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Australia urged to end ocean carriers' blanket competition exemption
A POLICY review panel is calling for the liner shipping industry's blanket exemption from competition laws to be removed and that the industry be subject to Australia's Competition and Consumer Act.
A draft report from the panel, which is conducting the government's competition policy review, said the Australian Competition & Consumer Commission (ACCC) should be given a power to grant block exemptions from competition law, including for the shipping industry.
According to the panel, the ACCC, in consultation with the industry, should block exempt conference agreements that coordinate scheduling and an exchange of capacity while allowing confidential individual service contracts, reported Lloyd's List.
However, such block exemptions would not allow a common conference tariff or a pooling of revenues or losses.
The panel added that individual authorisation should be available for other types of agreement that did not meet a minimum standard of pro-competitive features.
Alternatively, if a block exemption was not introduced, the panel added, it would be preferable to require conference agreements to seek authorisation by the ACCC on the basis of the "normal" net public benefit test.
In any event, the panel concluded that there should be a transition period of two years.
Shipping Australia, which represents overseas shipping companies active in Australia, stated that it was disappointed by the draft report.
"Part X currently provides both the certainty of levels of service that shippers require and the certainty that carriers need to decide to invest in providing ships on Australian routes," said Shipping Australia CEO Rod Nairn.
He added that there were at least 25 international shipping companies providing services to Australia and that he expected "this number will be reduced and competition will suffer under the proposed changes".
He added: 揟he current system is promoting competition, as evidenced by the most competitive shipping rates ever seen.
"It seems ludicrous for the panel to recommend so much extra bureaucracy and red tape in a philosophical quest to fix something that isn't broken."
A draft report from the panel, which is conducting the government's competition policy review, said the Australian Competition & Consumer Commission (ACCC) should be given a power to grant block exemptions from competition law, including for the shipping industry.
According to the panel, the ACCC, in consultation with the industry, should block exempt conference agreements that coordinate scheduling and an exchange of capacity while allowing confidential individual service contracts, reported Lloyd's List.
However, such block exemptions would not allow a common conference tariff or a pooling of revenues or losses.
The panel added that individual authorisation should be available for other types of agreement that did not meet a minimum standard of pro-competitive features.
Alternatively, if a block exemption was not introduced, the panel added, it would be preferable to require conference agreements to seek authorisation by the ACCC on the basis of the "normal" net public benefit test.
In any event, the panel concluded that there should be a transition period of two years.
Shipping Australia, which represents overseas shipping companies active in Australia, stated that it was disappointed by the draft report.
"Part X currently provides both the certainty of levels of service that shippers require and the certainty that carriers need to decide to invest in providing ships on Australian routes," said Shipping Australia CEO Rod Nairn.
He added that there were at least 25 international shipping companies providing services to Australia and that he expected "this number will be reduced and competition will suffer under the proposed changes".
He added: 揟he current system is promoting competition, as evidenced by the most competitive shipping rates ever seen.
"It seems ludicrous for the panel to recommend so much extra bureaucracy and red tape in a philosophical quest to fix something that isn't broken."
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