Ship to sure: Australian Industry Group urges maritime law reform

Businesses have called for reform to bring greater competition among shipping lines using Australian ports.

Businesses have called for reform of coastal shipping rules. Picture: Mark Stewart

Australian Industry Group chief executive Innes Willox says the country’s laws should be amended to encourage competition among international shipping lines to increase transport options for business, cut freight costs and reduce reliance on land transport.

It comes after businesses raised concerns about regulation of Australia’s maritime sector aimed at propping up the floundering domestic fleet, which they blamed for significantly raising the cost of shipping products from one Australian port to another.

They say cabotage rules and the Coastal Trading Act have led to decreased competition and international cargo companies applying surcharges to ship cargo between Australian ports.

It has contributed to a situation where moving freight from one Australian state to another can be only marginally more expensive than sending a product overseas and back again on the same ship.

Mr Willox said existing regulations were hurting businesses and increasing costs for consumers.

“A lack of competition in parts of the maritime logistics system raises costs for Australian consumers, increasing costs for business and ultimately contributing to the current cost-of-living crisis,” Mr Willox said.

“Australia is and must be a trading nation with strong links to our trading partners that don’t drive up costs in our domestic market.

“Australia is at the end of the global logistics line. We need to ensure that companies are financially motivated to bring more shipping services to our coastal shipping market, to increase options for shippers, reduce reliance on land transportation and reduce costs overall.”

Mr Willox argued in favour of repealing part of the Competition and Consumer Act that permits liner shipping operators to enter into commercial agreements with one another – such as freight rates and cargo quantities – without risk of breaching competition laws.

“The Productivity Commission has previously endorsed AI Group’s recommendation to repeal Part X of the Competition and Consumer Act 2010, which will bring shipping line services into line with other competition laws in Australia,” he said.

The Maritime Union of Australia and Maritime Industry Australia Ltd, which represents the domestic maritime sector, say the Coastal Trading Act is not to blame for the cost differentials raised by businesses.

“When comparing the costs of shipping containerised cargo between Australian ports and between Australian and inter­national ports, particularly Chinese ports, there are many systemic market factors to consider, including container imbalance (movement of empty containers from net importer countries to net exporter countries),” MIAL chief executive Angela Gillham said.

Shipping Australia, which represents international liners, has called for the repeal of the CTA, introduced by Anthony Albanese as transport minister in 2012, saying the legislation has overseen a fall in coastally carried cargo.

They say firms are buying cheaper goods imported on international shipping rates because Australian manufacturers cannot compete on shipping costs.

Australia’s shipping fleet has fallen from 21 registered major trading ships in 2011 to nine.

Opposition Transport spokeswoman Bridget McKenzie said the Coastal Trading Act was failing to deliver on its ambition to help the struggling Australian maritime industry.

“Coastal shipping is failing under Anthony Albanese’s own laws,” Senator McKenzie said.

“Since his own policy co-written by the MUA became law, the number of Australian-flagged vessels has more than halved.

“When businesses are saying it’s cheaper to ship freight to New Zealand and back to avoid these laws, even a casual bystander would say something is not right.”