PART X PROTECTIONS
Part X of the Competition and Consumer Act (CCA) provides broad exemptions from competition law for registered shipping lines to coordinate with each other in transporting cargo to, or from, Australia.
The provisions were first included in the Trade Practices Act 1974 to address a concern that Australia, being geographically remote, was not sufficiently attractive as a destination for international shipping lines.
The Australian Peak Shippers Association (APSA) is the designated peak shipper body granted status by the Federal Minister for Infrastructure and Transport under Part X of the CCA to represent the interests of Australian shippers generally in relation to liner cargo shipping services.
As members would be aware, Freight & Trade Alliance (FTA) has been the contracted secretariat to APSA since 1 January 2017.
In this capacity and in terms of administering the Part X process, I have personally assumed this responsibility over the last two years and have seen first-hand the weaknesses of the provisions and the resultant failure to provide any reasonable level of protection for exporters, importers or freight forwarders in terms of costs, capacity and the provision of minimum service levels.
SUPPORT FOR REPEAL - BUT WHAT SHOULD REPLACE IT?
Interestingly, it looks like we are agree with Shipping Australia on something and that is the need to repeal Part X – refer to their 'explainer' shipping could support a repeal of Part X and replacement by a block exemption
Where we differ, is what should replace it.
It is interesting to note that Shipping Australia see Part X as a 'bureaucratic' and 'expensive' way to provide an exemption.
Really? ... not from where I am sitting.
APSA certainly has not caused the registered shipping lines any cause of concern with prompt assessments and from what I can see, nor has the Department of Infrastructure who are extremely efficient administrators of the regulations. Not surprisingly, it appears as though Shipping Australian is calling for an even more streamlined process to legally co-ordinate shipping activities, still with protections, in the form of a Block Exemption.
In response to a the Australian Competition and Consumer Commission (ACCC) discussion paper titled the Proposed Class Exemption for Ocean Liner Shipping released on 3 December 2019, FTA/APSA offered a detailed response with 9 key recommendations – submission is available HERE.
WARNING AGAINST A BLOCK EXEMPTION
FTA/APSA warned against following the lead of the European Union Block Exemption and that should a variation be adopted in Australia, that it incorporate many safeguards and extra protections above and beyond the current Part X regime. To date, the ACCC has not progressed this review or responded to industry submissions.
Unfortunately, since this time we have witnessed further deterioration of conditions with a major shipping line declining contractual services to freight forwarders, regional exporters failing to receive sufficient equipment (especially 20ft containers), limited access to key trade lanes and freight costs reaching record highs.
Prompted by the FTA/APSA advocacy lead for the need of reform, the Federal Government announced on 10 December 2021 that the Productivity Commission will complete a formal examination of Australia's Maritime Logistics System.
In response and as a part of 8 recommendations to this review, FTA/APSA again recommended repeal of Part X, with retention of shipper collective bargaining provisions, leaving two options: foreign owned shipping lines to operate in line with competition laws faced by other businesses involved in Australian commerce; or, if deemed necessary for foreign owned shipping lines to have ongoing protections, expand the role of the ACCC (or introduce a federal maritime regulator) to administer processes to safeguard exporter and importer's interests, in particular, monitoring the appropriateness of shipping line (and contracted stevedore / empty container park) surcharges, fees and penalties.
RAMPING UP ADVOCACYFTA/APSA will continue its lead and focus on this key issue through media and ongoing advocacy.
We thank the DCN for publishing my 'industry opinion' article titled A call for broad ranging reform in the March edition of their magazine – refer HERE.
Furthermore, last week I was again privileged to speak Cassie McCulloch (Mornings, ABC Radio) in a broad ranging, live to air (13 minute) interview – refer HERE.
This coverage cannot be underestimated and has generated significant interest from both the Federal Government and shadow ministry resulting in further engagement with FTA/APSA representatives.
It is likely that we will hear a lot from both sides of parliament in the coming weeks leading up to the Federal election in terms of shipping competition, our reliance on foreign owned shipping lines and concepts pertaining to some form of sovereign shipping capabilities.
Paul Zalai - Director FTA | Secretariat APSA | Director GSF