The MUA is calling for ACCC intervention on ‘shipping cartels’ extracting maximum profit from Australian ports
The Maritime Union of Australia (MUA) has raised concerns with ‘shipping cartels’ that are combining to extract maximum profit from Australian ports.
Amid a cost of living problem, the MUA says international freight companies are implementing further conglomerations of shipping lines into and out of Australia in order to sustain historically high international freight prices.
The MUA says this manipulation of shipping line capacity and scheduling will hurt consumers and businesses, as well as Australian port workers caught between powerful international shipping companies and “the failures of state government port privatisation that has delivered a fragmented container terminal sector at major Australian trading ports”.
For example, the MUA says Israeli shipping line Zim has recently agreed with Swiss shipping company MSC to pull 10 existing vessels out of the Australasian trade to join a Vessel Sharing Agreement with MSC.
“This is a prime example of persistent market failure in Australia’s supply chains, with Australian workers once again bearing the brunt of international cartel conduct on our coast and on our waterfront,” MUA national secretary and federal government strategic fleet shipping taskforce member Paddy Crumlin says.
Crumlin says this will do more than just strip further competition and capacity from the shipping liner market, as it will also punish wharfies employed at neighbouring terminals.
“Wharfies deserve long term, secure employment and consistent shifts and rosters around which they can build a life, but the manipulation of shipping capacity and timetables by a cartel of ship owners and managers risks throwing their lives into disarray as the terminal operators, who employ large workforces and maintain significant capital equipment, are forced to play catch-up,” MUA deputy secretary Warren Smith says.
“Multiple terminal operators work side by side ostensibly in competition with one another, but obsessed instead with attacking their workforce because there is little to differentiate them to their clients, the shipping cartels.”
The MUA has been campaigning for reform of the Australian Competition and Consumer Act to remove the exemption that allows international shipping companies to engage in cartel conduct.
“During COVID, this cartel behaviour took the form of rampant price gouging and scheduling and vessel allocation manipulations that created a false scarcity amidst the global pandemic,” Crumlin says.
“Now, they’re slashing sailings, combining fleets and leaving a massive vacuum behind to exert pressure once again on Australia’s supply chains and working people.”
The MUA says it has repeatedly drawn the attention of government, industry, small business and the community to the economic, social and sovereign risks associated with international shipping companies’ systematic abuse of our position at the far end of global supply chains.
The MUA has written repeatedly to the ACCC raising these concerns, especially with Part X of the Competition and Consumer Act 2010 which permits cartel conduct in Australia by international shipping companies.
The MUA says its proposed legislative amendments would strengthen compliance with industry service standards and force international container shipping companies to meet community expectations for supply chain security and eliminate blatant profiteering.