ContainersPorts and LogisticsRegulatory

Australian consumer watchdog initiates liner and terminal investigations

It’s not just containerlines who are coming under scrutiny from regulators in this most chaotic year for global supply chains. Down Under, the Australian Competition and Consumer Commission (ACCC) is investigating whether port operators are involved in price gouging.

The ACCC has kicked off an investigation looking at both liner and port activity over the past year where shipping containers in and out of the country has risen by 300%. The twin track of the investigation – ports and carriers – will be watched by other regulators around the world carefully as many other nations are also looking into high supply chain costs at the moment. The ACCC has a history of tackling anti-competitive shipping behaviour, most notably in the car carrier segment.

“We’re going to look at to what extent this is a structural problem — due to the fact that you’ve got concentration in shipping, which has occurred a lot — or to what extent is it a short-term issue, due to the spikes in demand as people consume more goods and less services as Covid-19 interrupts the supply chain,” competition regulator Rod Sims told the Australian Broadcasting Corporation.

Rates to unload import containers in New South Wales have risen by fivefold over the past four years, from nearly A$25 ($18.33) to A$122 per container, according to data from the Container Transport Alliance.

“We welcome the investigation as it will show that the current issues are caused by normal market mechanisms and by bottlenecks in the supply chain,” said Melwyn Noronha, the CEO of shipowning lobby group Shipping Australia.

In a release today, Shipping Australia stated: “As far as we are aware, and to the best of our knowledge and belief, each ocean container shipping company makes its commercial decisions individually and in line with free market principles. Shipping Australia acknowledges that there has been an increase in the cost of containerised freight in recent months. This increase has happened because of normal and well-understood market mechanisms. However, there are other supply chain-related issues that need to be examined.”

Across the Tasman Sea, soaring freight charges are hampering exports from New Zealand, with calls growing for government intervention and the bolstering of the local shipping fleet.

Major investigations into the sky high container freight rate situation have been undertaken in many countries recently including China, the US, Vietnam and South Korea with India’s consumer watchdog latterly also coming under pressure to investigate.

Sam Chambers

Starting out with the Informa Group in 2000 in Hong Kong, Sam Chambers became editor of Maritime Asia magazine as well as East Asia Editor for the world’s oldest newspaper, Lloyd’s List. In 2005 he pursued a freelance career and wrote for a variety of titles including taking on the role of Asia Editor at Seatrade magazine and China correspondent for Supply Chain Asia. His work has also appeared in The Economist, The New York Times, The Sunday Times and The International Herald Tribune.
Back to top button