Logistics Industries ENVIRONMENTAL SCAN

Transcription

1 Logistics Industries ENVIRONMENTAL SCAN Updated July 2015 This document is an extract of the 2015 Environmental Scan prepared by the Logistics Training Council for the Western Australian Department of Training and Workforce Development. For more information please refer to the complete Environmental Scan. Prepared by the Logistics Training Council for the Western Australian Department of Training and Workforce Development 17 Lemnos Street, Shenton Park, WA, 6008 Postal: PO Box 7033, Shenton Park, WA, 6008 Telephone: (08) Facsimile: (08) Web: logisticstc.au

2 This page is intentionally left blank. Logistics Industries Environmental Scan 2015

3 Table of Contents Overview... 1 Trends Analysis... 3 Demographics of Workforce... 3 Size and Distribution... 3 Employment... 4 Age Profile... 6 Gender... 7 Qualifications and Training... 8 Educational Attainment... 8 Government Policy... 8 Regulatory Requirements... 9 Globalisation... 9 Technological Sustainability Economic Drivers Regional Activity Social Impact Occupations in Demand Logistics Industries Environmental Scan 2015

4 Overview Australia, as an island nation, depends on a safe, efficient and environmentally sustainable maritime sector. Around 25 per cent of the domestic freight task (on a tonne kilometre basis) is carried by ships, with the number set to increase over the coming years. Over the last 15 years, the amount of this cargo carried by foreign vessels employing foreign crews has increased from six per cent to 30 per cent. Whilst more than 99 per cent of Australia s international trade is carried by ships, only 0.5 per cent of its export trade is carried on Australian flagged vessels. Since 1996, the number of Australian registered trading vessels has more than halved from 55 to 22; and employment on Australian registered trading vessels has reduced from 2,400 to 1,300 over the same period. 1 Ship owners globally continue to register ships in ports of convenience and, in most cases, source seafaring labour from those regions, in order to save costs. However, it is expected that the Federal Government s shipping reforms will lead to an increase in the number of Australian flagged ships. 2 In WA where over 95% of imports and exports are transported by sea, shifts in global trade have a profound effect on shipping and associated industries. Limited on-board places for the training of seafarers has become more pronounced due to a severe reduction in the movement of Australian flagged ships in and out of Australian waters and the significant increase in wages growth, making Australian shipping uncompetitive. The significant reduction in the number of Australian-owned ships over the last decade has contributed to the limited number of seafarer training positions on board Australian ships. Ship owners globally continue to register ships in ports of convenience and, in most cases, source seafaring labour from those regions. There is a general shortage of workers in the industry due to a previous lack of commitment from the industry to train; an ageing workforce and a significant increase in the work available. There are two ferries (the MV Phillip Pendal and the MV Shelley Taylor-Smith) which make 92 trips on an average weekday, September to April, and 60 trips on an average weekday, May to August. The contract to operate these services for Transperth is held by Captain Cook Cruises. There were more than 348,000 total ferry boardings during the financial year. 3 Infrastructure Australia and the National Transport Commission have developed Australia s first National Ports Strategy after extensive industry and government engagement. The strategy was endorsed by the Council of Australian Governments in July Australia's bulk commodity exports and metropolitan container imports are both expected to double in size every ten years. Long-term planning will provide greater clarity of how future port capacity will match those trade forecasts. 4 Responsibility for the planning and operation of Australia's ports, which handle 25 per cent of all freight moved, currently cuts across all three levels of government. Better coordination of those activities will help to improve productivity and attract greater private sector investment. The National Ports Strategy is an integral part in the development of Australia s National Land Freight Strategy, which is being coordinated by Infrastructure Australia. 5 There are four sectors in the maritime industry: Logistics Industries Environmental Scan 2015 Page 1

