Wednesday, September 19, 2018
Encounter Bay

In 2019 we will mark the 50th Anniversary of the arrival of the first oceangoing container ship, the Overseas Containers Limited (OCL) 27,000 gross ton, 1,900 twenty-foot equivalent units (teu) capacity Encounter Bay to the Australian coast.

This event introduced the beginning of the container revolution, not only to Australia but, eventually, to other major destinations around the world. Stemming from this revolution came the term ‘Globalisation’. Today, vast volumes of cargo of every description are transported around the world in containers between trading partners.

To give some idea of how containerisation has affected global trade in the past fifty years, the World Shipping Council’s statistics indicate that the top fifty container ports in the world handled approximately 445 million teu (loaded + empties) in 2015. In Australia, a total of 5 million teu, comprising 3.6 million full + 1.4 million empties, was handled in 2014/2015.

The size of container vessels has increased beyond imagination over this period. In 1969, the Encounter Bay with its capacity of 1,578 teus was looked upon as ‘huge’ when compared to the overall size and capacity of the average conventional vessel at the time. Today in 2017, Maersk, CGM CMA and MSC are introducing vessels onto the berth between Europe and Asia with individual capacities in excess of 20,000 teu!

But this revolution did not happen overnight. To gain a wider appreciation of the effect of this revolution on the trade between Europe and Australia, we need to look at its history.

1870 TO 1918
From 1870 onwards, two major developments affected the trade between Europe and Australia. Firstly, the opening of the Suez Canal which greatly reduced voyage times between opposite ends of the globe and, secondly, development of marine refrigeration which allowed safe and successful carriage of meat from Australia to Europe. During the first decade of the 1900s, Australia shipped approximately 42,600 tonnes of Beef, and 264,000 tonnes of mutton and lamb, to the United Kingdom.

By 1900, eleven British, one French and two German shipping lines were operating regular services between Europe and Australia. But the scramble by shipping lines to service this trade brought about its own problems. Chaotic scheduling of vessels and inconsistent rate-setting created difficulties for Australian shippers, who increasingly demanded regular and reliable services to ship their products to Europe. From this unsatisfactory situation emerged the first shipping conference to be formed in Australia, by fourteen lines already servicing this trade. On 17th July, 1912, the first meeting of the Oversea Shipping Representatives’ Association (OSRA) was held at the offices of P&O in Sydney.

In the same year, Australian exports to Britain/ Europe represented 79% in value of total exports from Australia. The remaining 21% went to USA, Canada, Japan and other Asian countries.

From the commencement of the First World War in 1914, the British Government continued to purchase Australian produce, particularly wool and wheat. However, although the Government had assumed control of merchant shipping, they did not have the power to direct shipowners. As a consequence, vessels that previously had been engaged in the Australia to Europe trade were switched to shorter, more profitable trade routes, such as trans-Atlantic. Less numerous and efficient ships were used on the Australian route, which led to the clogging up of wharves at the exporting ports.

Billy Hughes, who became Australia’s Prime Minister in 1915, visited Britain to persuade the Government to allocate more tonnage to lift Australian product. His efforts with both the Government and British shipowners came to naught, and Hughes immediately purchased fifteen British-built vessels which were registered under the name The Commonwealth Line.

1920S TO WORLD WAR II
By early 1923, Commonwealth Line, renamed The Australian Commonwealth Line, was already operating a total of 54 vessels. In the same year, Hughes was replaced as Prime Minister by Stanley Bruce who viewed the Line as a financial liability for the Federal Government, due to high crewing costs, as well as an unfair competitor to private shipowners.

In 1926, value of exports to Britain and Europe represented 69% of the total value of Australian exports. Two years later, the Bruce Government sold off Australian Commonwealth Line, including the sister-ships Esperance Bay, Hobsons Bay, Jervis Bay, Largs Bay and Moreton Bay. Some of these ship names were to reemerge forty years later with the advent of containerisation.

The vessels, each of 14,000 gt, had been built in Britain during the early 1920s, As well as cargo, they could also accommodate up to 700 passengers. All five were sold to White Star Line, thence to the Aberdeen Line. A year after the collapse of Aberdeen Line, in 1933, they were sold to Shaw Savill & Albion . In 1934, the Furness Group absorbed Shaw Savill.

In 1929, Australian Oversea Transport Association (AOTA) was formed to represent producers, exporters, wool buyers, importers and the OSRA member lines, who represented shipowners. AOTA was requested by the new Prime Minister, James Scullin, to provide him with proposals that would identify its future direction.

Read the rest of this article with additional pictures in Sea Breezes Magazine - February 2018 Issue
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