Most of the Left faction’s conveners had agreed before Friday’s meeting in Canberra not to put Senator Carr’s name forward for the post-election reshuffle.
Senator Carr’s Victorian Socialist Left faction fought a rearguard action to save him.
In a surprise move, Mr Shorten, a Right faction powerbroker, added two spots to the frontbench.
The downside is shadow ministers Senator Dastyari, from the NSW Right, and ACT MP Andrew Leigh, who is factionally unaligned, will be paid as backbenchers, as there is a limit of 30 positions which can be paid a shadow ministerial salary.
The move is a pay cut for Dr Leigh who was the shadow assistant treasurer.
There were three exits from the frontbench – Victorian MP David Feeney and NSW MP Sharon Bird, who were dumped, and Western Australia’s Gary Gray who retired at the election.
Mr Shorten remains leader with Tanya Plibersek his deputy, Penny Wong the Senate leader and Stephen Conroy her deputy.
The Labor leader will allocate the portfolios and decide on shadow parliamentary secretary roles over the weekend.
Two of Mr Shorten’s predecessors, Kim Beazley and Mark Latham, had 32-member frontbenches.
Mr Shorten told the 40-minute meeting the team would “lead the fight against the government in the parliament”, which would sit for only 27 days over the rest of the year.
“Mr Turnbull has announced the biggest cabinet since Whitlam but he has given us a parliamentary calendar worthy of Bill McMahon,” he said.
“During the election Mr Turnbull showed he was afraid of the Australian people – it’s clear now he is also afraid of the parliament.
“Most of all he is afraid of having all his good friends, his loyal colleagues and his enemies in the same place at the same time.”
The second deputy speaker will be Rob Mitchell, while the ballot for deputy Senate president, previously held by Senator Gavin Marshall, was deferred.
Chris Hayes was re-elected chief opposition whip, while Senator Jenny McAllister was elected the new chair of caucus.
Senator Marshall is expected to lose his deputy Senate president role, having created a stand-alone Socialist Left faction with Senator Carr separate to the national Left.
Senator Carr was a key figure in Mr Shorten winning the 2013 Labor leadership ballot, shifting a number of Left votes to his Victorian colleague.
He was also a close ally in a number of battles during last year’s ALP national conference.