Container costs: ACCC report highlights impact of shipping crisis

Container freight continues to be plagued by a global supply chain crisis, with the cost of delays outlined in a recent watchdog report.

Freight rates on key global trade routes are about seven times higher than this time last year a report has found, as producers across Australia gear up to harvest grain for export.

It comes as Australia’s leading container terminal stevedore DP World Australia recently announced terminal carrier access increases for Melbourne, Sydney, and Brisbane terminals in the new year, adding costs to an already strained freight system.

According to Australian Competition and Consumer Commission container stevedoring report, the S & P Global Platts container index — which measures the weighted average value across key container assessments globally — had risen from about US$1000 per 40-foot equivalent units in April last year to a peak of about US$7500 in August this year, an increase of 750 per cent.

APL Houston container ship being loaded at Webb Dock, Melbourne earlier this month. Container shipping continues to be plagued by costly delays across the globe. Picture: Peter Hemphill

The report also showed average idle times at Port Botany in NSW increased from 11.9 hours before the pandemic to more than 21 hours in 2020-21.

ACCC chair Rod Sims said prior to the pandemic, the shipping sector “would have likely been able to manage such a surge in containerised demand”, but destabilisation of almost all parts of the supply chain has left the industry struggling to cope.

“The margins of Australian importers and exporters are being squeezed, as they are all around the world, and the current situation is very challenging for businesses that rely on container freight,” Mr Sims said.

Freight Trade Alliance director Paul Zalai said recent changes to terminal access charges and minimal notifications could be “crippling”.

“In very simple terms, Freight Trade Alliance and Australian Peak Shippers Association is of the view shipping lines should compete in line with normal competition law faced by others in Australian commerce,” Mr Zalai said.

“If the Government determines a need for special ongoing protections to shipping lines, it is recommended this be overseen by a federal maritime regulator with a mandate to ensure minimum shipping services are provided ensuring essential export access to market.”

National Farmers’ Federation chief executive Tony Mahar said it was time for governments to take the shipping crisis “seriously”.

National Farmers' Federation CEO Tony Mahar has called for Australian governments to take notice of the crisis, which will affect farmers. Picture: AAP Image/Lukas Coch

“The NFF has been calling for the repeal of ‘Part X’ from our competition laws – which gives the shipping lines a free pass to collaborate on pricing, capacity and schedules,” Mr Maher said.

“With a bumper winter crop being harvested at the moment, farmers are nervous about how the dysfunction at our ports might capsize a promising season.

“Farmers export 70 per of what we grow. If we can’t get our produce to overseas customers on time, they’ll simply look elsewhere. It leaves us in a really precarious position.”