Tasmania–Asia direct freight link plan dropped

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Category: Puertos
Published on Wednesday, 08 April 2015 08:24
Written by Administrator2
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Zoe Reynolds
02 April 2015
 
A vessel docks in the Tasmanian port of Hobart. Photo: PA

A move to provide a direct shipping link between Tasmania, Australia, to Asia has been abandoned, at least in the short term.

The Tasmanian government said the decision to allow a memorandum of understanding with Singapore-based Swire Shipping to expire comes after a federal government AUD203 million (USD154 million) subsidy was extended to Tasmanian export container cargo currently transhipped out of Melbourne.

Formerly, the Australian government's Tasmanian Freight Equalisation Scheme (TFES) did not apply to international cargo. So in November the Tasmanian state government had offered Swire an AUD33 million subsidy to provide the southern island state an international freight link out of Bell Bay.

"Obviously the recent decision by the federal government to inject an additional AUD203 million into TFES will have a substantial impact on freight equalisation and the cost of exporting freight from Tasmania," State Infrastructure Minister Rene Hidding said in a statement. "One [deal] gazumped the other."

Industry sources however told IHS Maritime that while in the short term the changes to TFES may have put an end to proposed Swire international shipping link out of Tasmania, in the long term the subsidy could help attract new direct Australia Asia export links.

The former TransTasman freight subsidy was initially designed to alleviate Bass Strait shipping costs. It is now extended to cover Bass Strait exports bound for international markets and will provide an extra AUD50 million per annum over the next four years beginning 2016.

Exporters will be able to claim an AUD700 subsidy per shipping container.

Swire Shipping, in a statement released on 1 April, said the Tasmanian government has encouraged the company to continue to fully explore all commercial opportunities arising from the current environment.

The company said while it recognises that the extension of the TFES will be positive for the Tasmanian market in the short term, a solution for the medium- to long-term requirements of Tasmanian exporters remains uncertain.

Swire Shipping Country Manager Brodie Stevens commented, "Our interest is to work with partners in Tasmania to develop long term, competitive and direct international shipping services. Given recent developments, the current market does not support this objective. However we confirm our commitment to Tasmanian shippers who have been extremely supportive of our efforts."