The Australian Consumer and Competition Commission (ACCC) will join its British, American, Canadian and New Zealand counterparts to prevent potential collusion in the supply chain industry.
Prime Minister Scott Morrison called on world leaders – in a speech at the latest World Economic Forum – to form new partnerships between countries, governments, and businesses, to strengthen global supply chains.
Demand for shipping containers worldwide is at an all-time high. The pandemic has driven the surge of import cargo, restricted shipping capacity and poor operational performance in many key international ports.
This has caused significant increases in freight rates, an escalation of surcharges and services to be at an all-time low in terms of reliability.
Paul Zalai, the Director of the Freight & Trade Alliance (FTA) says he welcomes the announcement.
“We continue to provide evidence of prejudicial shipping line practices, surcharges and freight rate increases,” Paul says. “Further investigation is essential as one thing is for certain; we are operating in a shipping line market without genuine competitive tension.”
“The collaboration between governments is a tremendous starting point as one nation alone cannot oversee the conduct of foreign-owned shipping lines and examine the full conduct of their powerful alliance activities,” he adds.
In Australia, exporters are fighting over equipment and delivering goods to overseas markets, the FTA says. Importers are struggling to secure a regular supply which is resulting in onshore stockpiling and increasing inflation.
In contrast, foreign-owned shipping lines are reporting multi-billion-dollar profits. Many are using their new fortunes to invest in strategic vertical integration supply chains.
Some are refusing to enter contractual agreements with third-party freight forwarders. They are leaving exporters and importers at their mercy as “price-takers.”
“We still have zero tolerance for unscrupulous businesses using COVID as an opportunity for cartel conduct, such as non-essential collusion between competitors or anti-competitive behaviour,” Anna Rawlings, New Zealand’s Commission Chair says.
“The international working group will strengthen our continued efforts to deter and penalise cartel conduct,” she adds.
The FTA and the Australian Peak Shippers Association provided a detailed submission to the Productivity Commission in response to the current independent review into long-term structural issues affecting Australia’s maritime logistics system’s productivity.
For more information on the FTA and the APSA, click here.
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