The Australian Federal Government has launched an investigation into soaring container shipping costs that financial observers claim is creating inflationary pressures in the country's economy.
The Australian Competition & Consumer Commission (ACCC) revealed on Monday that it is investigating whether possible anti-competitive conduct by port operators has led to dramatic price rises.
The move follows a similar US investigation into soaring container freight costs launched earlier this year.
Australian competition regulator Rod Sims told local media that the investigation would initially focus on whether there has been a breach of competition laws in relation to landside handling of containers.
The ACCC would also look at the wider issue of shipping and freight costs.
"We're going to look at to what extent this is a structural problem — due to the fact that you've got concentration in shipping, which has occurred a lot — or to what extent is it a short-term issue, due to the spikes in demand as people consume more goods and less services as Covid-19 interrupts the supply chain," he told The Business.
Nic van der Reyden, a Sydney-based partner in the law firm Clyde & Co, told TradeWinds that the investigation was launched following active lobbying by industry bodies including the Australian Retailers Association and the Freight and Trade Alliance, which represents importers and exporters.
“It is not just the freight costs that have gone up. Terminal access and handling costs have gone up exponentially,” van der Reyden said.
The Australian Container Transport Alliance said the average fee to unload and import a container at a port in New South Wales has jumped by fivefold over the past four years, from nearly AUD25 ($18.4) per container in 2017 to AUD125 currently.
"The stevedore charges are impacting importers and exporters by hundreds of millions of dollars a year," Freight and Trade Alliance head Paul Zalai told ABC News.
Soaring costs
Stevedore tenants and terminal operators in Australia’s privatised ports have long denied they are price-gouging.
“The explanations they have given for rising costs in the past — increased tenancy and labour costs — are plausible," said van der Reyden.
But the lawyer believes that these explanations may not appease importers continuously being hit with new surcharges and rate increases.
Van der Reyden said he doubted that the recent increases were a result of any intentional collusion or rate fixing.
“There are ample examples of what happens to companies that do this in Australia. Corporates know how to tread carefully,” he explained.
Van der Reyden said the increased costs across the container sector were more likely to be a result of high charter rates, increasing newbuilding costs, bottlenecks in the supply chain and the extra costs involved with operating terminals under pandemic conditions.
The ACCC expects to release its report in November.
The organisation has previously shown itself to be quick to bare its teeth and prosecute companies found contravening Australia’s anti-competition legislation.
NYK, K-Line and Wallenius Wilhelmsen have all been hit in recent years with hefty fines after being found guilty of creating a cartel in Australia.
