demolitions

Note: 2019 year-to-date as of 26 April.

Source: Drewry Maritime Research

Containership orderbook vs demolitions 2019

Brown Marmorated Stink Bug

Impacts on Shipping

Brown Marmorated Stink Bug

• Inadequate Policy Consultation, Development & Notification Period• Insufficient global publicity;• Vehicle/Break Bulk cargo policies illogical;• Inspection anomalies /Inadequate record keeping / Inconsistent DAWR

interpretations;• Berth congestion and DAWR imposed inspector limitations;• Inconsistencies between Australia and New Zealand

Recommendations for Next BMSB Season

• Policy must be to stop infested cargo being shipped to Australia –not try to contain potentially infested cargo on a ship;

• Aus/NZ - Alignment of Prevention protocols and treatment requirements for cargo;

• Consistent application of inspection regime and practices across all ports of entry in Australia;

• Continuous monitoring of compliance and effectiveness of offshore treatment facilities;

• DAWR officers must be available and able to conduct vessel inspections 24/7 and to conduct such inspections at a sheltered anchorage; and

• Offshore requirements should be commensurate to what we would be willingly to do here in Australia

Biosecurity Import Levy

Announced in the 2018-19 Budget

Supposed to commence from 1 July 2019 and would be:

• imposed on all containerised and non-containerised cargo

imported to Australia by sea, except for military equipment

• imposed on stevedores

• set at $10.02 per incoming twenty-foot equivalent sea

container and $1 per tonne for non-containerised cargo

• one per cent of the current cost of importing a container to

Australia.

In the 2019-20 Budget, the levy starting date was revised to 1

September 2019 to accommodate the work of the industry

steering committee.

Biosecurity Import Levy

Shipping Australia’s Position

• All vectors should be included and a risk-based methodology adopted;

• where possible, existing collection mechanisms should be employed; eg Full Import Declaration

• the point of imposition should be as close as possible to the cargo owners/importers who have created the demand for the import, thereby minimising the scope for cascading as costs are passed through the supply chain;

• recommend the use of the Quarterly Business Activity Statement -Greater involvement for the ATO vs other agencies

• Concerned about the efficiency/effectiveness of the associated expenditure

Over the Horizon

• Speed optimisation and Speed reduction • Autonomous Ships – Yara Birkeland due 2020• Cyber Security • Internet of Things – Connecting Onboard Systems to shore• Artificial Intelligence• Digital Twin Technology

Shipping Industry at a Glance

“Let us never forget... there is NO such thing as "Public Money….

….there is only Taxpayers’ Money”

Late Margaret Thatcher (Prime Minister of the United Kingdom, 1979 -1990)

Thank You