Citizens Electoral Council - Election 2016 - Blueprint for Economic Development


Australia: A World Leader in High-Speed Shipping

by Robert Barwick

New Citizen February 2006Published in The New Citizen, February 2002, reprinted in April 2006 edition. Download a PDF version of this section.

Australia needs a shipping industry! We are an island-continent, with a coastline of 19,320 kilometres. In the year 2000, the Australian economy exported $101.295 billion worth of rural produce, resources and manufactured goods, and imported $112.445 billion worth of consumer, capital and other goods. The total sea freight bill on this external trade was $11.9 billion, $9 billion of which was spent on foreign ships operating in Australia. (See Figure 1, below.) This added $3 billion to Australia’s current account deficit, 9% of the total deficit. Yet, incredibly, Australia has virtually no shipping industry. Major shipbuilding in the area of cargo vessels and bulk carriers has been defunct for more than 20 years. Worse, the nation’s ship-owning and ship-operating industry has been allowed to collapse to minuscule proportions: the fleet of commercial Australian flag ships is down to 59 vessels in total, out of a total world market of upwards of 30,000 vessels.

The Australian shipping industry has declined rapidly over the past 20 years, because Government policy has been purposely rigged to favour cheaper foreign shipping. As Captain William (Bill) Bolitho, a legendary Australian maritime figure who was chairman of the Australian National Line (ANL) from 1989 to 1994, and Chairman of the Australian Shipping Commission from 1984 to 1989, explained the decline to the New Citizen on January 21, 2002, “It’s almost entirely because of government policy over the past fifteen years, that has favoured the importation of foreign vessels and foreign crews, untaxed and unregulated. The Australian government hasn’t, for many years, put any support behind either its shipbuilding, or shipping industries.”

Large steel cargo shipbuilding (known as “metal bashing”) ceased in Australia in 1978, when BHP closed its Whyalla shipyard. Until then, Australia had produced a wide range of vessels, including bulk carriers up to 85,000 tonnes dead weight, roll-on, roll-off vessels and ships for the coastal and international trade.1 But when the Government subsidy for shipbuilding, the Shipbuilding Bounty (a percentage of the construction cost paid for by the Government), was rolled back, Australia’s high wages and living standards, like Europe’s, became uncompetitive in shipbuilding, first with Japan, and then, in turn, with South Korea, Taiwan, China and the Philippines. As a “mature” technology, large bulk carrier shipbuilding isn’t hard to replicate, Bolitho explained, and lower-wage nations have a competitive edge.

While the decline in shipbuilding can be partially explained as a global phenomenon, Australian Government policy deliberately disadvantages Australia’s shipping industry. The Australian Shipowners Association reports no less than ten pieces of federal legislation that, one way or another, impose costs on Australian ship operators that are not imposed on foreign operators. For instance, Australian flag ships (ships registered in Australia) are regulated under occupational health and safety and other laws that make ship operating safe. Foreign ships are predominantly unregulated and are issued special permits by the Australian Government to operate on Australian routes, without complying with Australian award wages and safety regulations. Furthermore, Australian operators and crew pay tax, whereas a very large proportion of foreign vessels either enjoy tax breaks that most major shipping countries provide (unlike Australia), or they operate out of tax havens like Panama and Liberia. Panamanian-registered vessels carried 37.5% of Australia’s international maritime trade in 1999/2000, followed by Liberia at 8.5%. The lack of Government finance also disadvantages Australia’s ship operators: like most international industries, the shipping industry is driven entirely by finance. Without cheap Government credits, Australian operators can’t buy their vessels cheap enough to be competitive.

Deputy Prime Minister and Transport Minister John Anderson brazenly admitted to this policy of deliberately disadvantaging the nation’s shipping industry in a speech to a Melbourne dinner in December 1999, when he announced that “Australia is a shipper nation [exporter] and not a shipping nation [carrier],” and that no incentives would be provided by the Coalition Government. In the words of Capt. Bolitho: “The Australian government has set out on a policy of using other countries’ tax breaks to fund their own shipping industry. It’s in terms of finance and government incentives that the heart of the problem lies. Australia doesn’t want a shipping industry. It says, ‘If we can get it cheaper somewhere else, let’s do it’.”

