Money
Australian watchdog investigating shipping cost price-hike
Australia’s consumer watchdog has opened up an investigation into the dramatic rise in global shipping and container costs following the pandemic
The Australian Competition & Consumer Commission confirmed it has opened the inquiry, particularly focusing on the sharp rise on the price and movement of shipping containers.
ACCC chairman Rod Sims says he is aware of what is going on within the shipping industry and “is investigating it.”
“There is a limited amount I can say on it, but we are looking at the freight system – particularly the role that containers play, I can certainly say that, and that is certainly on the list of investigations”
The costs of shipping containers have risen more than 300 per cent in the last year, with steeper prices crunching retailer profit margins.
The shortage of containers
The insufficient supply of container ships has been blamed on supply chain disruptions caused by COVID and recent virus outbreaks at key ports in China.
But many Australian business executives say that they believe the container shortage is “partially artificial” and that the industry is just playing on the excuse as a reason to squeeze higher prices.
The massive steel containers piled onto ships are vital for the international movement of goods.
The skyrocketing cost of shipping containers that bring everything from sneakers and sofas to washing machines to Australia has ratcheted up costs for importers – especially the retail sector, which has shaved its profit margins.
Reserve Bank of Australia responds
The economic impact has also reached the attention of the Reserve Bank.
In its May statement on monetary policy, the RBA reported on a five-fold increase in shipping container prices since 2019.
The RBA stated that the lack of shipping containers had resulted in sharp increases in global shipping prices and also contributed delivery delays.