"Between 2010 and 2030 Australia's overall freight task is expected to grow by 30 per cent but coastal shipping is only expected to increase by 15 per cent. With Australia's extensive coastline and broad network of ports, there is scope for this figure to be much greater... However, it is clear that the current regulatory system does not fully support that potential being realised." (Minister for Infrastructure and Transport, Second Reading Speech).

The Minister for Infrastructure has just introduced a Bill to Parliament which, if passed, will significantly liberalise the conduct of Australian coastal shipping.

The issue of Australian coastal shipping has been vexed. Attempts in recent years to introduce an Australian coastal shipping regime to revitalise the Australian coastal shipping sector (which has been dormant/declining for decades) resulted in a system which many feel was unduly administratively burdensome and which resulted in a series of spectacular, long-running and costly court disputes as to who was and wasn't entitled to carry Australian coastal cargo.

As matters stand, Australian registered vessels have priority in carrying Australian coastal cargo. Foreign vessels can apply for a temporary licence to carry Australian coastal cargo. The licence application must be published and the owners/operators of Australian registered vessels have the ability to object to the licence being granted - essentially on the grounds that they are available to conduct the anticipated voyage(s).

In addition, the foreign vessel owner/operator applying for a licence must specify a minimum of five actually anticipated voyages (load/discharge ports, timing, commodity and volume) and there is some degree of inflexibility in being able to change these details in the future, which has acted as a further constraint on many foreign owners/operators applying for a licence.

These matters are set to be addressed by the proposed new laws, which will, amongst other things:

  • remove the five-voyage minimum requirement to apply for a temporary licence
  • streamline the processes for making changes to temporary licences by creating a single variation process
  • amend voyage notification requirements so that notifications are only required when voyage details have changed from that approved on the licence
  • amend the tolerance provisions for temporary licence voyages to better reflect industry practice.

If passed, the amendments should be welcomed by foreign owners/operators, as some of the barriers or uncertainties to entry into the Australian coastal shipping trade will be removed. Ultimately, the changes should also be welcomed by Shippers, as they should increase competition for Australian coastal shipping and result in more and/or better services and price.