Australian Coastal Shipping Costs: Why It’s Cheaper to Ship Abroad Than Domestically
| ShipUniverse 30 Second Summary: Australian Coastal Shipping Cost Challenges | ||
| Key Issue | Summary | Impact |
| High Shipping Costs | Shipping from Melbourne to Brisbane costs more than shipping to Beijing. | Increases operating costs for Australian businesses and exporters. |
| Restrictive Regulations | Coastal Trading Act requires foreign ships to obtain a Temporary License. | Drives up costs, reduces competition, and limits shipping capacity. |
| Exporter Impact | Wine, grain, and produce exporters face high domestic shipping costs. | Businesses bypass Australian ports, sending products directly overseas. |
| Industry Response | ALC calls for regulatory reform; unions demand job protections. | Divides the industry, with ports, unions, and businesses taking sides. |
| Future Outlook | Potential reforms to Coastal Trading Act are being discussed. | Exporters seek relief, while unions push to protect Australian jobs. |
The cost of coastal shipping within Australia has come under intense scrutiny as businesses report that it is often cheaper to send goods to international destinations like Beijing than to ship them domestically between Australian ports. This situation is a result of Australia’s restrictive coastal shipping regulations, which many argue are driving up prices, delaying shipments, and reducing the competitiveness of domestic trade.
Australia’s Coastal Trading (Revitalising Australian Shipping) Act 2012 requires foreign-flagged vessels operating domestically to obtain a Temporary License. The process is complex, and foreign ships must meet higher labor and wage standards than when operating internationally. These restrictions are intended to support the domestic shipping industry and protect local jobs, but critics argue that they have made Australian shipping routes among the most expensive in the world.
Key Examples of Cost Disparities
A striking example of the cost disparity is the price difference between shipping cargo from Melbourne to Brisbane versus Melbourne to Beijing. Businesses have found that, in many cases, it is cheaper to send cargo internationally than to transport it along the Australian coast. This issue has been highlighted by Australian exporters, who face higher logistics costs when moving goods domestically before export.
The Wine and Agricultural Sectors have been particularly vocal in calling for reform. Farmers and exporters claim that high domestic transport costs make Australian wine, grain, and produce less competitive in global markets. Instead of sending produce to Sydney or Brisbane, some exporters opt to send it directly to overseas markets, bypassing Australia’s coastal ports entirely.
Industry Response and Calls for Reform
Industry groups such as Australian Logistics Council (ALC) have called for changes to the Coastal Trading Act, arguing that the current rules make it unreasonably difficult and costly for foreign-flagged vessels to operate within Australia. They argue that shipping competition would drive down prices, benefiting consumers and exporters alike.
Meanwhile, port operators and labor unions have resisted calls to change the law, arguing that reducing restrictions would result in job losses for Australian seafarers. The Maritime Union of Australia (MUA) maintains that foreign ships should not be allowed to undercut Australian workers by using cheaper foreign labor.
The Australian government has hinted at potential reforms, but changes remain politically sensitive. A balance must be struck between protecting domestic jobs and reducing costs for Australian businesses. With exporters calling for cost relief and unions demanding job protections, it remains to be seen whether coastal shipping regulations will be eased.
Industry analysts predict that unless changes are made, businesses will continue to bypass domestic shipping routes, opting for direct exports from port to international markets. The Australian government is now under pressure to address the issue as the country’s export competitiveness is at stake.