Following the United States, Australia launches investigation into "sky-high freight costs"

The Australian Competition and Consumer Commission ( ACCC) is investigating alleged price gouging by shipping companies and port operators, following similar actions by other countries.

ACCC Chairman Rod Sims said the regulator is investigating whether anti-competitive behavior has led to higher prices in the container shipping industry. The ACCC will first investigate port operators, followed by carrier pricing. "Is there a violation? Is there no violation? We will get to the bottom of it."

Australian business executives have been calling for regulators to oversee the shipping industry. "All we need is some level of regulation to ensure that pricing here is not artificially inflated, and that there are adequate safeguards to ensure that surcharges are reasonable," one executive said.

However, Australian Shipping, an organization representing the local shipping industry, denied that global shipping companies were engaging in price gouging. However, the organization also said it welcomed the investigation. The head of the Australian shipping industry said that the ACCC's investigation was a good move. "We welcome the investigation because it will show that the current problems are caused by normal market mechanisms and bottlenecks in the supply chain," he said.

Mr Sims said the ACCC's annual handling monitoring report, due to be released in November, would look at the issue of transport and freight costs in more detail.

The ACCC's last container handling monitor found that despite the global pandemic causing the largest contraction in container volumes in a decade, port operators' revenues and profit margins rose in 2019-2020, mainly due to higher port access fees from stevedores. Total stevedore revenues rose to $1.4 billion, the highest level in 10 years. This suggests that it is not just freight rates, but also handling costs at ports that are soaring.

Before Australia took action, the United States also began to investigate and resolve the freight issue.

In early August, the US Federal Maritime Commission (FMC) announced that it would ask eight ocean carriers, including Hapag-Lloyd, to respond to the congestion-related surcharges they have implemented or announced, and would launch a rapid investigation. The White House also called on the Department of Justice to help the FMC investigate the issue of ocean carriers charging unreasonable fees, and named the monopolistic behavior of the three major alliances (2M, THE Alliance and Ocean Alliance).

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freight

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