Shipping Australia is disappointed that the draft report released by the Competition Review Panel today has recommended removal of the existing shipping exemptions in Part X of the Competition and Consumer Act. Not one of the users or providers of shipping services in Australia recommended this outcome.
“Part X currently provides both the certainty of levels of service that shippers require and the certainty that carriers need to decide to invest in providing ships on Australian routes,” Shipping Australia CEO, Rod Nairn said. There are at least 25 international shipping companies providing services to Australia. “I expect that this number will reduce and competition will suffer under the proposed changes.
“The current system is promoting competition, as evidenced by the most competitive shipping rates ever seen. It seems ludicrous for the Panel to recommend so much extra bureaucracy and red tape in a philosophical quest to fix something that isn’t broken.”
On the positive side, at least the Panel has recognised that shipping requires special treatment and recommends the creation of a block exemption process.
Unfortunately, the proposed changes would bring uncertainty by replacing clear legislation with an, as yet, undefined block exemption process to be developed in consultation with the shipping industry, but no doubt driven by the dogma of the ACCC. Anything falling outside these unknown limits will require the full authorisation process, which even the Panel agrees, “might lead to unnecessary compliance costs”.
“This would clearly raise barriers to participation, reduce competition and increase shipping rates. Those shipping companies that can afford to remain in the Australian market may well be pleased,” Rod Nairn said.
“Shipping Australia will continue to provide constructive input to the Panel despite the fact that our previous submission seems to have been largely ignored.”
For additional information contact Rod Nairn, chief executive officer on 0449 902 457.
Shipping Australia is a peak national shipping association comprising 34 member shipping lines and shipping agents that would be involved with over 70 per cent of Australia’s container and car trade, over 60 per cent of our break bulk and bulk trades, and significant cruise ship and tug operations.