Australia Needs a Merchant Navy

by

Captain Alan Pearson - Master Mariner

Globalisation and the world wide use of open registers (usually referred to as "flags of convenience") has changed the shape of merchant shipping forever and has led to the demise of many well known shipping Companies.
Australia has not been exempt from this and the frequent use of "single voyage permits" has enabled the Australian coastal trade to be dominated by foreign owned ships. In the harsh commercial world this is not necessarily a bad thing as it enables Australian commercial interests to select the most economic form of maritime transport yielding the lowest freight rate. For example Mr Lance Hockridge the former Head of BHP Transport in delivering the 2000 Boulton Lecture stated "BHP has in the past owned ships in order to capture the lowest cost, highest reliability solutions but now ship ownership is not the sole way of achieving this; a variety of models can be used, for example, the use of other providers' assets through various charter arrangements. BHP is supportive of a competitive Australian shipping industry but cannot continue indefinitely to support one that is not competitive." Since that date of course BHP Billiton has announced the divestment of its shipping interests. Additionally many Australian exporters prefer to sell their goods FOB (Free on board) and thus it is up to the consignee to provide the ship or shipping.
In 1996 the Australian Federal Government withdrew fiscal support (capital grants, accelerated depreciation etc.) and thus any inducement to own or operate Australian shipping. As a result Australian Shipping has all but disappeared and it is not likely to re-appear until it may become competitive in terms of operational costs and a taxation system, which is comparable to those overseas. Additionally at the present time there appears to be little interest in Australia in investing in ships or shipping.

The merchant ship LADY VALISIA. During Australia's involvement in East Timor a number of ships were taken up from trade to support the Australian military logistics train. It is understood that despite East Timor being within 'Hercules range' from Australia more than 80% of the forces' needs were supplied from the sea by ships such as the LADY VALISIA. (RAN)

There is also a conspicuous lack of any definite shipping policy by successive Australian Federal Governments even though inquiries and reports have been commissioned ad infinitum and various prominent learned experts have dilated on the benefits of an Australian Merchant Navy. Indeed a new study entitled the "Independent Review of Australian Shipping" has just been announced. It will be Co-chaired by Mr Peter Morris and Mr John Sharp, Federal Transport Ministers in both Labour and Liberal Governments. They were due to report in February 2003.
Perhaps one may recall the words of Otto Von Bismark who commented long ago "When you say you agree with something in principle you mean that you have not the slightest intention of carrying it out in practice".
In the light of this gloomy picture the question "Does Australia Need a Merchant Navy" has a hollow ring. In short on a strictly commercial basis it does not, but on wider National grounds it may well need one.
The world is currently undergoing a measure of political instability and countries to our North are in some cases experiencing serious unrest. China is emerging as a stronger economic and military power and her claim to the whole South China Sea has sent shock waves through South East Asia.
There has been a marked increase in the military capabilities particularly in the maritime sphere of a number of regional countries in including India, China, Indonesia, Malaysia, Thailand and Taiwan.
Unfortunately crisis or emergencies when they do occur do so at short notice and there is little time to marshal the resources necessary to oppose or contain the emergency at short notice always supposing that such resources are readily available.
The amount and size of the resources required for even a relatively small military operation are not sufficiently realised especially if the scene of the operation is distant from the home base. For example in the case of the Falklands War where no friendly base was close at hand, it required the taking up from trade (STUFT) of fifty-four ships ranging from large passenger liners, repair vessels and tankers to deep-sea fishing vessels (for mine hunting purposes). Even in the more recent case of East Timor, which was a peaceful operation, and close to Australia's shores it was necessary to charter a large passenger catamaran and much heavy equipment was carried in merchant vessels. The need to protect such transport may put a heavy strain on resources.
In the case of the Gulf War merchant shipping bore the brunt of heavy and sustained attacks. In 1986 eighty ships were hit and 52 seamen were killed, in 1987 the toll was heavier with one hundred and seventy-eight ships hit and 108 seamen killed. Altogether Lloyds listed 447 ships damaged in hostilities since the lran/Iraq war spilled over into the sea-lanes. The worlds largest tanker the 'Seawise Grandeur" of 564,739 tonnes was hit twice. A US frigate the USS STARK was hit by an exocet missile and 35 seamen killed. In the article 'Australia's Maritime Doctrine - Part 6" published in the October-December (Vol.64) of the magazine THE NAVY which details chapter 9 of the RAN's maritime doctrine there are several excerpts in the section headed "Maritime Logistics" which are relevant and are therefore repeated in detail.
Naval forces are therefore largely self-sustaining for long periods if supported by an underway replenishment group and the "pull" forward of mission critical stores. This contrasts with the "push" system used for land forces where the fundamental unit of combat is the soldier who has limited capacity for self-support.
Australia's strategic circumstances reinforce the truism that the sea remains the principal medium for the movement of large quantities of material. This means that much logistic effort, whether directed towards maritime combat forces or not, will be by sea. Shipping must thus be considered a joint logistic asset.
Its protection may well become a critical issue within a campaign that has few other apparent maritime dimensions. In the section headed "Ships taken up from trade" it states: -
"support capabilities can be improved by taking merchant ships up from trade and convening them to the extent required by the operation. These vessels cannot replicate the capabilities of built for the purpose replenishment but they can play a vital role in maximising the capacity of the latter by acting as re-supply units between shore bases and the operational area. If vessels are to be taken up from trade, then mechanisms need to exist for their identification within the national register and charter or requisitioning. In these circumstances the possession of a substantial national flag fleet can be an important strategic advantage. Merchant vessels can also be employed to provide sealift for the movement of land forces and their logistic support. Nations with smaller merchant fleets maybe forced to purchase or charter ships for these purposes from overseas, an expedient which can be difficult to achieve in emergencies."
These are fine sounding words but the hard reality must be faced that Australia's merchant fleet is now largely non-existent and the size and type of the ships currently comprising the Royal Australian Navy must limit its operational capacity. While the size and shape of Naval resources can only be a matter for Government Policy, the return of merchant shipping to the Australian Register must depend on the willingness of those interested to invest in shipping.
This will only occur if shipping can operate profitably in the world economic climate. This depends on two factors: -
(1) Government policy regarding taxation, depreciation, Investment inducements etc.
(2) Flexibility in the manning of ships consistent with accepted standards of safety. Crews of ships, especially ships such as tankers and container ships, are now reaching the minimum that can operate with safety. For example Korean ships now operate with crews of twelve and these will soon be reduced to nine. The Korean maritime authority proposes that ships will not carry seamen but only 'Operations officers' and all these will be "Dual Purpose" equally at home in navigational or engineering functions. All maintenance will be shore based.
Economic pressures will dictate a flexibility in manning that has often been the scene of disputation in the industrial field but is essentially the path that Australia will have to follow if the Australian Red Ensign will once again fly over the stem of merchant ships.