Australian Watchdog Starts Probe Into Port Activity

The Australian Competition & Consumer Commission (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 behavior, 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 AU$25 (US$18.33) to AU$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.

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