Fast Boat to China: Australian-Made High-Speed Shipping

The one bright spot on the Australian shipping scene has been the development of a vigorous niche industry building small, specialised vessels, particularly high-speed catamarans. Two Australian companies, WA’s Austal Ships, and Tasmania’s Incat are world leaders in high-speed shipping technology, and have set the standard in the development and production of high-speed catamarans and other fast ferries for the international market. Incat has held the Hales Trophy for the fastest transatlantic crossing for the last three years, its Cat-Link V crossing in just 2 days, 20 hours and 9 minutes at an average speed of 41.284 knots (nautical miles per hour; 76.5 km/h or 47.5 mph). 2 Austal’s Villum Clausen holds the record for the longest distance travelled by a commercial passenger ship in 24 hours—1063 nautical miles.

The export of these catamarans has been a successful business for both companies; however, a recent decline in the demand for larger fast ferries has affected the shipbuilding industry. For example, a vessel sold by Incat in January 2002 was its first sale for 14 months. In the face of the onrushing global economic depression, the risk is that the further development of these great Australian companies could be stifled. On the other hand, if LaRouche’s New Bretton Woods/Eurasian Land-Bridge global economic recovery plan is adopted, and Australia in that context adopts a national development perspective, then Australia’s export industries will soar, and along with them demand for these high-speed catamarans.

The immense potential for these high-speed catamarans is in fast freight to Asia, right on Australia’s doorstep. Industry sources report that both the Northern Territory and Queensland governments have canvassed the possibilities of fast freight into Asia, and the concept is seen as strong and workable. The immediate application of that technology would rapidly accelerate the development of the “Top End” of Australia. According to Prof. Lance Endersbee, who has studied fast freight potential into Asia as part of his “Asian Express” high-speed rail concept, a fast freight service into Jakarta, Singapore and Kuala Lumpur would create a demand for high-value Australian produce, particularly in fresh fruit and vegetables. The fledgling exotic fruit industries around Darwin, of Kakadu plums, peanuts, mangoes, paw paws, and figs, that are being developed already using expensive air freight, would be able to expand into large industries for northern WA, the NT, and northern Queensland, supplying the massive Asian market.

Both Austal and Incat have developed their largely vehicle/passenger catamarans into fast freight carriers. Their existing fast freight designs could transport five to eight times the tonnage of a jumbo jet at a rate of around 40 knots. At that rate, freight would be shipped from Darwin to Singapore in just two and a half days!

Singapore is 1887 nautical miles from Darwin, and Jakarta is about 1400. Incat’s Evolution series of high-speed freight catamarans, which are between 98 metres and 112 metres long, could make the Singapore trip in 53 hours at an average rate of 36 knots. These are 1100 tonne vessels that would have to carry 350 tonnes of fuel to make the trip non-stop, leaving between 400 tonnes and 600 tonnes for freight. At 600 tonnes of deadweight (i.e. the weight of the freight), they will operate at 40- 45 knots. The vehicle deck provides a total of 3528 square metres of cargo space, or 589 truck lane metres, plus 698 square metres for palletised cargo forward. Adjustable mezzanine decks that can be raised and lowered have been developed which offer even more space, and which can be adjusted to transport cars and live cattle. Furthermore, the possibility exists for curtained-off chiller zones that can provide varying temperatures in different sections of the deck, to meet the varying requirements of the different produce, without the need for freezers.

Austal’s range of fast freighters include 95m to 116m catamaran “platforms” that have been developed for high-speed transport of containers, trucks, trailers, pallets and aircraft containers. As with Incat’s craft, the shallow draft and high manoeuvrability of these vessels means they require little in the way of port infrastructure. They offer double the speed and therefore half the travel time of conventional vessels, and their freight cost per kg is up to 80% lower than air freight. Pictured are the Ro-Con (roll-on and container, Ro-Ro (roll-on, roll-off), and Ro-Pax (roll-on and passenger) in Austal’s Auto Express range.

