The costs incurred by Australia's coastal shipping operations are continuing to grow despite reduced crewing levels and government subsidies on capital expenditure, according to an Australian Competition and Consumer Commission report.
The report, which monitors the pricing impact of reforms to the coastal shipping trade, shows freight rates did not always increase to the same extent as costs during 1993 and 1994, the years under review.
The data suggest the declines in freight rates experienced in preceding years were largely a response to depressed economic activity rather than a reflection of improved efficiency. Some, but not all, shippers experienced rising freight rates as the economy recovered.
The report, which focuses on the experience of shippers that are not related to the coastal shipping operators, reveals different trends for segments of the trade: On the Bass Strait trade, freight rates for containers continued to fall despite a reduction in shipping capacity. This indicates competition has been sustained on the trade between Tasmania and the mainland despite the demise of one operator and the merger of Union Shipping and ANL's operations; For bulk cargoes, freight rates rose sharply in 1993 and then slipped a little in 1994. Despite the overall rise for the two years, returns for the operators of bulk ships remained depressed.
Freight rate index for Bass Strait trade 1986-87 101.8 1987-88 98.7 -3.0 1988-89 102.8 4.1 1989-90 105.5 2.7 1990-91 102.1 -3.2 1991-92 102.5 0.3 1992-93 100.7 -1.7 1993-94 100.0 -0.7
Bulk shipping costs and revenues 1990-94 Financial year Costs Revenue (Percentage change on previous year) 1990 4 -1 1991 2 -4 1992 -3 4 1993 2 8 1994 5 -2
Average revenues increased for some bulk ship operators despite a decline in demand and an increase in the use of foreign vessels.
The report notes that, if bulk freight rates continue to increase, it may point to supply constraints and a need to review the cabotage system that rations the access of foreign ships to the coastal trade.
The coastal shipping report is part of a wider ACCC program for monitoring the pricing impact of reforms in the maritime industries.
Copies of the report can be obtained from any ACCC office.
The report, which monitors the pricing impact of reforms to the coastal shipping trade, shows freight rates did not always increase to the same extent as costs during 1993 and 1994, the years under review.
The data suggest the declines in freight rates experienced in preceding years were largely a response to depressed economic activity rather than a reflection of improved efficiency. Some, but not all, shippers experienced rising freight rates as the economy recovered.
The report, which focuses on the experience of shippers that are not related to the coastal shipping operators, reveals different trends for segments of the trade: On the Bass Strait trade, freight rates for containers continued to fall despite a reduction in shipping capacity. This indicates competition has been sustained on the trade between Tasmania and the mainland despite the demise of one operator and the merger of Union Shipping and ANL's operations; For bulk cargoes, freight rates rose sharply in 1993 and then slipped a little in 1994. Despite the overall rise for the two years, returns for the operators of bulk ships remained depressed.
Freight rate index for Bass Strait trade 1986-87 101.8 1987-88 98.7 -3.0 1988-89 102.8 4.1 1989-90 105.5 2.7 1990-91 102.1 -3.2 1991-92 102.5 0.3 1992-93 100.7 -1.7 1993-94 100.0 -0.7
Bulk shipping costs and revenues 1990-94 Financial year Costs Revenue (Percentage change on previous year) 1990 4 -1 1991 2 -4 1992 -3 4 1993 2 8 1994 5 -2
Average revenues increased for some bulk ship operators despite a decline in demand and an increase in the use of foreign vessels.
The report notes that, if bulk freight rates continue to increase, it may point to supply constraints and a need to review the cabotage system that rations the access of foreign ships to the coastal trade.
The coastal shipping report is part of a wider ACCC program for monitoring the pricing impact of reforms in the maritime industries.
Copies of the report can be obtained from any ACCC office.