ACCC Probes Shipping Freight Rates

Consumer Watchdog ACCC is examining international shipping and container costs which have risen some 300% in the past year, affecting all imported goods and hurting many Australian businesses.

The Australian Competition and Consumer Commission (ACCC) has opened an investigation into international container shipping and handling, as costs have risen some 300% in the wake of the pandemic.

The move has been welcomed by major retail groups, who believe the increase in container prices is not a “natural phenomenon” and would like to see some light shed on the apparent shortage of containers as well as skyrocketing freight costs.

ACCC CEO Rod Sims said the regulator was investigating the freight sector after a massive increase on pricing that shipping companies are blaming on disruptions to global supply lines caused by Covid.

They will look at to what extent this is a structural or long-term problem, or to what extent is it a short-term issue due to supply-and-demand, with people consuming more goods and less services as Covid-19 interrupts the supply chain.

Some observers in the trucking industry note that the local container-logistics cost hikes come on top of those due to the states allowing stevedores to open up an unregulated landside revenue stream. The ACCC has long viewed the latter as a logical function of states leasing ports to and protecting monopoly operators.

The latest level for the Drewry’s composite World Container Index – a barometer of international shipping charges – recorded the mean cost of a 40ft shipping container at US$10,083.84 (A$13,743) for 09 September 2021, up 309% on the same week in 2020. It is the 21st consecutive week of increases.

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