Container shipping lines protection 'out of date'


Trade bodies call to ACCC for end to Part X competition law exemption

Container shipping lines protection 'out of date'
Container shipping rules are in the spotlight

 

With coronavirus roiling the nation’s supply chains and therefore way of life, another international issue with similar intrusions is being examined – container shipping regulation.

Specifically, the Australian Competition and Consumer Commission’s (ACCC’s) probe of Part X of the Consumer and Competition Act 2010 has seen it release in December the Proposed Class Exemption for Ocean Liner Shipping discussion paper and seek submissions.

And local trade and shipper bodies are calling for the exemption to end.

Aimed to trade off competition for efficiency and reliability, Part X has been a part of the regulatory landscape for half a century.

The ACCC seeks views on which aspects of Part X are:

  • in the public interest and could be included in a class exemption and why
  • detrimental to competition and should not be included in a class exemption and why.

Critics charge that the market has changed out of recognition since it was instituted, with container line consortia consolidation leading to a hugely unbalanced power relationship that is detrimental to the national interest.

Trucking industry representatives lay much of the blame for unregulated and unrestrained container access charges on stevedores being forced to create landside revenue streams, thereby boosting cost of living and trade pressures as the charges on exports and imports are passed on.

Trade bodies note that the experience in the European Union has been detrimental to shippers with trade bodies recently aggressively arguing against another four year extension of the liberal Consortia Block Exemption Regulation largely exempting lines of regular competition laws.


Read how the ACCC kicked off its review of Part X, here


Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) secretariat – part of one of two alliance with trucking interests opposed to access charges – argues Australia should follow New Zealand’s lead.

"In contrast, our New Zealand neighbours seem to have got it right," director Paul Zalai says.

"While accepting the need for shipping line consortia arrangements, the New Zealand competition authorities have introduced new statutory provisions adding rigour to their block exemption regime requiring evidence of benefits to shippers."

In a series of points, the first two echoing the 2015 Competition Policy Review, the Harper Review, FTA/APSA calls for:

  • repeal of Part X
  • a replacement block exemption regime with terms to be drawn as narrowly as possible to permit the desired activities to be operationalised
  • retain positive features of Part X into a block exemption regime including prescribed minimum levels of service
  • exclusion in a block exemption to fix price or surcharges
  • mandate incorporation of stevedore fees within shipping line contracts (negating stevedore-imposed Infrastructure Surcharges administered on the transport sector)
  • introduce a registration process administered by the ACCC
  • continuation of APSA as a designated peak industry body to support registration approval
  • alignment with the New Zealand block exemption regime to form a regional approach
  • practical legal instruments to allow shippers to negotiate collective freight contracts with shipping lines.

The submission endorsed the ACCC as being the appropriate entity to oversee shipping competition reform recognising its track record of strong compliance enforcement, noting last year’s criminal cartel prosecution against a major shipping line for price fixing in relation to an unregistered agreement, resulting in an order by the Federal Court to pay a fine of $34.5 million

"We commend the ACCC for commencing this necessary reform and we look forward to ongoing engagement to support our shippers compete in international markets, supported by appropriate, modernised regulation." Zalai says.

The discussion paper can be found here.

 

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