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Published: 24 Aug 2023
MARITIME UNION OF AUSTRALIA
25 AUGUST 2023
SHIPPING CARTELS COMBINE FORCES TO EXTRACT MAXIMUM PROFIT FROM AUSTRALIAN PORTS
Amidst a cost of living and inflation crisis caused by big businesses gouging maximum profit from Australian consumers while wages fail to keep pace with the cost of living, international freight cartels are implementing further conglomerations of shipping lines into and out of Australia so they can sustain historically high international freight prices.
This manipulation of shipping line capacity and scheduling will no doubt hurt consumers, businesses but also Australian port workers who are caught between powerful international shipping cartels and the failures of state government port privatisation that has delivered a fragmented, inefficient and unresponsive container terminal sector at Australia’s major trading ports.
Israeli shipping line Zim has recently entered into an arrangement with Swiss shipping behemoth MSC and will pull ten vessels from its existing fleet of ships out of the Australasian trade in order to join a Vessel Sharing Agreement with MSC.
“This is a prime example of persistent market failure in Australia’s supply chains, with Australian workers once again bearing the brunt of international cartel conduct on our coast and on our waterfront,” said Paddy Crumlin, the MUA’s National Secretary and a member of the Australian Federal Government’s Strategic Fleet Shipping Taskforce.
Not only will this further strip competition and capacity from the shipping liner market, but it will also punish wharfies employed at neighbouring terminals as the cargo of MSC ships is already contracted to terminal operator Patrick while Zim’s cargo was being handled by Hutchison Ports.
“Wharfies deserve long term, secure employment and consistent shifts and rosters around which they can build a life, but the manipulation of shipping capacity and timetables by a cartel of ship owners and managers risks throwing their lives into disarray as the terminal operators, who employ large workforces and maintain significant capital equipment, are forced to play catch-up,” said Warren Smith, Deputy Secretary of the Maritime Union of Australia.
“Multiple terminal operators work side by side ostensibly in competition with one another, but obsessed instead with attacking their workforce because there is little to differentiate them to their clients, the shipping cartels,” Smith added.
The Maritime Union of Australia has been campaigning for reform of the Australian Competition and Consumer Act to remove the exemption that allows international shipping companies to engage in cartel conduct.
“During COVID, this cartel behaviour took the form of rampant price gouging and scheduling and vessel allocation manipulations that created a false scarcity amidst the global pandemic. Now, they’re slashing sailings, combining fleets and leaving a massive vacuum behind to exert pressure once again on Australia’s supply chains and working people,” Mr Crumlin explained.
The Maritime Union of Australia has repeatedly drawn the attention of government, industry, small business and the community to the economic, social and sovereign risks associated with international shipping companies’ systematic abuse of our position at the far end of global supply chains.
The Union has written repeatedly to the ACCC raising these concerns, especially with Part X of the Competition and Consumer Act 2010 which permits cartel conduct in Australia by international shipping companies.
The MUA’s proposed legislative amendments would strengthen compliance with industry service standards and force international container shipping companies to meet community expectations for supply chain security and eliminate blatant profiteering.