The operators of a fuel transport tanker berthed at Devonport, in Tasmania's north-west, have defended plans to replace the Australian crew with international workers.

The Alexander Spirit was due to leave Devonport on Thursday.

But the crew of 36 sailors in two 18-strong crews refused to set sail for Singapore after being told they were being made redundant.

They have filed an application for a hearing in Fair Work Australia.

Under Australian cabotage laws, ships operating in domestic waters must employ Australian workers, but Caltex is redeploying the ship to international routes.

The ship is no longer needed to transport fuel from its Brisbane refinery to other parts of Australia, Caltex spokesman said Sam Collyer.

"Clearly this is a tough decision," he said.

"As an Australian company we have to strive to compete against major global oil companies and commodities traders and we have to ensure that our supply chain for the situation we're in today, not what was the case seven years ago.

"There's no longer any fuel for that ship to move domestically so we're having to redeploy it to an international run which simply means it has to compete against the hundreds of other ships that are moving fuel from overseas.

"Every ship that's doing this task internationally, and we're talking hundreds of ships, every other ship is operating internationally and the arrangements are appropriate internationally so that includes the crew."

The Federal Government wants to repeal cabotage laws.