In the future, when combined with Prof. Endersbee’s Asian Express from Melbourne to Darwin that will be able to transport produce from the southern states to Darwin in just 24 hours, this fast freight technology could transform the present tyranny-of-distance industries of Victoria, South Australia and Tasmania (which are high-bulk and low-value) into high-value, profitable export industries of fresh fruit and vegetables. As these industries expand, they will drive a rapid expansion of the fleet of fast freight vessels. In the future, hundreds of fast freight ships could make daily runs from Darwin and other northern ports in Queensland and WA, to Jakarta and its sister ports in Indonesia, and Singapore and beyond, brimming with Australian-grown fruits, vegetables, meat, dairy products, and manufactured goods.

The Government holds the key. Prof. Endersbee insists that the establishment of fast freight runs from Darwin to Asia can begin immediately, and does not have to wait until the Asian Express is completed. With the existing industries in Australia’s top end, including the large live cattle export to Asia, and the existing road transport technology of B-double and B-triple trucks capable of 100 km/h that can deliver southern states’ goods to Darwin in a short time, the elements of a successful fast freight industry are ready to be exploited. According to Prof. Endersbee, “The sensible way to commence fast freight would be for the Australian Government to underwrite the line, by buying fast freight vessels from both Incat and Austal, to avoid picking winners, and start operating the service. The service will create demand. When the market develops, the Government would probably be able to sell those ships for two or three times the purchase price. It’s an investment.”

Economic Necessity, Political Will

Australia’s geographic location and economic plight both cry out for a strong Australian shipping industry. With Government support in the form of cheap financing and tax breaks, combined with regulation of foreign vessels, Australia can once again enjoy a booming shipping industry, saving itself the present $10 billion per year in freight costs, an amount which will soar as global economic recovery gets underway.

Australia has a successful track record in running Government shipping lines, through the experience of both the 1920s Commonwealth Shipping Line, and the 1957 to 1998 Australian National Line. The impetus to found both CSL and ANL came because Australian industry was acutely disadvantaged because of a lack of shipping capacity. However, both lines were sabotaged by a political ideology that opposed Government involvement in industry, which in fact led it to support foreign, private shipping interests (see history of ANL, next article). In 2002, history is repeating itself, and Australian industry is once again disadvantaged by the lack of Australian shipping capacity. For an island-nation, a robust, technologically advancing shipping industry is part of the urgently-required infrastructure for sovereignty. Let us, then, dump the present, costly “free market” absurdity, and get on with the job!


1. Roll-on roll-off is where cargo is driven up a ramp onto a boat and stored, usually by a forklift or a similarly manoeuvrable vehicle. When first developed in the 1950s, it was a revolution on conventional ship-loading, where cargo would be lifted up and put down in a hold, and then taken and stored. Roll-on roll-off was more capital intensive than conventional methods, because the ramps were expensive, but in terms of operating costs, and turnaround times, it was far more efficient. It was eventually largely replaced in bulk freight carrying by the container freight revolution, but it still has its applications.

2. The standard for a nautical mile is the Earth’s equator. Each of the 360 degrees of the earth’s equator can be further divided into 60 minutes. Each minute of arc is one nautical mile. Therefore the distance around the earth is 360 x 60, or 21,600 nautical miles. This is the standard measurement used by all nations for air and sea travel. Converted from standard measurements, a nautical mile is 1.852 kilometres, or 1.1508 miles.

Incat’s Evolution series of fast freighters. Evolution One 12, above, carries passengers and trucks. Evolution One 12f, below, carries roll-on, roll-off freight. Both travel at up to 45 knots.

“Can-do” Shipping—the Australian National Line

Once upon a time, Australia did have a Government-supported national shipping line, first with the Commonwealth Shipping Line in the 1920s, and then with the 1957-1998 Australian National Line (ANL). Both were established out of the bitter experience of getting caught in world wars without an adequate national shipping capacity.