5 Up and Down Stream Sectors Oil and Gas Production Iron Ore Mining Shipbuilding Marine Cargo Handling International Blue Water Transport This industry operates vessels for the transportation of passengers or freight by sea between domestic and foreign ports. The high percentage of service imports as a proportion of demand reflects the dominance of foreign flagged ships servicing Australian ports. The primary activities of companies in this industry are: Freight transport service (international sea transport) Ocean cruise services (between domestic and foreign ports) Passenger transport service (international sea transport) Ship management service for international sea transport (ie operation of ships on behalf of owners) Near Coastal Water Transport Companies in this industry operate vessels for the movement of passengers or freight by sea between domestic ports. This also includes companies involved in chartering or leasing ships with crew, for any period, for use in coastal sea transport. The primary activities of companies in this industry are: Crewed boat charter, lease or rental for the purpose of coastal water transport Freight transport service on coastal sea transport routes Island ferry operation in coastal waters Ocean cruise services between domestic ports Passenger transport services (coastal sea transport) Crewed ship charter, lease or rental for the purpose of coastal sea transport Ship management service for coastal sea transport (ie operation of ships on behalf of owners) Vehicular ferry operation in coastal waters Inland Water Transport Organisations in this industry operate vessels which transport freight or passengers in harbours or inland waters (except tug boats or lighters). The primary activities of companies in this industry are: Cruise operation (river, harbour or lake; with or without restaurant facilities) Freight transport service (river, harbour or lake) Passenger ferry operation (river, harbour or lake) Logistics Industries Environmental Scan 2015 Page 2

6 Passenger transport service (river, harbour or lake) Water taxi service (river, harbour or lake) Trends Analysis Major growth has occurred in coastal marine occupations, particularly marine tourism, chartered vessel operations, public ferry transport, coast guard and emergency services and marine services to the oil and gas industry, as well as increases in the size and complexity of vessels. Approximately 40 per cent of activity in the offshore maritime (oil and gas) sector is based in WA. The sector employs approximately 2,500 staff hired directly to the vessels operating in the area and supports more than 10,000 staff in affiliated areas. 6 During the 2013/14 financial year, WA ports exported nearly 720 million tonnes, roundly 60 per cent of the nation s trade of 1.17 billion tonnes. The value of this trade exceeded $145 billion, representing an increase of more than 10 per cent on the previous year. By tonnage, Western Australia s exports now exceed the entire volume of all other Australian jurisdictions combined. 7 The State is home to three of Australia s five largest bulk exporting ports, including Port Hedland, the world s largest bulk exporting port, based on tonnage. 8 Freight growth is expected to continue over the next two decades. The Western Australian Regional Freight Network Plan has identified that by 2031 trade through our ports will increase 140 per cent to more than 1 billion tonnes per annum. 9 The maritime sector is expected to grow annually by about nine per cent. 10 Growth in export volumes, including a rise in containerised and non-containerised trade will increase demand for international sea transport. Increased demand relating to a growth in tourism is projected, which includes passenger cruises and coastal maritime operators. New investment in offshore oil and gas projects will also intensify the need for qualified seafarers. 11 Differences in regulations between vessels, blue water, inshore, offshore and fishing, has meant that difficulties can arise for those experienced maritime workers wishing to move from one type of vessel to another. 12 This has been addressed by changes brought about by the Australian Maritime Safety Authority (AMSA), which are currently being implemented. The cruise market segment is growing rapidly, sustaining the demand for seafaring workers with multidisciplinary skills at all levels. 41,000 international sea passengers passed through Australian ports in , which is forecast to increase to 59,100 passengers by During the 2013/14 financial year, 31 cruise vessels visited the Port of Fremantle, with 44 vessels scheduled to visit during the 2014/15 financial year. Fremantle Ports Authority continues to be proactive with Cruise Down Under, Australia s peak cruise industry association, to promote Fremantle as a cruise ship destination and to support marketing of the region. 14 Other regional ports, such as Broome, Geraldton, Bunbury, Albany and Esperance are also benefitting from the increase cruise line activity. Demographics of Workforce Size and Distribution The Ports Legislation Amendment Act 2014 was passed by Parliament during the 2013/14 financial year and seven of the existing regional port authorities have been consolidated into Logistics Industries Environmental Scan 2015 Page 3

