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Call to ban shipping group

WA EXPORTERS want a major shipping industry group to be outlawed under the Trade Practices Act because of a recent doubling of container shipping rates on Fremantle to South East Asia routes.

They say the sudden and unexpected rate rise may drive some of them out of business and has already cost the State a number of contracts.

The claims are made in a submission by the Western Australian Shippers’ Council to an ACCC enquiry into complaints against shipping lines operating under a discussion agreement registered under Part X of the Trade Practices Act.

The Australia-South East Asia Trade Facilitation Agreement includes 30 international liner ship-ping operators in its membership.

During a period of about nine months last year they increased base freight rates by more than 100 per cent for South East Asian trades and have announced further increases to take effect in September.

They claim the original rates were unsustainable and the recent increases were all preceded by the required period of notice.

The increases affect exporters in all States but the WA Shippers’ Council, which represents the exporters, says WA has been particularly hard hit because the only shipping lines that operate out of Fremantle are members of the TFA.

“Twelve months ago the freight rate to Singapore was about $400 per 20 foot dry box container,” the council’s executive officer Keith Seed told Business News.

“Today it is about $800 per container. Members have also reported shipping lines are adding new surcharges and say the level of service is dropping as well.

“I don’t want to name names but individual cases have been reported to me of vessels taking on extra cargo at eastern States’ ports, leaving insufficient space for booked cargo at Fremantle.

“There have also been reports of vessels bypassing Fremantle, particularly if the vessel’s captain has trimmed the ship in the East.

“A recent move by shipping lines has been to refuse to take bookings on certain vessels until the very last moment.

“All of this could affect our reputation as a reliable supplier. We already have a poor image in some markets because of our history of industrial relations problems. This sort of thing raises the same old concerns.”

Liner Shipping Services, which represents the shipping lines in the TFA, said freight rates were as high as $1,200 for a standard container in 1996/97 but dropped almost overnight because of excess capacity, new lines, low scrapping rates and weakening world trade.

“With economic recovery, world trade has grown dramatically, ship building rates are now more in line with demand and freight rates are going up – but they are going up worldwide,” Liner Shipping Services CEO Llew Russell said.

“The add-ons should have always been applied but weren’t in the bad times.

“We have heard complaints about service and it does need addressing.

“However, there has been an increase in capacity to Singapore recently and that has been working reasonably well.”

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