Speaker: Mr Llew Russell, AM, Maritime Australia Limited

1. PRESENTATION BY LLEW RUSSELL AM,
SPECIALIST CONSULTANT, MARITIME AUSTRALIA LIMITED
TO THE FOURTH INDIAN OCEAN NAVAL SYMPOSIUM
PERTH, 25-27 MARCH 2014
ON ISSUES FACING THE INTERNATIONAL SHIPPING INDUSTRY AS PART OF A
PANEL ON INDUSTRY RESPONSES TO THE THEME -
“PROTECTING THE ABILITY TO
TRADE IN THE INDIAN OCEAN
MARITIME ECONOMY “

2. Indian Ocean Region, very
important from a shipping
perspective
• Annually, 66% of the world’s seaborne trade in oil,
• 50% of the world’s seaborne container traffic
• 33% of the world’s seaborne bulk cargo passes
through this region
• Involving some 100,000 vessels both large and small

3. LNG Carriage; a star in a
generally gloomy outlook
In Bulk, Container and Crude Oil Tanker fleets currently 20% more
tonnage than required
Outlook for cruise and pure car carriers not as gloomy
Worrying amount of ordering for new vessels is still taking place
Ever increasing environmental regulation imposing costs on the
industry at a time when it can ill afford them
-fortunately IMO moving towards some alleviation with a fuel oil
availability study by 2018 and a more realistic timetable for fitting of
on-board ballast treatment systems.

4. A Crystal Ball …
IMF predicts 2014 global GDP and world import volume growth
to hit a three year high of 3.6% and 4.8% respectively but
emerging economies should remain strong with a 5.1% growth
rate.
OECD is concerned world trade, as a percentage of global GDP, is
not following the same progressive growth trend as it did in the
past:
• 1990’s generally 15%
• 1998 hit 20%
• 2006 25%
• 2009 26% and has remained at that figure

6. Segment Forecasts:
Dry bulk: BIMCO expects demand to grow 4.5% to 6% in
2014 but more recently excess capacity has lowered
earnings
Tankers: Expectation rates for Very Large Crude Carriers
and Suezmax vessels to soften with Aframax vessels to
remain more or less unchanged. However, product tankers
expecting better earnings
Container shipping: Freight rates in the major trade lanes
expected to fall in 2014 due to excess capacity but prospects
in Intra-Asian trade lanes a little brighter. Prospects for the
North-South trades are patchy
Scrapping of vessels is increasing but not fast enough to
counter new capacity coming onto the berth

8. Reduction in Major Oil Spills
Source: ITOPF
Average spills per year over 700 tonnes

9. Ships are CO2 Efficient

11. Australian National Ports Strategy
• Reserved land/sea access and corridors with
transparent and long-term fixed buffers around port
areas
• A 30-year planned national ports system fully integrated
with urban and jurisdictional plans
• Shortened approval times for expansion and new port
infrastructure
• Easing of obtaining infrastructure funding
• Simplified port planning and improved productivity

13. Maritime School of Strategic Thought:
Excellent idea being promoted by the Chief of Navy: development of a new strategy
with the ADF focussed more on understanding our commercial maritime trade in
order for the ADF to play a central role in a critical Australian mission -the
protection of our ability to trade.
Indian Ocean Region an important component of that strategy

14. Maritime School of Strategic Thought:
One Example of Possible Collaboration
Government to build two Roll on/Roll off vessels for the
coastal trade Sydney, Melbourne and Fremantle leased
out to a private operator but configured to support the
Navy in support services as required. Extra berths
would enhance our maritime training capability.
A concept worth exploring but needs to fit within the
Government’s emerging new coastal shipping policy.

15. In Brief Summary….….
Whilst the outlook for many shipping sectors remains gloomy
hopefully 2014 will be an improvement on 2013
Vessels rapidly increasing in size imposes challenges for countries in
this region
Environmental regulation and current timetables remain of serious
concern for our industry
Local issues of interest include new ports strategy, revitalisation of
Australian Shipping, updated Navigation Act and importantly a new
network of shipping fairways
Development of maritime school of strategic thought strongly
supported by industry