COLUMN | A shipping puzzle [The Boroscope]

One of the few actually Australian ships

Do fourteen ships constitute an industry? That’s my current tally of the number of ships in the Australian shipping industry. You can even name them all – the four LNG tankers, six ships on the Bass strait run, an aging cement carrier and some small Seaswift ships in North Queensland.

If you throw in a couple of FPSOs, a handful of struggling offshore industry boats and Seaswift’s small fleet of landing barges you’d still be hard-pressed to call this an industry. It’s like a farmer calling his sheep a flock when he knows them all by name.

It doesn’t serve any purpose to say how we got to this sorry point. Suffice to say that it’s the result of global market forces (read third-world crew wages), Australia’s minute slice of world shipping, government indifference and an intransigent union movement that has alienated the general public and helped successive conservative governments indulge in Union Bashing 101.

No company in their right mind would invest in shipping in Australia, even if it was to guarantee delivery of their own cargoes. There’s massive risk and there’s just no money in it. As a consequence, all the ships mentioned above are about 25 years old and at the end of their economic life. There is little incentive to invest in new tonnage. In other words, we’re likely to lose what we’ve got.

The whole complex issue of the rejuvenation of Australian shipping has been discussed, ad nauseum, in government white papers, Senate Enquiries, “Blue Highway” fantasies and queries as to why federal budgets shovel money into road and rail transport and leave shipping to drown in its own demise.

“Poor pay, long swings, insufficient leave and dreadful food”

The downfall of Australian shipping is an historical study in itself. But even in its heyday our “Australian” fleet was tiny by world standards. At best we had just over 100 trading ships. By comparison, in 1950, British Tankers Ltd (later known as BP Tankers) had 140 ships alone, British India had 94 ships, and then there were the likes of Cunard, P&O, Blue Star, Blue Funnel, Port Line Bank Line and others.

In Australia, BHP had seven ships, ANL’s forerunner, the Australian Shipping Board, had a few ships. Australian shipping has always been small. This has a lot to do with our tiny population. On a world scale we are still a small country, many foreign cities have bigger populations than our entire country.

How did the demise of the Australian shipping industry come about? Well, Australia tenaciously clung to its British roots and as a consequence the ships were run like their British cousins. Conditions were atrocious. British ships had a reputation of poor pay, long swings, insufficient leave and dreadful food. It used to be easy to pick out a British ship ­– it had only one seagull flying behind it and that was only on one wing, it had a cut-lunch under the other.

Up in Glasgow, old Andrew Weir used to stand on the breakwater watching the Bank Line ships come in. Any ship that had seagulls flying behind it, the Chief Steward got the sack as soon as they got tied up ­– “far too much waste on that ship!”

So, it’s fair to say that we got the unions we deserved. Australian unions, through bitter and unbending tenacity, turned all those poor working conditions around. And gradually the ships became unaffordable.

So, did Australia ever have a viable shipping industry? Many coastal trades were never expected to turn a profit, they carried their own cargoes to guarantee supply. Our steel works and our oil refineries were a case in point. BHP operated a fleet of bulk carriers for the benefit of its steelworks in Newcastle, Port Kembla and Whyalla. Caltex, HC Sleigh and BP operated coastal tankers supplying fuel to Australian ports. ANL had a few profitable trades for a short while until cabotage was abandoned and operating costs knocked them out of contention.

“Very few people…were sure if we had a shipping industry at all”

The other intriguing thing was Australian ship registration. The British Merchant Shipping Act of 1894 saw all Commonwealth ships, including Australia, registered in Britain. This situation continued until 1982 when the Australian Shipping Registration Act (1981) was introduced. So, prior to 1981 every ship in Australia was registered in Britain even if it was built here and never visited the country of registration. But by 1981 the Australian shipping industry was already heading south.

It’s confusing, to say the least. Every ship in Australia had its homeport emblazoned across its stern. “Melbourne” seems to have been the favoured port for ANL and BHP, both having their head offices there. But these weren’t the Ports of Registry. These ships were all entered on the British Ship Registry. The names on the stern, at the very best, only signified the vessels’ home port (although few BHP bulk carriers ever visited Melbourne).

And at the same time, they proudly flew the Australian Red Ensign signifying they were ships of the Australian merchant fleet. Confusing? It was more than that. This vague situation meant that prior to 1981, very few people, including our trade ministers, were sure if we had a shipping industry at all.

It explained a lot of things. For example, it explained why Masters, Mates and Engineers tickets were accepted without question by British shipping companies. And why Certificates were granted by the “Commonwealth of Australia” and why much of the ship’s documentation was the same as British ships. Remember the Discharge Certificates, exactly the same as in Britain.

Then there was the puzzling activity of changing “Articles”. This inexplicable ritual often occurred in the middle of a swing in some obscure port where you were paid out all the money owing to you, then at the same time you were re-engaged on new “Articles”.

I once did a “change of Articles” in Portland, a tiny rural port in Victoria. The Second Mate virtually cleaned out the Bank of New South Wales of all the cash they had and we all ended up with piles of twenty dollars notes in our cabins (this was before the $50 note came along). So, we all trooped off to the Bank of New South Wales in Portland and opened savings accounts.

My father did a change of Articles twice on one ship he was on. Three Certificates of Discharge (including his certificate when he paid off). Each time he was re-engaged the next day. I never knew why we did this. I still don’t.

“The Australian shipping industry is a puzzle with many pieces that our leaders don’t understand”

There was even confusion as to which flag to fly – the red or the blue ensign. In fact, the concept of “Ships of Shame” (the so-called “flags of convenience”) only came about after Australia had its own Shipping Registration Act in 1981. Coincidentally, about this time the British shipping industry was on the skids as well. British shipyards were closing down, companies (like BP Tankers) were changing their registry to the Isle of Man or elsewhere and Margaret Thatcher had her picture on dartboards in every union office the length and breadth of the UK.

Prior to Federation, all Australian shipping companies had their ships flying the Union Jack. After 1901, ships started to fly a variety of Red Ensigns. This situation continued up until 1953, when the Australian Flag Act cleared up a lot of uncertainty about which flag to hang off the stern of ships. But it wasn’t until 1981, when Australia had its own Shipping Registry, that flag, homeport and registration all lined up.

So, these are some of the puzzling things about the Australian shipping industry. Did we ever have one and did it ever make a profit? We have a situation today where no-one seems to understand the past, least of all our political leaders, and we continue to flounder about discussing ways to rejuvenate the industry.

But there are a few facts that we can’t ignore. We are an island nation dependent on our shipping exports for our economic viability. Ninety per cent of our commodities are imported by sea. Cars, clothing and electrical goods are just some of the items that were once manufactured here.

Our population density is clustered around our coastline, yet we have no Australian shipping industry. Doesn’t that strike you as odd? Nor do we have any means of training people to enter the shipping profession. Where will the next generation of pilots, tug masters and surveyors come from? The Australian shipping industry is a puzzle with many pieces that our leaders don’t understand. One day this short-sightedness will come back to haunt us.


Kent Stewart

Founder of Maritime Engineers, a multi-region maritime consultancy with clients in the oil and gas industry, navy, commercial shipping and marine insurance, Kent Stewart is our resident expert on commercial shipping and the offshore industries.