THE Freight and Trade Alliance and the Australian Peak Shippers Association have called for a new Federal regulator, along the lines of the US Federal Maritime Commission, to “facilitate open and competitive international trade while safeguarding the interests of Australian shippers (exporters, importers and freight forwarders)”.
They see this as an important move in the context of threats caused by “geopolitical tensions” causing serious disruption to international supply chains and jeopardising access to markets for Australian traders.
While the groups commend the Federal government for initiating the Productivity Commission’s Inquiry into Vulnerable Supply Chains, the FTA’s Paul Zalai said, “A well-regulated economy helps Australia to prosper – in terms of international trade, this needs serious consideration as market forces are failing to provide basic protections to critical sectors of commerce with downstream devastating effects being felt by retailers, manufacturers, farmers and rural communities”.
Mr Zalai said global demand for containerised shipping capacity is at an all-time high, primarily generated by the pandemic surge of import cargo.
“Limited supply of shipping services, erratic positioning of container equipment and poor performance in many key international ports is resulting in significant spikes in freight rates, escalation of surcharges and an all-time low in reliability of services.”
“There is no relief in sight in an environment of consolidation in shipping lines and stronger alliances creating significant barriers for new entrants into this global market, let alone successfully compete in a somewhat isolated Australian trade lane,” Mr Zalai said.
He said the new services are being introduced are insufficient to meet demand, leaving Australian exporters, importers and freight forwarders experiencing the effects of increased costs, rolled bookings and blank sailings.
In a detailed submission to the Productivity Commission, FTA/APSA and an alliance of peak industry associations have called for the creation of a new federal regulator to facilitate competitive international trade and to provide protections from the emergence of unreasonable pricing practices.
Associated recommendations include the need for a formal shipping competition review, a call for minimum service levels and regulation of Terminal Access Charges and container detention practices. The submission also made detailed reference to the need for waterfront industrial relations reform, implementation of Biosecurity priorities and continued financial relief measures for the air cargo sector.
“Australia has world class manufacturers and producers who are supported by skilled customs brokers and freight forwarders ready to take advantage of the opportunities created by free trade agreements and those economies recovering from COVID-19,” Mr Zalai said.
“These opportunities will not be fully realised while physical access to market and costs of trade are prohibitive.”