7 four new port authorities. From 1 July 2014, the Pilbara Ports Authority took over the roles of the Dampier and Port Hedland Port Authorities, the Geraldton Port Authority was reconstituted as the Mid West Ports Authority and the Broome Port Authority reconstituted as the Kimberley Ports Authority. The port authorities of Albany, Bunbury and Esperance were amalgamated on 1 October 2014 under the newly established Southern Ports Authority. 15. The Port of Fremantle is Western Australia s largest and busiest general cargo port, operating both an Inner and Outer Harbour. Fremantle Port Authority (FPA) experienced strong growth in trade for 2012/13, with total throughput increasing 12.2 per cent to a record 31.7 million tonnes (Mt). Total imports and exports increased by 0.5 per cent and 23.1 per cent respectively. 16 Approximately 40% of activity in the offshore marine (oil and gas) sector is based in WA. The sector employs an estimated 2,200 staff hired directly to the vessels operating in the area and supports more than 10,000 staff in affiliated areas. 17 WA is now the largest employer by State of marine transport professionals, followed by Queensland. WA employs the second highest number of deck and fishing hands with Queensland employing the highest number. 18 This is due to the increase in activity in the offshore oil and gas sector. Pearling has been a major industry of the Kimberley for over a century, when naturally occurring mother of pearl shell was sought after for the manufacture of clothing buttons. The cultured pearl industry operates from Broome to Darwin and has historically been a major provider of regional employment opportunities. The Global Financial Crisis in 2008/09 impacted this industry substantially and present reports estimate that at least 50% of the pearling industry is in standby mode, awaiting improved economic conditions. 19 Employment The severe reduction in the movement of Australian flagged ships in and out of Australian waters and the significant increase in wages growth have resulted in less on-board places for the training of seafarers, making it difficult to train workers. There is a general shortage of workers in the industry due to a previous lack of commitment from the industry to train; an ageing workforce and a significant increase in the work available. 20 Skilled local workers are also being sourced by other states and countries. This applies particularly to more highly skilled occupations such as marine engineers, marine pilots and ships captains, where competition is at a premium for the highest quality workers. 21 The increased activity in the oil and gas sector has also seen a shift of focus in the maritime workforce, with fewer deckhands working in the fishing sector, especially crayfishing. This trend is expected to continue, due to the number of new oil and gas projects coming on line in the next couple of years and the restrictions regarding the size of catches which have been placed on the fishing sector by the Government. 22 To attract younger workers, industry needs to provide time at sea, but limited space on boats makes this difficult. Although 16 year olds can go to sea they are not permitted to share a cabin, with 18 years the preferred age. Cadets who fund their own training to get the first ticket are almost guaranteed to be next ticket funded The following graph shows the percentage of full-time and part-time workers involved in water transport. As can be seen, most workers in this sector are full-time. Logistics Industries Environmental Scan 2015 Page 4

8 Thousands Maritime Graph 1 Full-time and part-time workers in Maritime 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Full Time Part Time Source: ABS Cat The following graph shows a comparison in the employment growth in two selected occupations between 1991 and 2015 by quarter. The spike in the number of marine transport professionals that occurred in late 2013 may be due to the commencement of a number of projects that were previously in the construction phase. Graph 2 Employment growth in select Maritime occupations, by quarter Marine Transport Professionals Deck and Fishing Hands Source : ABS Labour Force, Australia, Detailed, Quarterly, May 2015 Logistics Industries Environmental Scan 2015 Page 5

9 24-Jan 21-Feb 21-Mar 18-Apr 16-May 13-Jun 11-Jul 08-Aug 05-Sep 03-Oct 31-Oct 28-Nov 26-Dec 23-Jan 20-Feb 20-Mar 17-Apr 15-May Number of Vacancies % of Total Maritime The following graph shows the composition of the Maritime workforce by employer, employee and self employed workers. As can be seen the industry has a very high number of employees and few employers and self employed workers. Graph 3 Composition of Maritime workforce 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Employee Employer Self-Employed Source : ABS Labour Force, Australia, Detailed, Quarterly, May 2015 The figure below depicts online job advertisements for a selected group of maritime occupations in WA. Job listings were taken from seek.com.au. Graph 4 Job vacancies in Maritime per four-week interval ( ) Marine Superintendent Deckhand Marine Engineer Ship Master Source: seek.com Logistics Industries Environmental Scan 2015 Page 6

