Australia’s Shipping System At Risk Of “Cartel Activity”: ACCC
ACCC Chairman Rod Sims wants competition laws to change, as the watchdog warns the country’s shipping system is is dire straits.
The Australian Competition and Consumer Commission’s annual container ports monitoring report notes that systemic change is needed, in the wake of pandemic-related bottlenecks, rising costs and demand, and increased need for products over services, during extended lockdowns.
“This represents a logistical nightmare for the industry,” the report notes.
“The once efficient major overseas ports have become a cause of severe congestion and delays. The shipping line schedules that worked like clockwork are out of sync.
“Shipping lines have deployed all their fleet but are unable to fully utilise their capacity as vessels are either trapped for long periods of time in port waiting queues or choose to skip ports altogether.”
Already, many shipping lines are choosing to bypass Australia completely, due to unworkable delays.
“There is an abundance of empty containers, but they are stuck in the wrong places. Shipping lines are finding it easier to build new containers rather than to evacuate the existing ones. The Australian empty container parks are full, but do not always have the food quality containers that many exporters need.”
The report notes that shipping companies can use Part X of the Competition and Consumer Act to artificially elevate freight rates in the future.
Or, as Sims put it in an interview with AFR: to “get together and engage in cartel activity”.