Declaration of Designated Outwards Secondary Shipper Body 2007 (No. 2)

Administered by Department of Infrastructure, Transport, Regional Development, Communications, Sport and the Arts

Legislation au F2007L03857 Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Issued by the authority of

the Parliamentary Secretary to the Minister for Transport and Regional Services

 

Trade Practices Act 1974

 

DECLARATIONS PURSUANT TO SUBSECTION 10.03(2) OF PART X

International liner cargo shipping services are regular, scheduled services that carry non-bulk cargoes, mostly in containers.  They are a vital facilitator of international trade and it is crucial for Australia’s international trading performance, especially for value-added products, that liner cargo shipping services are provided at internationally competitive rates. 

Part X (International liner cargo shipping) of the Trade Practices Act 1974 (TPA) regulates the market conduct of international cargo shipping companies that collaborate as ‘conferences’ in order to provide joint liner cargo shipping services, often at agreed freight rates.  Liner shipping operators have traditionally been permitted by governments around the world to act in concert as ‘conferences’ in order to limit competition and stabilise freight rates.  They allow members to: allocate routes; fix prices; manage capacity; offer loyalty agreements; and pool revenue/ losses.  The traditional justification for allowing collusive behaviour of this kind is that it prevents destructive competition, which could lead to unsustainable prices below cost, and so market instability, which would impact on the capability of ocean carriers to provide the frequent, reliable services valued by shippers. 

Part X had its origins in the late 1920s out of a concern that, despite Australia’s long sea-trade routes, shippers in all states and territories should have access to liner shipping services of good quality (capacity, frequency, reliability, and port range served) at freight rates that are internationally competitive.  It is designed to be an effective, low cost, limited intervention regulatory regime.

As well as permitting ocean carriers to work together in conferences, Part X provides exporters and importers with countervailing powers to strengthen their negotiating ability with conferences, through shipper bodies designated by the Minister for that purpose.  Part X obligates shipping lines who are members of a conference to negotiate with designated shipper bodies in relation to liner cargo shipping services they intend to provide.

Designated peak shipper bodies deal with matters affecting liner trades as a whole whereas designated secondary shipper bodies may be nominated to negotiate with ocean carriers in relation to, for example, matters affecting shippers of a particular commodity, or shippers in a particular state/ territory.   

Pursuant to subsection 10.03(2) of Part X, the Minister may declare an association to be a designated outwards secondary shipper body, provided the Minister is of the opinion that, in relation to outwards liner cargo shipping, the association represents the interests of Australian shippers in a particular trade, or of Australian shippers of particular kinds of goods, or of shippers in a particular part of Australia, or of producers of goods of a kind exported from Australia, and that such a declaration is desirable.

Part X of the TPA falls within the portfolio responsibility of the Minister for Transport and Regional Services; this responsibility has been delegated to the Parliamentary Secretary to the Minister for Transport and Regional Services.

By force of the Legislative Instruments Act 2003, the instruments declaring five designated outwards secondary shipper bodies will expire on 31 December 2007.  All have indicated a wish to continue in this role and all meet the criteria outlined in subsection 10.03(2) of Part X of the TPA.  These associations are:

  1. The Meat Industry Shippers Association, which was declared to be an outwards secondary shipper body on 17 May 1990.  The Meat Industry Shippers Association meets the criteria in respect of subsection 10.03(2) because it is an association which represents the interests, in relation to outward liner cargo shipping services, of shippers and producers of meat products from Australia.
  2. The South Australian Shipping User Group, which was declared to be an outwards secondary shipper body on 31 August 1990.  The South Australian Shipping User Group meets the criteria in respect of subsection 10.03(2) because it is an association which represents the interests, in relation to outward liner cargo shipping services, of shippers and producers of exports from South Australia.
  3. The Western Australian Shippers Council Inc, which was declared to be an outwards secondary shipper body on 3 August 1990.  The Western Australian Shippers Council Inc meets the criteria in respect of subsection 10.03(2) because it is an association which represents the interests, in relation to outward liner cargo shipping services, of shippers and producers of exports from Western Australia.
  4. The Australian Horticultural Exporters Association, which was declared to be an outwards secondary shipper body on 31 October 1990.  The Australian Horticultural Exporters Association meets the criteria in respect of subsection 10.03(2) because it is an association which represents the interests, in relation to outward liner cargo shipping services, of shippers and producers of horticultural products from Australia.
  5. The Australian International Movers Association was declared to be an outwards secondary shipper body on 10 October 1990.  The Australian International Movers Association meets the criteria in respect of subsection 10.03(2) because it is an association which represents the interests, in relation to outward liner cargo shipping services, of shippers of personal and household effects from Australia.

