The rising costs of transporting domestic cargo on coastal routes has led foreign companies to increase costs according to a report from The Australian which cites London-based Swire Shipping as charging as high as US$600 per TEU along its southeast Asia northbound service in order to cover costs incurring from the government's workplace act.
Australian companies like Toll Holdings are fearful on one hand that with prices going up - it will have to pay 30 per cent more for domestic cargo from one shipping company - customers will be less competitive said managing director of the freight forwarder Paul Little.
"The other is the shipping companies will say it is no longer economical to pick up coastal freight. We've already had two international shipping companies, one of which is China Shipping, that have said 'we will no longer pick up coastal containers in the future'."
According to Llew Russell, CEO of Shipping Australia Ltd, a company which represents 39 member shipping lines and shipping agencies dealing with around 80 per cent of Australia's container trade, exemptions must be made before cargo migrates to road or rail.
Mr Russell suggests that domestic cargo "incidental" on international trips be exempt or alternatively that local wages apply to seafarers carrying local freight for a period of at least 60 days a year.
"I mean, the reality is that costs are going, will go up, because of this in varying degrees, and really the amount of the cost increase is directly proportional to how much a particular vessel is carrying, and if it's only say 20 containers the cost per container is very high," he added in a report from Australian Broadcasting Corporation.
Source : HKSG, 15.07.10.
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