10 Thousands Maritime Age Profile The ageing of the seafarer workforce is a significant issue, with the average age being 44 years. 24 For deckhands the average age is 52 years and marine transport professionals 50 years. 25 This compares with the average of 39 years for the Australian workforce overall. 26 Approximately 42 per cent of the workforce is aged 45 years and older. 27 The first big influx of new marine transport professionals does not occur until they are in their mid 20s. This is due in part to the difficulty in entry for younger people, but can also be attributed to the industry s perception of a need for a more mature worker who is prepared to spend long periods at sea. The age profile can only be addressed by a substantial increase in training of new entrants, especially in technical occupations. Training of engineers is costly, especially if they leave a company on completion of their training for more lucrative opportunities. It is envisaged that the new national system will enable workers to move between vessels and up the career ladder with more ease, so younger deck and fishing hands may be able to take up some of the vacancies. 28 Gender The maritime sector is a male dominated industry, with approximately 78 per cent of workers being male. 29 Amongst deckhands there is approximately 96 per cent male dominance, with 97 per cent for marine transport professionals, which include Master Fisher, Ship s Master, Ship s Officer and Ship s Surveyor. 30 Of all the maritime occupations, Ship s Engineer has the least female participation, at less than one per cent. 31 This stems from a long history of men at sea, with women not entering many maritime professions until the last few decades, when accommodation on vessels became more conducive to a female presence. 32 The following graph shows the number of part time and full time workers by sex. As can be seen the majority of male maritime workers are full time workers with a low percentage of part time workers, whereas the difference between the number of full and part time female workers has much less differentiation. Graph 6 Number of Maritime workers, full and part time, by sex Part Time Males Part Time Females Full Time Females Full Time Males Source : ABS Labour Force, Australia, Detailed, Quarterly, May 2015 Logistics Industries Environmental Scan 2015 Page 7

11 Qualifications and Training As a highly regulated industry, training is linked to regulatory requirements and not necessarily qualifications, so many workers are not given the opportunity to complete whole qualifications. However, with changes to regulatory requirements instigated by AMSA, all seafarer s tickets will now be aligned to a Training Package qualification. 33 The MAR Maritime Training Package was endorsed in October It was restructured to align with the National Skills Standards Council s New Standards for Training Packages. A Diploma of Maritime Operations (Marine Engineering Class 3 Near Coastal) was developed and incorporated in MAR. Five skill sets were developed to align with AMSA short courses. 34 Educational Attainment Statistics provided by the TLISC indicate that 36 per cent of workers in this industry have no post school qualifications; 26 per cent have certificate qualifications; 23 per cent have diploma or advanced diploma qualifications and 16 per cent have tertiary qualifications. 35 National statistics indicate that 51 per cent of deckhands have no post school qualifications, whilst 19 per cent have Certificate III/IV qualifications and 29 per cent have diploma qualifications. 66 per cent of marine transport professionals have diploma or degree qualifications whilst 21 per cent have certificate level qualifications. 36 Government Policy Shipping Reforms The Federal Government s shipping reforms are aimed to make the Australian shipping industry more internationally competitive and allow Australian shipping companies to compete on international routes. They will also reform and revitalise coastal shipping in Australia to create a competitive environment that s attractive to investors. It is also expected that the reforms will lead to an increase in the number of Australian flagged ships. 37 Stronger Shipping for a Stronger Economy delivers a reform package that positions the Australian shipping industry to take advantage of the opportunities provided by the burgeoning export market and increased domestic transport task, and comprises four key elements: Tax reforms to remove barriers to investment in Australian shipping and to foster the global competitiveness of the shipping industry; A strengthened and simplified regulatory framework with a transparent licensing regime supported by clearly stated objectives; The establishment of an Australian International Shipping Register (AISR) to encourage Australian companies to participate in the international trades; Establishment of a Maritime Workforce Development Forum to progress key maritime skills and training priorities. 38 Logistics Industries Environmental Scan 2015 Page 8

