Forum Lights Up As Don and Paddy Beg To Differ On New Coastal Shipping Laws

[Lloyd's List 23 March 2013]

Maritime union national secretary Paddy Crumlin and Australia Logistics Council chairman Don Telford have locked horns at the Australia Logistics Council’s (ALC) annual conference.

Held at the Melbourne Cricket Ground, it was perhaps appropriate the conference provided a contest as fierce as an AFL grand final, with the two men, who share a striking physical resemblance, clashing over the Federal government’s shipping reforms.

 Mr Telford figuratively lit the fuse in his opening address to the conference, by arguing that the new cabotage laws and changes to the Single Voyage Permit system were uncompetitive.

“For instance last year, the [Commonwealth] government changed the Single Voyage Permit system for shipping,” Mr Telford told the conference.

“Australia went from having one of the world’s most liberal cabotage regimes to one of the most restrictive.

“[It is now] one that reduces competition in the Australian domestic sea-freight market and [leads to] inevitably higher prices for small businesses.

“If you wouldn’t put bricks in a ... knapsack, why do it through any form of transport?”

Mr Crumlin’s turn to speak came several hours later during a panel session which discussed productivity at Australian ports and it’s fair to say the Maritime Union of Australia (MUA) boss’s Irish blood was boiling.

“When I was coming here this morning, one of the things I came here to do was put a flea in the ear of the ALC....” he said.

He described the ALC’s approach to coastal shipping as ‘laissez faire’ regardless of the facts, where “productivity is always the fault of the MUA”.

“I’m here to assure you, we’re not the Bandidos, in fact we’re much closer to the Salvation Army,” he said – a comment that drew a round of laughs.

Mr Crumlin went on to describe the importance of coastal shipping to the movement of Australian freight and fired a salvo at the ALC’s approach to the issue.

“I have to say coastal shipping – this is the big flaw in the ALC,” he said.

“The thing with coastal shipping wasn’t about the Jones Act (a piece of US legislation) cabotage, it was about encouraging people to trans-ship around the Australian coast.

“There’s not a country in the world like Australia where you’ve got three or four intensely urbanised areas... Australia is very unique.

“To take out and rely on those extraordinary distances on the spot market – a market beyond control.

“This is the ALC rhetoric [which is] really driven by foreign ship owners....”

 Mr Crumlin said new laws were a priceless opening.

“This is about creating an opportunity not for a foreign shipping task, but a domestic task, predicated on capital expenditure, ships that are able to trans-ship, short-sea shipping ...

“One of the big issues in North America and Europe is being able to have a predictable model, to have schedules... To have ship owners who are going to put up money to have systematic delivery.”

The new laws would ensure the interaction of foreign and domestic ships in a way, he said, that would be “intelligent and sustainable”.

Made sense

“I don’t think the ALC once has commented on that,” Mr Crumlin said.

Mr Telford said some of Paddy Crumlin’s points “made a lot of sense” but the high cost of Australian labour meant shipping routes such as Melbourne-Perth-Sydney were simply unviable for local shipping.

“Those routes are still not viable due to the high cost of Australian labour and because of the high costs associated with shipping in this country and the demands put on by the MUA,” Mr Telford said.

“Now if you look at how many cycles you are going to get and the capital that’s required to do that, it’s just not a proposition.

“Why should we be putting good capital into the market, when we’ve got ships running past our doors all the time, from point A running empty or under-utilised.”

Mr Crumlin hit back.

“Don, I like your parties, they’re great parties,” he said, a reference to a famous movie of the 1970s called Don’s Party.

“But we’re not just here for the fun of it, we’re here for the truth of it and you’ve again picked an ALC worst-case scenario.

“What about all of the freight on the east coast?

“We’re moving cement ... we’re coming back with phosphate. We’ve been able to deliver a whole bunch of minerals... we’ve lowered stevedoring costs because my union agreed to those kinds of things,” he said.

“You know what’s happening with the current system. 

No-one is going to invest in that trade because the spot-cargo comes in and takes away their ballast leg.”

He described the ALC approach as “blanket opposition based on premises that don’t stack up in a majority of areas”.

“Your approach, Don, in your party, is that you only look at the problems, you don’t come up with the solutions.

“Forget about the west; let’s talk about the east coast, the urban density and some of the things we can intelligently 
do with coastal shipping.”

Mr Telford refused to yield.

“I accept what you’re saying but the economics don’t stack up,” he said.

“You should sit down and work through those economics... instead of coming out with these statements.”

That brought about more fire and brimstone.

“Don, you don’t engage,” Mr Crumlin said.

“The [ALC] won’t engage with the wider industry and we’ve been going [with shipping reform] for three years,” he said.
With neither having given an inch, the debate was concluded.