There has been a huge surge in demand for container transport due to increased spending on consumer goods during lockdowns, causing exorbitant rises in freight rates.
As a result, the Australian Competition and Consumer Commission (ACCC) has launched investigations into alleged price gouging by shipping lines and port operators as pressure on global supply chains continue.
“The ACCC has a continuing investigation into whether anti-competitive conduct has led to price increases in the container transport industry. It is a narrow investigation into specific alleged conduct and is not a broader investigation into pricing in the sector,” an ACCC spokesperson said in a statement shared with Appliance Retailer.
“We will, in addition, be reporting on stevedores and shipping costs in our annual stevedoring monitoring report due in November.”
Peak industry body, Shipping Australia welcomes the ACCC investigation into the current shipping environment.
“We welcome the investigation as it will show that the current issues are caused by normal market mechanics and by bottlenecks in the supply chain,” Shipping Australia CEO, Melwyn Noronha said.
Shipping Australia claims each ocean container shipping company makes its commercial decisions individually and in line with free market principles.
Acknowledging the increase in container freight costs in recent months, Shipping Australia says this has happened because of “normal and well-understood market mechanisms” but there are other supply chain-related issues that need to be examined.
The demand for goods, and therefore demand for transport of containerised goods, has outstripped the supply of shipping services. It is a basic principle of economics that where demand outpaces supply then there will be upward price pressure.
“We anticipate that a decrease in demand for, and a surge in the supply of, containerised transport will likely alleviate market conditions,” Noronha added.
Shipping Australia claims there is no need for government or regulatory intervention in the free-market shipping industries; however, port congestion and related supply issues need to be tackled either by ports or by regulators.
The National Transport Commission (NTC) confirmed it is aware of the ACCC investigation into Australia’s container freight supply chain.
In a statement supplied to Appliance Retailer, the NTC said, “The proposed national voluntary guidelines establish clear protocols for the notification and timely communication of charges levied on transport operators for access to pick up or drop off containers, and for the associated handling of containerised cargo.
“The ACCCs investigation and the NTCs role in the development of national voluntary guidelines for landside stevedore charges are independent of each other.”