EXPERT OPINION: Understanding Part X in a disrupted market

Geopolitical disruption and liner shipping have always been uneasy companions. When conflict or instability affects a major trade corridor, the commercial consequences travel fast—rerouting decisions, insurance adjustments, and revised freight rates follow in short order. The Gulf cargo disruptions of recent years have been no different. What they have also done, however, is draw fresh attention to the regulatory framework that governs how Australian liner trades operate: specifically, sections 10.66 and 10.67 of Part X of the Competition and Consumer Act 2010 (Cth). For carriers, shippers, and freight intermediaries alike, understanding what those provisions do (and do not) require is a practical necessity.

Market disruption and the surcharge question

The commercial logic of surcharges in a disrupted market is not difficult to follow. When vessels are rerouted thousands of nautical miles to avoid a conflict zone, the costs are real and immediate: additional fuel, extended crew rotations, higher war risk insurance premiums, and repositioning expenses. Carriers operating under those conditions face legitimate pressure to recover costs that were not priced into contracted freight rates.

The complexity arises not from the existence of surcharges but from how they are structured, communicated, and timed across the industry. In a concentrated market like liner shipping, where a small number of major alliances serve most of the world’s containerised trade, it is not unusual for cost pressures to produce similar commercial responses across multiple operators at roughly the same time. That is the nature of a shared cost environment. The question that Part X exists to help answer is where the boundary sits between independent commercial responses and conduct that warrants closer examination.

What Sections 10.66 and 10.67 actually do

As explored in the companion piece to this article, Part X provides a conditional exemption framework for liner shipping—permitting registered conference and freight rate agreements to operate outside the cartel prohibitions that would otherwise apply under Part IV of the Act.

Sections 10.66 and 10.67 are the provisions that define the outer limits of that framework. Section 10.66 provides that parties to a registered conference agreement must not give effect to its provisions in a manner that causes substantial damage to Australian exporters or importers. Section 10.67 gives both the ACCC and affected parties standing to seek relief from the Federal Court where conduct, even conduct occurring within a registered agreement, is found to be causing that kind of harm. The provisions are not designed to second-guess every commercial decision made by a carrier in a volatile market. They are designed to ensure that the exemption regime does not become a vehicle for outcomes that the legislature never intended to protect.

It is also worth understanding what the provisions do not cover. Conduct that falls entirely outside the scope of a registered agreement, including unregistered variations or surcharges applied beyond the geographic or service terms of the registration, attracts no exemption at all and is assessed under the full weight of competition law. This is not a trap for the unwary so much as a reminder that the protection Part X offers is precisely bounded.

The broader regulatory picture

Sections 10.66 and 10.67 do not operate in isolation. The oversight architecture around them includes the Registrar of Liner Shipping, who maintains the public register of approved agreements and may refer arrangements to the ACCC for compliance review; the ACCC itself, which monitors conduct and has investigative and reporting powers; and the Minister, who holds reserve powers to revoke registration or impose conditions where an agreement is found to be operating against the public interest.

The significance of procedural requirements within this architecture should not be underestimated. The 30-day approval period that applies to newly registered agreements and variations is not administrative formality, it is the interval during which the conditional nature of the exemption is given practical effect. Its importance has been underscored in comparable jurisdictions: in March 2026, the United States Federal Maritime Commission unanimously declined requests from several major carriers to waive an equivalent 30-day notice requirement for Gulf-related surcharges, finding that carriers had not adequately demonstrated the link between their costs and the surcharges proposed. The principle that notice periods exist to protect the integrity of the regulatory bargain, not merely to slow down administration, is one that resonates across both frameworks.

There is also a shipper consultation dimension that is easy to overlook. Under section 10.41, parties to a registered conference agreement are required to negotiate with and provide information to designated shipper bodies. This obligation exists independently of whether any dispute has arisen. During periods of significant market disruption, when surcharge announcements are frequent and freight rate movements are material, that consultation channel is precisely the mechanism the Act contemplates being used.

A framework for both sides of the trade

It would be a mistake to read sections 10.66 and 10.67 as provisions aimed exclusively at protecting shippers from carriers. The provisions reflect a broader policy intent: that the liner shipping exemption should work for Australian trade as a whole, not merely for one side of the commercial relationship. Carriers who operate transparently within their registered agreements, who apply surcharges that are clearly connected to verifiable cost movements, and who engage constructively with shipper bodies are doing exactly what the Part X framework anticipates.

For shippers and freight intermediaries, the practical value of understanding these provisions lies less in their litigation potential and more in the framework they provide for structured engagement. Knowing that a carrier’s surcharge conduct may fall within or outside the scope of a registered agreement, and knowing that the ACCC and Registrar are available points of contact, changes the nature of a commercial conversation. It moves it from an adversarial impasse to a regulated dialogue.

Conclusion

Disrupted markets produce difficult commercial decisions, and liner shipping is no exception. The Gulf cargo situation has tested freight rate structures, challenged surcharge transparency, and placed the Part X framework under a degree of scrutiny it does not always receive in calmer conditions. Sections 10.66 and 10.67 are best understood not as enforcement provisions waiting to be triggered, but as the guardrails that give the entire Part X exemption its legitimacy. For operators on both sides of the liner trade, understanding where those guardrails sit is simply good practice.

This article is for general informational purposes and does not constitute legal advice. Operators should seek specialist competition law counsel for advice specific to their arrangements.