12 National Maritime Regulator In July 2013, the Australian Maritime Safety Authority (AMSA) became the National Regulator for commercial vessel safety in Australian Waters. The National Law replaced state and territory laws governing the operational safety of domestic commercial vessels and ensures that standards, rules and subordinate legislation such as regulations and Marine Orders are applied consistently around the country. 39 The commencement date brings to fruition the decision made by Council of Australian Governments (COAG) Ministers in August 2011 to take a national approach to marine safety regulation. The National Law is also designed to apply the National Standard for Commercial Vessels (NSCV) throughout Australia. The NSCV is a set of standards covering commercial vessel operation, construction and crew qualifications developed by State and Territory transport agencies and agreed by Transport Ministers. The NSCV will be implemented through subordinate legislation made under the National Law. 40 The Navigation Act 2012 also commenced on 1 July This Act modernises the century old Navigation Act 1912, providing the maritime industry with a clear, transparent and flexible maritime safety regime. 41 Regulatory Requirements Maritime crews operating in international waters (eg crew on international cargo ships) are regulated by the Australian Maritime Safety Authority which administers the Seafarers Training, Certification and Watchkeeping Code (STCW 95). Marine crew operating in coastal waters (eg ferries, charter and fishing) are regulated by the Department of Transport (Commercial Vessel Safety Branch) in accordance with the United Shipping Laws (USL) Code. Marine crew operating in the offshore oil and gas industry (eg tugs, support vessels, barges, rigs etc) are primarily regulated by: Australian Maritime Safety Authority (primary regulator) Department of Mines and Petroleum Department of Transport (Commercial Vessel Safety Branch) All marine crew working in port are also regulated by WorkSafe WA. Globalisation Skilled personnel in marine occupations are being attracted to overseas maritime operators, creating a training demand on top of projected employment growth. There has been an increase in international seaborne trade. Australia s increasing reliance on oil and other imports has increased maritime trade. Logistics Industries Environmental Scan 2015 Page 9

13 Technological The trend is towards larger horsepower vessels with more complex navigation and control technology, requiring higher-level skills and upskilling of existing personnel. Automation of ports has improved productivity, but technology cannot replace some essential functions. The workforce will need to be able to operate technology while remaining appropriately skilled to deal with increasing throughput. 42 The increased use of dynamic positioning (DP), a computer-controlled system to automatically maintain a vessel s position, particularly in the offshore oil industry, requires deck officers to have a DP ticket which involves a minimum time on a vessel, plus completion of a relevant course that can take between 6 and 12 months. 43 Sustainability Ships are the least energy intensive of all the transport modes: shipping currently contributes just 4% of the greenhouse emissions from the Australian freight transport system. 44 The shipping industry has high fuel efficiency and low greenhouse gas emissions on a tonne per kilometre basis. The cost of maintaining shipping lanes is negligible. Economic Drivers Economic drivers include the cost of fuel, costs and staffing related to compliance with regulatory requirements. The annual domestic shipping task has increased to an estimated 26.6% by The increasing demand for shipping services, especially connected to the mining sector, will continue to push the need for a strong industry and have an impact on costs. There is a critical seafarer labour shortage with the potential to disrupt the price and labour and development of Australia s energy resources. There is evidence that the existing pool of skilled workers is not sufficient to handle the magnitude of expansion in port facilities and cargo throughput over the next 10 years. Competition for limited skills has resulted in employee poaching and inflated market wages to attract labour. 45 Regional Activity Much of the activity in the maritime sector occurs throughout the regional ports and as a result of the offshore oil and gas activity, which includes the following: North West Shelf the State s largest hydrocarbon export project, operated by Woodside. Woodside Pluto project processing gas from the Pluto and Xena gas fields. This is now an operating field requiring fewer marine personnel. Gorgon Project on schedule to produce and export LNG at its processing plant on Barrow Island. The start-up of the gas plant and delivery of the first LNG cargo is planned for late The project is entering the commissioning phase, which will see a wind-down of vessels over the next five to six months, however it is likely that a cargo vessel will be introduced, providing opportunities to train. Logistics Industries Environmental Scan 2015 Page 10

