Governments team up to tackle shipping crisis

By Wayne Robinson | February 23, 2022

The ACCC joins similar agencies in the US, Canada, UK and New Zealand with a new focus on preventing anti-competitive behavior in global shipping.

Anti-competitive behavior: shipping crisis

All industries, including printing, are experiencing huge increases in shipping costs, as well as dramatically limited supply, and have loudly complained about the use of various shady practices, from ghost ships to onboarding vertical, which contribute to the problem.

In an Australian context, exporters compete for available equipment and the ability to reach key markets. Importers are failing to secure a steady supply, leading to the emergence of new onshore storage models and resulting inflationary pressures in the Australian economy.

At the same time, foreign shipping companies are proudly reporting multi-billion dollar profits, with many using their newfound wealth to make strategic investments in the vertical integration supply chain, with some now refusing to enter into contractual agreements with third-party freight forwarders and leaving exporters and importers at their mercy as ‘price takers’ – companies that have no influence on prices.

Today, the Australian Competition and Consumer Commission (ACCC), the United States Department of Justice, the Canadian Competition Bureau, the New Zealand Commerce Commission and the UK Competition and Markets Authority are teaming up in a new task force, focused on sharing information to identify and prevent potentially anti-competitive behavior in the global sourcing and distribution of goods.

The move follows a speech by Australian Prime Minister Scott Morrison at the recent World Economic Forum, calling on world leaders to do more in the form of new partnerships between countries, governments and businesses to increase the resilience of supply chains. global supplies.

Global demand for containerized shipping capacity is at an all-time high, driven primarily by the pandemic-driven surge in cargo imports, constrained shipping capacity and poor operational performance at many key international ports. This has resulted in erratic positioning of container equipment, large spikes in freight rates, increased surcharges and rock bottom service reliability.

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) Secretariat welcome this news and will continue to provide evidence of harmful shipping company practices, surcharges and freight rate increases. He specifies: “Further investigation is essential because one thing is certain, we operate in a navigation market with no real competitive tension.

“Collaboration between governments is a tremendous starting point because a single nation cannot oversee the conduct of foreign shipping companies and scrutinize the complete conduct of their mighty alliance activities.”

FTA/APSA provided a detailed submission to the Productivity Commission in response to the ongoing independent review into long-term structural issues affecting the productivity of Australia’s maritime logistics system. Evidence from Australia’s leading trade advocacy bodies recognized the need for collaboration between government competition regulators and provided evidence of long-term trends that negatively impact the overall competitiveness of exporters and Australian importers.

The brief recommended the repeal of the current protections given to foreign-owned shipping companies under Part X of the Competition and Consumer Act and that the conduct of shipping companies be regulated by the Australian Competition and consumption, or the creation of a federal maritime regulator, to protect the viability of Australian traders.

The FTA/APSA submission also calls for minimum service levels and notification periods, infrastructure investment, regulation of container holding practices, waterfront industrial relations reform, implementation of biosafety reform priorities and an extension of short-term funding for aviation.

In response to the formation of the task force, Matthew Boswell, Canada’s Commissioner of Competition, said: “While the Competition Bureau has offered businesses the flexibility to contribute to legitimate pandemic response efforts that benefit Canadians, we want to be clear: we have zero tolerance for any attempt to use pandemic-related supply chain disruptions as cover for criminal collusion that harms consumers and Canada’s economy.

Similarly, New Zealand Commission President Anna Rawlings said: “We still have zero tolerance for unscrupulous companies using Covid as an opportunity for cartel behavior, such as non-essential collusion between competitors or a anti-competitive behavior. The international task force will reinforce our ongoing efforts to deter and sanction cartel behavior.

Michael Grenfell, Executive Director of Enforcement at the UK Competition and Markets Authority, added: “These are global issues best tackled together. With support and intelligence from partner agencies around the world, we can intervene and take enforcement action if we find evidence of anti-competitive behavior.