Container shipping initiative challenges longhaul road and rail

By: Rob McKay


Great Southern Shipping Australia and Rizhao Port Group sign landmark agreement to bring five container ships under the Australian flag

Container shipping initiative challenges longhaul road and rail
Rizhao Port Group chairman Du Chuanzhi and GSS Australia CEO Paull Van Oost sign agreement to launch new service.

 

Long the poor sister of Australian freight transport, shipping has thrown the gauntlet down to long-haul road and rail with a development marrying international and coastal services.

Once operating, the deal between Great Southern Shipping Australia (GSS) and the Rizhao Port Group of China will boost the Australian-flagged ship fleet, through the Australian International Shipping Register (AISR), with the Sino-Australian partnership planning to invest in five containerships.

They would be the AISR's first-ever ships since it was formed by the previous federal government, an Australian Maritime Safety Authority (AMSA) spokesperson confirms.

Their arrival will mark a significant reversal of a long-term decline in the Australian merchant fleet, which in the past two years alone has slipped by a third from 21 ocean-going vessels to just 14.

The new shipping line has plans to double its fleet of Australian ships from five to 10 as its coastal trade develops over time from a weekly to twice-weekly service.

ATN understands the ships are likely to be about 50,000 deadweight tonnes (DWT), which is said to indicate a peak capacity of up to 3,500 twenty-equivalent units (TEU) of containers.

On a very rough measure, the maximum figure could equate with about 1,200 B-doubles.

The service incorporates import and export links with China as well as servicing traditional coastal lanes from Brisbane, Sydney and Melbourne to Fremantle with new trade lanes from Brisbane and Sydney to Bell Bay in Tasmania and Bell Bay to Fremantle.

It is understood negotiations with stevedores are underway and there is union support for the concept.

If successful, it will mark new momentum for Bell Bay, north of Launceston, which has seen its container-port fortunes raised and dashed over the past 10 years as Rizhao Port is the 11th largest port in world and will be the homeport in China for the GSS operation.

Rizhao, with a population of more than 3 million, is already Australia’s largest trading partner in the resources sector.

Global links

However, GSS notes it is working to position itself as a regional container hub, located as it is in the Shandong Province between Shanghai and the northern ports of Qingdao, Tianjin and Dalian.

The port currently services 30 routes in the domestic and international container trade and already operates a number of 50,000 dwt container vessels in near-Asia feeder trades.

Rizhao handles more than 2.6 million TEU annually and the port is currently constructing a further 11 container berths to allow capacity to increase to 10 million TEU.

Rizhao is the start and end point for the two Silk Road railways that operate through both north and south Europe to Rotterdam.

The GSS and Rizhao Port service effectively extends the Silk Road from Europe to Australia by sea, reducing transit times from Europe by up to 12 days.

In an address to a 100 strong audience at the ceremonial signing at the Hilton South Wharf in Melbourne, newly appointed Great Southern Shipping CEO Paull Van Oost says: "Today celebrates the bringing together of two great nations, in China and Australia, in cooperation in trade and shipping, marking a very significant milestone for Australia’s maritime industry.

"Today is a day that we – both Chinese and Australians alike – should be very proud of.

"We have demonstrated what can be done by collaboration, through understanding each other’s needs and by cooperating to ensure a win-win outcome for China, Australia, Australian importers, exporters and coastal traders."

In dealing with the demise of Australia’s merchant fleet over the past decades, Van Oost says: "We are an island nation reliant on the sea and shipping for trade.

"Given the distances between major cities in the east and west of Australia, as our nation grows, we are very much becoming dependent on the sea for interstate trade.

"The demise of Australia’s merchant fleet cannot and must not continue.

"Today we reverse the past trends and we see through cooperation and friendship, a rebirth of Australian merchant fleet."

GSS also announced an initiative to assist in addressing the future skills and training needs of an industry with an aging and retiring workforce, announcing the introduction of a GSS Scholarship Programme for each vessel operated under Australian flag by GSS.

"This initiative is indeed unprecedented for a private company operating in the Australian maritime sector," Van Oost says.

"However, it is taken by a company that understands the importance in retention of valuable skills within the Australian maritime sector.

"We have no doubt that the federal government recognises this too and we expect they will at some point be making similar or greater contribution to the retention of crucial maritime skills in Australia."

The bespoke liner service is tailored to enhance and improve the overall supply chains of shippers, both import and export, as well as coastal, a source close to the deal tells ATN.

Equipment

The dedicated service and equipment, which includes the provision of 21,500 two-pallet wide high-cube containers, has been designed in consultation with Australian retailers, importers and exporters to complement and enhance their end-to-end supply chains and deliver efficiency - providing savings in both transit times and cost.

GSS director David Whittaker said the service breaks the paradigm of traditional container liner services that require shippers to adjust their supply chain to accommodate fixed or rigid service parameters.

"Many of the Australian retailers, manufacturers and coastal traders who have worked in consultation with GSS over the past years see this solution as a game changer and as a major future contributor to adding efficiency to their supply chain and reducing their end to end supply chain cost," Whittaker says.

The service opens up the export markets of Tasmania, providing direct and inexpensive linkage to China, stimulating growth in Tasmanian exports helping Tasmanian goods and produce become far more competitive on the global stage.

The service provides the first and only direct and express container link between Western Australia and China.

The partners believe this will assist with stimulating growth in WA exports to China and making WA exports more competitive in both delivery time and price on the global stage.

Up to now, the state’s exporters have had to tranship their containers in SE Asia before getting to China.

GSS director Eddie Wong said the service with GSS and Rizhao Ports meets the vision of Chinese president Xi Jinping where it creates ‘One Belt or One Road’ between Europe, China and Australia.

"Many people in the government in China are very excited about this," Wong says.

"Australian manufactured goods are considered highest quality in China and are in great demand. This service will provide China easier and quicker access to high quality Australian goods, particularly those in demand in China from Tasmania, Victoria and Western Australia.

"This is a very good thing for China and Australia."

The new GSS service will commence in the port of Rizhao China and be calling into Brisbane, Sydney, Bell Bay, Melbourne and Fremantle, before returning north to Ningbo, Shanghai and Rizhao.

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