Prior to World War I, colonial Australia was totally dependent upon Britain for shipping, and Britain was the destination for most of our exports. However, during World War I, Britain’s fear of German u-boats caused it to stop shipping to Australia, and to take the much shorter and safer route to South America for trade instead. Then, in 1915, Australia raised a bumper wheat crop, but had no means to transport it anywhere. Prime Minister William Hughes travelled to London and purchased six steamers, which became Australia’s first national shipping company, the Commonwealth Shipping Line (CSL). CSL continued until 1929, when Australia’s Anglophile, treacherous Prime Minister, Lord Stanley Melbourne Bruce, sold it to a group of British shipowners. These private shipowners promptly shut CSL down, forcing Australia to once again rely on Britain for its shipping.

shipping in australia

Ten years later, history repeated itself. Upon the declaration of World War II, Australia was unable to get its product to market (as it turned out it wasn’t just freighters Britain was unable to provide— its oft-promised Navy wasn’t sent to defend Singapore on Australia’s behalf, either). The Government’s response was to establish another national shipping company, the Australian Shipping Board (ASB).

In 1957, the ASB became ANL, and for the next 41 years, until it was sold off in 1998, transported freight for Australian industry. Furthermore, it did so very profitably, especially when supported by proindustry political leaders.

ANL eventually fell victim to two ideological shifts in Australia: 1) the post-industrial society that emerged out of the 1960s rock-drug-sex counterculture, which saw many industries dismantled, including Australia’s nuclear and machine-tool industries, beginning in the late 1960s, and 2) the Mont Pelerin Society “revolution” of economic rationalism and globalisation that accompanied Bob Hawke’s rise to power, with his agenda of privatisation and deregulation. In its day, however, ANL served Australia admirably, and is a shining example of what Australia could achieve with a strong commitment to a shipping industry.

The story of the early, successful days of ANL is told in Chapter 14 of Capt. John Williams’ fascinating autobiography, So Ends This Day. Capt. Williams was ANL’s founding chairman, and led it for its first 15 years. Williams was a Welsh-born seafarer of many years experience, whom the Menzies Government’s Minister for Shipping and Transport, Senator Shane Paltridge, approached to head up its new venture to establish a government- owned shipping line on a commercial basis.

Williams’ recollection of Sen. Paltridge’s opening directive for the operation of ANL perfectly captures the spirit in which ANL was launched: “Without further palaver, I was told the fleet was to be run as a private enterprise show: that we would be expected to provide an adequate and efficient service, including the less payable trades; that we need not look for any Government help or favour, the reverse in fact; that the writtendown value of the ships was fifteen million pounds; that we would be given that sum to buy them from the Board plus £500,000 working capital and no more; and, that if we could not make a go of it, to Hell with the lot of us. Then, as a final shot, he said that he wanted me to run the Line as if I had my own funds at risk and that if we paid a dividend of 6% on its capital and kept anything extra to build up the business it would be alright with him—‘But just give us the money, Mister’.”

And they did. With a board comprised of experts in matters relating to shipping, industry and business, ANL began turning an immediate profit. In its first four and a half months’ trading to June 30, 1957, ANL made a profit of £1,139,296, and paid a dividend of £433,064 to the Government. Williams wrote: “I had much pleasure in taking the cheque to Shane Paltridge with the remark, ‘Sir, here is the money!’.” ...

The timing of the establishment of ANL proved very fortunate, because at that time the price of secondhand ships was “astonishingly” high. The ANL board immediately sold all of the “dogs” of the old ASB fleet, and made sufficient money to buy newer and better ships. For example, they were able to sell one 10,000 ton vessel for £650,000, that a few years earlier had been worth just £200,000! ANL was able to procure a fleet of 10,000-ton vessels of the “Lake Class”, that were mainly put into operation carrying iron ore for BHP between Whyalla and Port Kembla, for the lowest iron ore rates on a ton-mile basis of anywhere in the western world.

However, far from being the result of just good fortune, ANL’s success must be mainly attributed to plain hard work and creativity. In 1959, faced with rising freight prices, Williams recruited an engineer and the chairman of the Victorian Grain Elevators Board to help him devise and patent a pressbutton wheat discharging system comprised of screw conveyors and a form of bulldozer blade that deposited wheat onto a belt and into a silo at a rate of 250 tons per hour. The invention never broke down, it turned the ship it was designed for into the best profit earner in the fleet, and it reduced the freight rate by 20%. But, when it was first tried out, there was an initial fault, that forced Williams, the chairman of the company, to personally shovel wheat all night to overcome it.

