Shipping Australia has recently written to State, Territory, and Federal Ministers around the country calling for temporary cost relief from government-imposed charges and from fees, and fee hikes, by state owned entities.
We have offered to work with Australian governments to help them design a practical relief package.
Our aim is to help reduce the cost burdens on ships and shipping, and, ultimately, to reduce the inflationary effects of the Middle East Conflict on everyday Australian families. And, as our members repeatedly tell us, Australia is one of the higher-cost jurisdictions in the world.
We recall from our experiences during the COVID-era that congestion led to extremely high shipping costs. Those high costs led to skipped port calls, blank sailings, a re-configuring of routes, and cuts to service frequency.
During these uncertain and high-cost times, shipping needs to carefully manage operations so as to maintain supply chain stability. Easing of the government-imposed cost pressure would be a great help.
Astonishing cost increases
Since the beginning of the Middle East conflict on 28 February 2026, international shipping has experienced huge cost increases.
Ship operators often don’t own all of the ships they operate… they often hire them from an asset owner. The cost to hire a tanker to carry oil has increased in a range between ~17% to ~52.4% in the space of a few weeks
As of early April 2026, it can cost USD$105,000 a day (~AUD$148,600 a day) which is about AUD$103 a minute for a large tanker (a Very Large Crude Carrier) before the cost of bunkers (marine fuel for ships), stores, labour, insurance etc. By way of comparison, just before conflict began, the same tanker would have cost about USD$85,000 a day, about $20,000 a day cheaper. When that is multiplied by the number of days on charter, and the number of tankers, it compounds.
Meanwhile, fuel costs for all ship types have, likewise, massively increased.
Across Rotterdam, Fujairah and Houston, benchmark marine fuel prices on 31 March 2026 were on average about 114% above their 2025 average levels.
Ships consume a huge volume of fuel, but it is difficult to give any one number as consumption varies by ship type and speed. Fuel costs per tonne vary by region too.
Consider a 2,500 TEU container ship (a TEU is one container of 20-foot length) sailing at 22 knots (~41 km per hour). At the time of researching this article, a containership of that size and sailing at that speed around Australia would be consuming about $114,000 worth of fuel per day. On a roughly 25-day voyage around Australia, that would be about AUD$2.85 million in bunker costs alone.
It currently costs about USD$34,000 a day to hire a 2,500 TEU containership, so a 25-day trip around Australia could generate hire costs of about USD$850,000 (AUD$1.2 million).
That’s about AUD$3.42 million for a 25-day trip in fuel and hire for a 2,500 TEU containership to travel around Australia. To put that in context, that’s ~AUD$95 a minute for a trip around Australia, excluding other operational expenses and various government-charged fees.
National flagged fleets cannot stave off cost hikes and disruption
Shipping Australia’s CEO, Capt Melwyn Noronha, notes the recent policy commentary that asserts that Australian-flagged vessels would be beneficial in the current environment. Such policy advocacy is unsupported.
All ships transiting Hormuz are affected irrespective of the flag they fly at the stern or the nationality of the crew they carry. Australian ships would be affected.
And, as we know from our members, from statements by the Australian Federal Government, and from the fact that – despite everything – Australia is not running short of fuel (*nb: the regional fuel shortages appear to be caused by panic buying), that the transport of processed fuel by ship from Asia to Australia is not the issue.
The issue is a reduction in supply of crude while demand remains constant, which has caused buyers to bid up prices. That is a classic supply shock. That is not a shipping supply issue. That is the consequence of a geopolitical crisis.
Policies that have demonstrably failed to revitalise Australian shipping cannot be revamped anew to revitalise Australian shipping. It’s a statement of the obvious but, given that renewal of failed policies is being called for, it does need to be said.
Flagging ships under the Australian flag simply would not have provided any added protection or benefit in the current crisis. And in the future, when this crisis is over, such a policy would continue to deliver ongoing costs and burdens that would be greater than, and out of proportion to, any benefit.
A humanitarian crisis
Capt Noronha also takes a moment to reflect on the seafarers that are faced with the difficult and trying situation of transiting the Strait or being trapped in the Gulf.
“I’ve navigated vessels during tense times in war risk zones. I can appreciate what the seafarers are going through. They fear for their lives. They’re worried they might not see their families again. You think about all your life choices, and you start second-guessing yourself as to whether you’ve even chosen the right profession.
“And another thing. When I was on the ship, it really didn’t matter what nationality I was – whether I was Indian, or Filipino, or Australian, or anything else. It was the same for the ship too. It didn’t matter what flag we flew. We were all targets. We were all at risk.”
Capt Noronha expressed a hope that all the trapped ships are able to leave the Gulf and that seafarers that are due, or overdue, to finish their contract can go home to their families.
