FTA / APSA formal submission - Australian shipping competition reform

Saturday, February 29, 2020

FTA APSA joint response - ACCC Discussion Paper - Proposed Class Exemption for Ocean Liner Shipping.pdf
MEDIA RELEASE - repeal of Part X.pdf

Part X of the Consumer & Competition Act 2010 has evolved since first introduced in the Trade Practices Act 1974 providing broad exemptions from competition law for registered shipping lines to coordinate with each other in transporting cargo to, or from, Australia.

Shipping line market consolidation plus the emergence of stevedore-imposed Infrastructure Surcharges has resulted in supply chain costs rapidly increasing, exposing significant deficiencies in the effectiveness of Part X in being able to achieve basic shipper protections.

The Australian Competition and Consumer Commission (ACCC) has recognised a need for reform with the 3 December 2019 release of a discussion paper titled Proposed Class Exemption for Ocean Liner Shipping.

Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have prepared a formal joint submission recommending:
  • repeal of Part X,
  • a replacement block exemption regime with terms to be drawn as narrowly as possible to permit the desired activities to be operationalised,
  • retain positive features of Part X into a block exemption regime including prescribed minimum levels of service,
  • exclusion in a block exemption to fix price or surcharges,
  • mandate incorporation of stevedore fees within shipping line contracts (negating stevedore-imposed Infrastructure Surcharges administered on the transport sector),
  • introduce a registration process administered by the ACCC,
  • continuation of APSA as a designated peak industry body to support registration approval,
  • alignment with the New Zealand block exemption regime to form a regional approach, and
  • practical legal instruments to allow shippers to negotiate collective freight contracts with shipping lines.
Importantly the submission endorsed the ACCC as being the appropriate entity to oversee shipping competition reform recognising its track record of strong compliance enforcement, noting last year's criminal cartel prosecution against a major shipping line for price fixing in relation to an unregistered agreement, resulting in an order by the Federal Court to pay a fine of $34.5 million

We commend the ACCC for commencing this necessary reform and we look forward to ongoing engagement to support our shippers compete in international markets, supported by appropriate, modernised regulation.

FTA / APSA submission available HERE

FTA / APSA media release available HERE
Paul Zalai -  Director and Co-Founder, FTA / Secretariat, APSA