14 Julimar Development Project Development of the Julimar and Brunello natural gas fields in the Carnarvon Basin, off the WA coast are two of Apache s largest gas discoveries. The first production is expected in Ownership of the Project has now transferred to Woodside Petroleum. 47 Wheatstone Project LNG and gas project developed by Chevron Australia, and supplied from the Wheatstone and large off-shore gas fields, is under construction and now 60% complete. 48 Ichthys Gas Field approximately 440 km north of Broome and 800 km south west of Darwin. It covers an area of around 800 square kilometres in water averaging depths of around 250 metres and represents the largest discovery of hydrocarbon liquids in Australia in 40 years. The Ichthys LNG project currently under construction is ranked among the most significant oil and gas projects in the world. It is effectively three mega-projects rolled into one, involving some of the largest offshore facilities in the industry, a state-of-the-art onshore processing facility and an 889 km pipeline uniting them for an operational life of at least 40 years. 49 Whilst the project is based in the Northern Territory, as with all oil and gas projects the majority of the companies are Perth based. 50 The massive port activity expected to occur over the next five years will also impact heavily on the sector. As capacity increases at the ports, more maritime workers will be required to service it. Social Impact When compared to other industries, maritime workers experience the greatest impact on their lives due to the long periods of time at sea, unsocial working hours, and remote operating locations, especially in the oil and gas sector. This can result in feelings of isolation and a lack of communication. Many companies have reduced time away and offered more rotations to ensure family lives are not as disadvantaged as they were in the past, where it was quite usual for a mariner to be at sea for 12 months or more. Rotations now tend to be discussed in terms of weeks rather than months, which has made the work more attractive and less impacting. Communications have also been improved with Wi-Fi and internet cafes on a number of ships, as well as allocated telephone time. 51 Occupations in Demand Master Fisher* Ship s Engineer* Ship s Master* Ship s Officer* *On Skilled Priority Occupation List Logistics Industries Environmental Scan 2015 Page 11

15 Reference End Notes 1 Stronger Shipping for a Stronger Economy, Department of Infrastructure and Transport 2 Stronger Shipping for a Stronger Economy, Department of Infrastructure and Transport 3 Public Transport Authority Annual Report National Transport Commission website 5 National Transport Commission website 6 Industry consultation 7 Ports Handbook Western Australia 2014, Department of Transport 8 Ports Handbook Western Australia 2013, Department of Transport 9 Ports Handbook Western Australia 2014, Department of Transport 10 Australian Maritime Workforce Development Strategy, Federal Department of Infrastructure 11 Transport & Logistics Industry Skills Council website, 12 Industry consultation 13 TLISC Environmental Scan Ports Handbook Western Australia 2014, Department of Transport 15 Ports Handbook Western Australia 2014, Department of Transport 16 Department of Transport, Ports Handbook Western Australia Industry consultation 18 Australian Government (2013) Job Outlook 19 Regional Plan, Regional Development Australia, Kimberley Industry consultation 21 Industry consultation 22 Industry consultation 23 Industry consultation 24 The Australian Maritime Census January 2013, Department of Infrastructure and Transport 25 Job Outlook Census of Population and Housing 27 Transport & Logistics Industry Skills Council 2013 Environmental Scan 28 Industry consultation Census of Population and Housing 30 Job Outlook 31 The Australian Maritime Census January 2013, Department of Infrastructure and Transport 32 Industry consultation 33 Australian Maritime Safety Authority 34 TLISC E-scan Transport and Logistics Industry Skills Council 2013 Environmental Scan 36 Australian Government (2015) Job Outlook 37 Stronger Shipping for a Stronger Economy, Department of Infrastructure and Transport 38 Stronger Shipping for a Stronger Economy, Department of Infrastructure and Transport 39 Department of Infrastructure and Transport, National Maritime Safety Regulator, website: 40 Department of Infrastructure and Transport, National Maritime Safety Regulator, website: 41 AMSA website 42 TLISC E-scan Industry consultation 44 TLISC 45 TLISC 46 Chevron Australia website 47 Offshoretechnology.com 48 Chevron Australia website 49 Inpex website 50 Industry consultation, March Industry Stakeholder Consultation Logistics Industries Environmental Scan 2015 Page 12