COLUMN | Historic lessons on national fleets [Grey Power]

The containership CMA CGM Estelle at berth at the Victoria International Container Terminal at the Port of Melbourne (Photo: ICTSI Australia)

The ships, emphasised the Prime Minister, no less, “are to be run on commercial lines”, a memorandum stating confidently that “rigid economy, combined with the highest efficiency, will be insisted upon”. It all seemed perfectly sensible and logical at the time for Australia to have, under its own control, a fleet of its own ships, able to carry a proportion of the Commonwealth’s exports of wool and wheat, rather than being reliant on the vessels of the UK-owned lines that had dominated the trade. Thus, in 1916, was born the Commonwealth Government Line of Steamers, which was eventually to grow into a fleet of more than fifty ships. What could possibly go wrong?

Sixteen years later, after a series of technical, political and international calamities, the Commonwealth Line disappeared, its ships mostly judged uneconomic and unable to make any returns as the post-war economic recession started to bite.

With the new Australian federal government establishing a taskforce to consider the establishment of a “National Fleet”, along with its associated infrastructure and a revived transport policy, it is perhaps worth looking at some of the lessons from history. It can be seen that the decision stems from a reaction against the many years in which Australia’s own domestic fleet has been in numerical decline, and the dependence upon foreign tonnage has greatly increased.

“Is it any place of government to intervene when the markets seem to have been unable to see opportunities under the Australian ensign?”

There has also been a certain pressure to take traffic off the landside interstate routes, easing congestion, pollution and traffic accidents and to use the empty seas far more than before. But sadly, with road haulage remaining the preferred means of transport (mostly because of price), it has remained commercially unattractive to revive coastwise shipping.

With no prospects of altering the status quo, through any commercial encouragement, the new government in Canberra has determined that the time has come to intervene. Perhaps unsurprisingly, the shipping organisation Shipping Australia has fiercely condemned the move.

Is it any place of government to intervene in such a fashion, when the markets seem to have been unable or unwilling to see opportunities under the Australian ensign? Is there anything to be learned from earlier attempts by government to operate a state shipping company?

A clear and objective view of this first attempt in 1916 to involve government directly in maritime policy may be obtained from Captain Ralph McDonell’s fascinating book Build a Fleet, Lose a Fleet, which traces the brief and fairly disastrous history of the Commonwealth Line. It was published in 1970, when there was much topical debate about the future of the Australian National Line, but there is a great deal in this book that perhaps ought to inform the thinking about the current government’s stated intention. And while the exact situation with the Commonwealth Line (designed for deep sea trading) is clearly not the same as any proposal for a domestically trading fleet and the revival of coastal trades, there are many lessons that can be learned about the hazards of state involvement in maritime operations.

“There will also be a focus on the fact that there is a growing shortage of seafaring skills in Australia, because of the size of the fleet and lack of opportunities.”

And throughout last century it has been significant that attempts by governments in other countries, such as Canada, New Zealand, Brazil, Nigeria, Ghana, and elsewhere to intervene in the state ownership of ships, have almost all been unsuccessful. There are plenty of detractors ranged against any form of protection or political interference with the freedom of trade and the “unfairness” of government lines operating in debt, where others would have gone to the wall, accusations of being in thrall to labour unions and the denial of the domestic seas to those able to operate more competitively.

Captain McDonell notes that, “sight must never be lost of the verbal, political, written, commercial and propaganda warfare that was waged against the Line” along with those aligned with the British conference lines and their “vast commercial empires”. One might think of the forces that might be summoned up to make life exceedingly difficult for any new National Fleet, in the shape of a considerable road haulage lobby and Shipping Australia, which will inevitably argue that the costs of moving goods around will be increased by and the futility of preferential policies to move goods from their trucks to the government ships.

One might argue that there is an old and repetitive argument here between one’s own shipping, flying the national flag, and employing nationals and invariably more economic foreign-flagged shipping carrying the nation’s goods at a cheaper rate. There will be arguments about the demands of the domestic maritime workforce, even on the most lean-manned shipping and why any taxpayer’s hard-earned cash should be subsidising their lavish lifestyle. There will also be a not unreasonable focus on the fact that there is a growing shortage of seafaring skills in Australia, because of the size of the fleet and lack of opportunities.

There is plenty for the taskforce to consider as it gets down to work. But the members should not, in their deliberations, neglect to look at some of the lessons from history.

Michael Grey

Maritime industry legend, and former long-term editor of Lloyds List, Michael Grey kicks off each month with topical issues affecting the maritime world at large.