Financial year 2007/8 was another year of strong growth for shipping in the region:
- Australian international container traffic grew nine percent to 5.32m TEU, underlining the urgent need for incremental port infrastructure investment
- Two of New Zealand’s three largest container ports grew similarly – Auckland and Lyttelton, while Tauranga was up 25 percent – between them handling nearly 1.7m TEU
- Western Australian iron ore ports grew to meet demand from China and India – Dampier and Port Hedland cargo handled increases of six percent and 17 percent respectively to around 130m tonnes each
- Australian East Coast Coal ports’ performance was less stellar despite similar strong demand from Asia (Newcastle plus nine percent and Gladstone plus three percent) – both ports and Dalrymple Bay endured long ship loading queues primary due to rail supply chain issues
- Cruise port calls will reach new peals for the 2008 summer season of 542 in Australia and 443 in New Zealand (up 27 percent and 30 percent respectively on 2007)
At the Federal level, Infrastructure Australia was established under Rod Eddington, ex-CEO of British Airways, to develop coherent plans for future national infrastructure, particularly transport. The Australian House if Representatives Standing Committee on Infrastructure, Transport, Regional Development and Local Government reviewed 68 submissions on coastal shipping – it then recommended a national approach to commercial vessel maritime safety, port development, and maritime training – as well as changes to relevant legislation, particularly fiscal, to encourage this sector.
In New Zealand the Clark Government repurchased the rail system and the Interisland ferry business from Toll and introduced a new 30-year policy initiative to double coastal shipping’s share of the domestic freight task from 15 percent to 30 percent.
And then, in mid year, the bubble burst.
- Capesize spot rates fell from US$230k per day to <$10k (and 12 month T/C from U$160k to $60k) currently
- Container vessel newbuildings equivalent to half current capacity started to be cancelled and capacity reduced in face of declines in Asian trade with both USA and the EU (40 percent of world total)
- Oil Prices fell from US$147 to US$60 per barrel and Singapore 180 cSt from US$727 per ton to $350
- The Australian dollar fell from US$0.98 to $0.60, and the New Zealand dollar from a peak of US$0.82 to $0.55
- Credit became ever more costly, if available at all, for infrastructure development, new ships and trade
- A reduction of liner services and/or vessels – Maersk’s new Boomerang Service between Australia and Asia now deploys 10 vessels (14 before), Maersk and Hamburg Sud’s combined service to USEC and Europe uses 12 ships (22 before), the VSA incorporating ANL/USL to the USWC uses 16 vessels (19 before), while Hapag Lloyd and CMA CGM have re-combined their weekly European services via Suez – halving the ships deployed to 12;
- A reorganisation of New Zealand’s 13 ports as liner services rationalise;
- Slowing of bulk port development as raw material demand soften in China and India;
- Experiments with liner coastal shipping services in both Australia and New Zealand encouraged by policy initiatives, environmental factors and the spiralling cost of land transport infrastructure – this despite series seafarer shortages in both countries;
- A softer cruise sector – RCL has announced service cutbacks in regional programmes, and terminal problems in Sydney, Auckland and Brisbane are likely to encourage others to consider the same;
- Liner shipping services to the Pacific Island will further rationalise services via sharing of slots.
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