Sea freight in Australia and competing transport modes: taxation, fiscal and other policies affecting mode choice, and their environmental consequences

This article investigates the extent to which coastal shipping is under-utilised in the carriage of freight in Australia; and if so, whether this failing can be ameliorated by changes to taxation, fiscal and other government policies. If it is being under-utilised, then this has adverse environmental consequences, because maritime transport is recognised to be the most environmentally friendly transport mode, when compared to road transport. Australia is the sixth largest country by area. It is an island continent, nearly 4,000 km across and 7.7 million square km in area. It has a coastline of 36,700 km. Human settlement is overwhelmingly coastal. All of the major cities, with the exception of Canberra, are coastal. They contain 70 per cent of the Australian population. It follows that there is considerable scope for the transport of cargo by ships on domestic (intrastate and interstate) routes. Where bulk cargo is concerned, ships carry considerable bulk cargo, but where non-bulk, or general cargo is concerned, their share of the freight task has declined massively over the years. This has clear implications for the environment, given that shipping is a more environmentally friendly mode of transport than the competing modes of road, and to a lesser extent, rail. The focus of this article is on coastal non-bulk freight, because it is in this sector as contrasted to bulk freight, that the competing land transport modes have significant scope to displace shipping with adverse environmental consequences. Bulk freight is not irrelevant, however - there may be scope for maritime transport to take over some of the current and projected freight task performed by rail (see below). Forty years ago, ships plying coastal runs carried more general cargo in Australia than did trucks; today the position has been dramatically reversed. By way of preliminary to an examination of the topic, the relative environmental costs of road and maritime transport will be commented on.