Edward Cranswick

Productivity Commission

Productivity Commission to examine maritime logistics efficiency

Prime Minister Scott Morrison has announced a Productivity Commission (PC) enquiry into the Australian maritime logistics system’s efficiency.

Speaking in a virtual address to the Australian Industry Group (AGI) on 30 November, the PM told the audience that the Treasurer will soon be releasing the terms of reference for the enquiry.

“This is not an enquiry that I see going on for a long time,” the PM said. “I want to see this back here by the middle of the year.”

The PM stated that the expected enquiry forms part of a broader push to address supply side issues to help the economy recover.

“[Having] supported our economy strongly on the demand side through the pandemic, our focus inevitably turns to the supply side levers as the economy recovers, because it’s those supply side levers that can have such a big impact on inflationary pressures on all Australians, whether mortgage holders or small business, as they try to make their payments and ensure their businesses can proceed forward in getting access to the capital they can to take advantage of the recovery.”

The Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) say in a joint statement that they “welcome this development” as the “culmination of six months focussed advocacy”.

“FTA/APSA have actively contributed to a broad coalition of peak industry bodies including the AIG, National Farmers Federation and APSA/ FTA member associations including the Australian Steel Association, the Australian Council of Wool Exporters & Processors, the Australian Meat Industry Council and the Australian Cotton Shippers Association. Collectively, the coalition has compiled a detailed terms of reference for consideration by the Federal Government.”

The statement also says that FTA and APSA will continue campaigning for a broader reform agenda by the Federal Government, including:

  • a formal waterfront industrial relations review
  • expanding the scope of the National Transport Commission to examine regulation of Terminal Access Charges
  • implementing measures modelled on the US Federal Maritime Commission’s review to ensure “fair and reasonable container detention practices are administered by shipping lines for the dehire of empty containers”
  • addressing issues around exclusive dealings “to ensure that shipping line end-to-end logistics services do not lessen competition”
  • potential implementation of 30-day notice period (following US model) to encourage “international shipping line adherence to acceptable notification periods on service and cost variations”
  • amending the Competition and Consumer Act 2010 to force “international shipping lines to operate more closely to those competition laws faced by other businesses involved in Australian commerce”, or in the alternative introducing a federal maritime regulator to oversee exporter and importer interests; and
  • investment in supply chain infrastructure to address inefficiencies “caused by larger ships, lack of rail access to Australian container ports and shortage of space in empty container parks.”

To read the full statement from FTA/APSA, click here

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Trade Minister looking for “constructive engagement” after US-China talks

Dan Tehan, Minister for Trade, Tourism & Investment, says that Australia looks to build on the progress made by US President Joe Biden and People’s Republic of China (PRC) President Xi Jinping, in an interview with Bloomberg.

“Look, geopolitical tensions are there but I must say it was very good to see the two presidents be able to have a dialogue over the last 24 hours, and a very meaningful and significant dialogue, and that’s what Australia wants to be able to do with China itself,” Dan says.

On a visit to Singapore the Trade Minister said that the talks between Biden and Xi could provide an opening for conversations between Australia and the PRC – conversations which have been complicated owing to Australia’s criticisms of the PRC over its handling of the COVID-19 pandemic as well as Australia’s support for the US on military questions.

“We are looking for constructive engagement,” Dan says. “We want to be able to work through our differences and our issues because we understand how important, especially our economic relationship is – it’s helped lift millions out of poverty in China, it’s helped us maintain our standard of living.”

The Minister also commented on the prospects of the PRC joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP is a trade agreement currently between 11 nations: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

Dan says that if the PRC is to join the agreement it will have to observe the process currently in place for any country to join.

“[The CPTPP is an] incredibly important regional trade agreement,” Dan says. “It has the gold standards. I think it’s the best trade agreement in the world. So, we’ve made it very clear that any country that wants to accede to CPTPP would have to meet those gold standard rules.”

He notes that the UK is the first country outside of the original signatories attempting to join the agreement, and that its accession process “will set the guardrails for other economies to follow.”

In Singapore the Trade Minister also said that he expects bottlenecks and congestion at ports to affect supply chain in the Asia Pacific region for the next 12-18 months. He said that there will need to be more investment in the area to help alleviate some of the ongoing disruption.

“I think it’s something that all economies will need to deal with over time. We need to see more investing into global shipping. We obviously need to see more investment in our ports, both for landside of ports and the seaside of ports, to make sure that we can deal with some of that congestion.”

The full transcript of the interview can be read here

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