AFR - Shipping crisis will end when vaccinated people get to travel

As an important part of the Freight & Trade Alliance (FTA) and Australian Peak Shippers Association (APSA) advocacy for a Federal Government review on international shipping and logistics, we are delighted to advise our call for reform has today been reported  by two influential mainstream media outlets:
 
AUSTRALIAN FINANCIAL REVIEW – Shipping crisis will end when vaccinated people get to travel
 
The AFR made reference to the Container Shipping Market Review compiled by MDS Transmodal and the Global Shippers Forum (GSF) noting shipping lines' operating costs have barely moved over the past 18 months yet their earnings per container have substantially increased over the same time period. To balance the article, the AFR included a view from Shipping Australia with references from their commentary titled Ship operating costs up 773%, demand up, supply up, congestion up, shipper propaganda up.

Below is an extract from the AFR article:
 
But Paul Zalai, a director of the Global Shippers Forum and the Freight & Trade Alliance, said most of the big shipping lines either own their vessels or have them on long-term charter, so are immune to the recent surge in charter rates. "There is no doubting many ports around the world have suffered and continue to suffer from COVID lockdowns and working restrictions," Mr Zalai said.

"What needs to be questioned is how much of the chronic port congestion was originally caused by the mass cancellation then reinstatement of shipping services last year at the onset of the pandemic."

Danish shipping line AP Moller-Maersk reported record profits in the second quarter, citing higher freight rates and volumes for earnings increasing to $US3.6 billion from $US552 million a year earlier. While the company's container handling costs rose, partially due to congestion, the increase was only slight compared to a 75 per cent jump in second quarter revenues to $US9.8 billion, while profit margins rose to 39.7 per cent from 20.7 per cent a year earlier.

Mr Zalai sent a letter to trade and tourism minister Dan Tehan in early August suggesting the creation of a new federal regulator, similar to the US Federal Maritime Commission, to stop shipping lines capitalising on their market power. Mr Zalai told The Australian Financial Review that the federal government should review the competition protections given to foreign-owned shipping lines. "We do not want government interfering with price setting as we need these entities to be incentivised to continue to service Australian trade," he said.

"All we are asking is for these shipping lines to operate vessel sharing arrangements in line with laws faced by others in Australian commerce. If the government is sold on the need to give shipping lines continued exemptions from the Competition and Consumer Act, then we will clearly need a federal maritime regulator to oversee proceedings to safeguard Australian exporters and importers."

Full article HERE (AFR subscription required) 

THE LAND - Choked and gouged: story of NSW containerised grain exports
 
FTA / APSA partnered with The Land in a special investigation that found supply chain costs amounting to multiple extra charges in many areas for NSW grain farmers. Again, the FTA/APSA position remains consistent calling for a Federal Government review of international shipping and logistics practices.
 
Case studies available HERE (FTA/APSA MEMBER LOGIN REQUIRED)
 
Full special investigation article available HERE