By Dr Ada Ng, Lecturer in Logistics and Supply Chain Management,
Institute of Transport and Logistics Studies, The University of Sydney
Maritime Logistics 2012 was held on 30 and 31 January 2012 as part of the Pacific 2012 International Maritime Exposition. The conference addressed various challenges the shipping industry will be facing in the near future, including environmental and economic sustainability.
Although ocean shipping has the lowest CO2 emission among long distance transportation, with over 90 percent of world trade carried by sea, the industry is accountable for three percent of the global CO2 emission (around 1 billion metric tonnes per annum). At Maritime Logistics 2012, Jo Shaw from Funnel Exchange presented a carbon offsetting model allowing ship owners, ship builders and shipping technology providers to generate credits by exploring and applying new technologies that reduce shipping emission. More fuel efficient vessels and equipment served as examples for a more sustainable shipping industry. Moreover, shippers and carriers can purchase credits to offset the CO2 generated as they transport cargoes across oceans. Even though a small group of companies are already moving in this direction voluntarily, mandatory control and regulations from governments are needed to accelerate the process.
David Bayne, Port Economist at Drewry Shipping Consultants gave an eye-opening presentation at the conference. Across the globe the average size of container vessel fleet has increased along with the world’s container trade, which rose from 102 million tons in 1980 to 1477 million tons in 2011. Currently, the largest container vessel in service has the capacity of 14,000 TEUs compared with 4,000 TEUs in the early 90s. The largest vessel on order is a triple-E class vessel (Maersk), with a capacity of 18,000 TEUs. One of the advantages of using bigger vessel is to enjoy the benefits of economy of scale with a lower cost per TEU. Because the vessel is more fuel efficient, it is also more environmentally friendly. However, a larger ship size can also have negative effects, if governments fail to address the changing needs in the national port development plan. For example, it is estimated 100,000 jobs may be lost in California with the expansion of the Panama Canal. It is estimated that a large portion of the Asia-North America trade may route through Panama Canal instead of passing through the west coast ports of the U.S.
Currently, New Zealand’s ports are handling vessel with a maximum capacity between 4,500 to 5,000 TEUs. However, according to a report from the New Zealand Shipper’s Council, it is recommended that New Zealand’s ports should be upgraded in order to serve vessel with a capacity of 7,000 TEUs. That way New Zealand can improve its national competitiveness in the region with a possible net supply chain benefit of NZ$ 144 million per year whilst also reducing its carbon footprint.
In Australia, our ports struggle to handle vessels with a capacity of more than 5,000 TEUs. If the government fails to improve our ports to accommodate larger vessels, carriers may tranship cargoes to and from Australia via New Zealand, which will hurt the nation’s competitiveness.
Skills shortage in the maritime industry
Professor Barrie Lewarn from the Australian Maritime College addressed the issue of skill shortage in the maritime industry. In general, there is a balance between supply and demand in the world’s seafarers. However, with the high turnover rate of seafarers – most seafarers leave the sea within ten years – it is predicted that there will be a shortage of seafarers over the next decade. Currently almost half of the workforce in Australia is over 45 years. Companies have difficulties in recruiting qualified seafarers. Although most of the entry level vacancies are filled, a high percentage of seafarers leave the maritime industry to work for off-shore oil and gas companies. Government and industry have to work together to attract young Australians to join the industry. Special retaining schemes, such as long service bonus, and improvement of the work environment, such as providing internet access on vessels, are essential in keeping experienced seafarers in the industry.