On June 30, 1959, ANL paid a dividend of £985,507, despite falling trade. In the two years since it had been founded, ANL had paid out £8,694,382 in company taxes plus £2,394,447 in dividends to the Treasury, “real money then,” commented Williams. That’s £11 million paid back to the Government on its initial investment of £15.5 million, in two and a half years! By 1962, ANL’s annual report noted that funds invested in ships had increased by £12,170,722 upon the initial £15 million investment to £27,853,383 without calling on the Government for additional funds. This capital increase of nearly £13 million in five years was achieved despite ANL being denied the right to act as their own agents or handle their own stevedoring, both heavy outgoings when carried out externally. In addition, the entire ANL fleet was limited to no more than 300,000 tons to help protect the private sector against competition from a Government entity.

ANL pioneered roll-on, roll-off (ro-ro) freight in Australia, which was a big technological leap over the conventional cargo handling of the day. Whereas conventional cargo ships lifted the cargo up and lowered it into the hold of the ship, ro-ro loaded cargo on wheels, which was driven up a ramp into the ship; although more capital intensive, because the ramps were expensive, in terms of operating costs and turnaround times, ro-ro was a revolution in cargo handling in those days before container freight. Indeed, ANL’s ro-ro capacity was so good it was competitive with the new container freight revolution in shipping in the 1960s, long after container freight was established. With this technological and commercial edge, ANL established a relationship with the Kawasaki company in Japan that allowed for a very profitable Japan- Australia freight route employing three ships.

Based upon its profitable ro-ro technology, which allowed it to pay high wages to its union workforce, the ANL enjoyed productive, amicable relations with James Healy and his Waterside Workers Federation, “without an argument for twelve years,” as Williams reported. And the peace in the docks was mirrored by the peace in the boardroom. Long after retiring, Williams was reminiscing with another board member from the period, Dudley Williams, about their 15 years together, and Dudley Williams reminded him that on not one occasion had any issue been the subject of a vote, “such was the cohesion and cooperation amongst us.”

But, there was not always peace on the political front, with the Government. After Sen. Paltridge moved on to another portfolio, ANL came under the direction of first Sir Hubert Opperman and then Sir Gordon Freeth as Ministers for Transport and Shipping. Williams reports that both men were as helpful as Sen. Paltridge had been. Then, in 1968, Freeth was replaced by National Party MP Ian Sinclair, forebodingly nicknamed “Sinkers”. Williams reports that Sinclair began a systematic campaign of “bureaucratic meddling” in the running of the company, and that he bluntly informed the ANL board that they should see themselves as what he called a “Political Instrument” and not an independent shipping company. This was a dramatic shift away from policy governing the previous twelve years of successful operation, and at one point the tension between ANL and Sinkers got so bad that National Party leader John “Black Jack” McEwen was forced to intervene on ANL’s side. Williams reports that subsequently, the “Political Instrument” campaign faded into the background, but not long afterward Williams retired after 15 years of spectacular operational success as chairman of ANL. “We retired fully content,” he wrote.

In 1994, PM Paul Keating’s federal Transport Minister Laurie Brereton lambasted ANL as a “basket case with negative net worth” that “could not be given away”. The facts of this were hotly disputed at the time by Capt. Bolitho, and the attempted privatisation didn’t proceed. However, in 1998, the line that “could not be given away” was indeed sold, by Keating’s fellow privatisers, the Liberal/ National Coalition. The parts of ANL were sold for $200 million, proving Bolitho correct, and exposing Brereton’s and the ALP’s claims as lies.

Talking to the New Citizen, Capt. Bolitho predicted that the wheel will turn, and that once again Australia will have no choice but to re-establish a Government shipping line. “It’s been my view for many years that you can’t leave yourself entirely at the mercy of the market,” he warned. “The free market will always cut your throat in the end if it can. You really need some form of counterbalance yourself, even if only to keep them honest. So Australia really does need its own shipping line—there’s no question about it. It’s an island nation.”


Citizens Electoral Council © 2016
Best viewed at 1024x768.
Please provide technical feedback to
All electoral content is authorised by National Secretary, Craig Isherwood, 595 Sydney Rd, Coburg VIC 3058.