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International Liner Cargo Shipping (2005)

Inquiry report

This inquiry report was released on 5 October 2005.

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Contents

Preliminaries
Cover, Copyright, Terms of reference, Contents, Abbreviations and explanations, Glossary, Key points, Overview, Findings, Recommendations

1 Introduction

2 The market for liner shipping
2.1 Global trends in liner shipping
2.2 The Australian liner shipping market
2.3 Agreements between shipping lines
2.4 The significance of different types of agreements on Australian trade routes

3 Economics of international liner shipping
3.1 Characteristics of supply and demand
3.2 Stability and competition in the market for liner shipping
3.3 Comparisons with other industries

4 Competition in the market for liner shipping
4.1 Rationale for cooperation between shipping lines
4.2 Limits to competition in the market for liner shipping

5 Key elements of Part X of the TPA
5.1 Objectives of Part X of the TPA
5.2 The exemptions from trade practices provisions provided under Part X
5.3 Activities covered by Part X
5.4 Agreements covered by Part X exemptions
5.5 Obligations of ocean carriers under the Act
5.6 Designated shipper bodies
5.7 Review and enforcement

6 International regulation of liner cargo shipping
6.1 Outline of current regulations in major trading partners
6.2 Differences between Australian and major international conference regulations
6.3 Recent trend towards greater competition
6.4 Recent regulatory reviews

7 Evaluation of Part X
7.1 Analytical framework
7.2 Objectives of Part X legislation
7.3 Nature of Part X restriction on competition
7.4 Effects of Part X restriction on competition
7.5 Balance of benefits and costs

8 Alternatives to Part X
8.1 Authorisation
8.2 Notification
8.3 Alternatives under Part VII for shipper bodies
8.4 Major concerns about alternatives
8.5 Do the alternatives achieve the rationale of Part X?
8.6 Transitional arrangements
8.7 International implications of preferred recommendation

9 Options for modifying Part X
9.1 Differentiating between agreements
9.2 Promoting competition
9.3 Other modifications to Part X
9.4 Australia’s WTO and Free Trade Agreement obligations

10 Review and enforcement under Part X
10.1 Participants comments
10.2 Initiating a review and the role of ‘exceptional circumstances’
10.3 Reversing the onus of proof
10.4 Ministerial discretion
10.5 The role of undertakings
10.6 Alternative review process suggested by Shipping Australia Limited
10.7 Recommendations to improve the review and enforcement process

APPENDIXES

A Conduct of the Inquiry
A.1 Introduction
A.2 List of submissions
A.3 Visits
A.4 Public hearings

B Participants' views

C Shipping data
C.1 Australia’s liner cargo trade
C.2 Capacity data for members of Part X agreements and independents

D Economic issues
D.1 Costs in liner shipping
D.2 The economics of cart
D.3 Core theory and the market
D.4 The economics of cartel behaviour
D.5 Conferences and operational efficiency

E Registration checklist under Part X

F Modifying Part X: identifying agreements by market share

G Other modifications to Part X
G.1 All-in freight rates and the treatment of surcharges
G.2 Australian dollar freight rates
G.3 Making agreements between conferences and shipper bodies binding
G.4 A code of practice for negotiations
G.5 Requiring carriers to provide greater justification of price increases
G.6 Shipper organisation involvement in the negotiation of stevedoring contracts
G.7 Shipper ‘veto’ over the registration of agreements
G.8 Funding shipper bodies

References