Shipping Australia: Liner Block Exemption Not a Way to Go

The Australian Government is pondering a block exemption for liner shipping to replace the existing Part X of the Competition and Consumer Act.

Shipping Australia said that it was encouraged by the government’s cautious approach to making changes to shipping competition regulation, but that it would have preferred for the block exemption recommendation to be dropped.

“Of course, we would have preferred the government to dismiss the recommendation and commit to retaining the current legislation, but at least there is recognition that further consultation is required before a final outcome is decided,” Shipping Australia CEO, Rod Nairn said.

According to the industry association, there are many areas where the granting of a block exemption can reduce unnecessary bureaucracy and red tape, “but shipping is a business that requires a high level of investment and therefore, the industry requires legislative certainty to justify that investment.”

“The retention of Part X is in the greater interest of Australian importers and exporters, it benefits all Australians. It has proven this by underpinning an unprecedented level of competition, providing Australian shippers and producers with internationally competitive freight rates on fast, fuel-efficient, modern vessels to our key export markets.

“Part X provides complete certainty, is light on red tape and encourages competition through the absence of barriers of entry,” Nairn said.

According to him, the parties involved need  to work through the full details of any proposed block exemption and any associated registration requirements.

“We need to have the opportunity to examine just how it can work and where it may fail, before any decision is taken to relinquish Part X,” he went on to say.

The association believes that shipping lines will be reluctant to accept the increased business risk of relying on a self-assessment causing them to re-evaluate the risk of doing business in Australia.

The consequence of that would mean fewer services, less competition and higher shipping rates, which is opposite to the government’s stated intent.

“While no block exemption can provide the certainty of the current Part X legislation, Shipping Australia is committed to working closely with the Government and the ACCC, to develop a comprehensive and workable block exemption that would encourage international shipping companies to continue to trade to and from Australia,” the association added.