Pursuant to subsection 10.03(2) of Part X of the TPA, the Parliamentary Secretary to the Minister for Transport and Regional Services has declared the above associations, by legislative instrument, to be designated outwards secondary shipper bodies.  This will, importantly, permit them to continue to negotiate with shipping conferences in relation to liner cargo shipping services, where it is appropriate that they do so.

Overview

The Trade Practices Act 1974 (TPA) was enacted to regulate and control anti-competitive practices and to promote fair competition within the Australian market. One of the Act's key components is Part X, which specifically addresses international liner cargo shipping services. These services are crucial for the country’s international trade, particularly for value-added products, as they ensure the provision of competitively priced, reliable, and frequent shipping services. The TPA allows international cargo shipping companies to collaborate in conferences, which help stabilise freight rates and manage competition. However, to protect the interests of Australian exporters and importers, Part X mandates that these shipping companies negotiate with designated shipper bodies. This ensures that shippers have a voice in the services provided by the conferences. The policy objective is to maintain a balance between the need for stable shipping rates and the necessity for competitive, reliable services. The authority to designate such shipper bodies is held by the Minister for Transport and Regional Services, with responsibility delegated to the Parliamentary Secretary. The legislative instruments declaring five specific associations as designated outwards secondary shipper bodies are set to expire, prompting their renewal to ensure ongoing effective negotiation with shipping conferences.

Scope and Application

The Trade Practices Act 1974, as clarified by the Explanatory Statement, specifically targets the regulation of international liner cargo shipping services within Australia. This legislation applies to international cargo shipping companies that operate as conferences, facilitating joint services with agreed freight rates, and is designed to ensure that these services remain competitive and reliable for Australian exporters and importers. The Act mandates that these shipping companies must negotiate with designated shipper bodies, which are designated by the Minister for Transport and Regional Services to represent the interests of Australian shippers. These shipper bodies are categorised into peak and secondary associations, with the latter focusing on specific commodities or geographic regions within Australia. The declared outwards secondary shipper bodies include the Meat Industry Shippers Association, the South Australian Shipping User Group, the Western Australian Shippers Council Inc, the Australian Horticultural Exporters Association, and the Australian International Movers Association, each representing particular trade interests. The scope of Part X extends across the nation, reflecting its importance for Australia's trade performance. While the Act primarily regulates the conduct of shipping conferences, it does not explicitly outline exclusions or thresholds, though its application can be influenced by subordinate instruments. The declaration of these associations as designated outwards secondary shipper bodies ensures their continued role in negotiating with shipping conferences, thereby supporting the interests of Australian exporters and importers.

Key Provisions

The Trade Practices Act 1974 (TPA), under Part X, addresses the regulation of international liner cargo shipping services which are critical to Australia's trade performance. These services are regular, scheduled, and primarily involve containerised cargo. The Act allows international cargo shipping companies to collaborate in conferences to stabilise freight rates and prevent destructive competition. The TPA also establishes a regulatory framework that balances the interests of shipping companies and shippers. In particular, section 10.03(2) of Part X mandates that shipping lines must negotiate with designated shipper bodies when providing liner cargo shipping services. Designated peak shipper bodies handle matters affecting all liner trades, while secondary shipper bodies focus on specific commodities or geographical areas. The Explanatory Statement details the criteria for designating these bodies, ensuring they represent the interests of Australian shippers or producers in specific trades or regions. The five associations mentioned—the Meat Industry Shippers Association, South Australian Shipping User Group, Western Australian Shippers Council Inc, Australian Horticultural Exporters Association, and Australian International Movers Association—have been declared as designated outwards secondary shipper bodies based on their representation of particular interests in outward liner cargo shipping. The obligations imposed by the TPA on these designated shipper bodies include representing the interests of Australian shippers in negotiations with shipping conferences, thereby ensuring that the services provided are competitive and reliable. The obligations on the shipping companies involve engaging in fair negotiations with these bodies and providing them with necessary information to facilitate effective bargaining. The Act’s intent is to maintain a balance between the need for stable, competitive shipping services and the rights of shippers to negotiate fair terms. Breaching the obligations set out in the TPA can result in legal consequences. While the Explanatory Statement does not detail specific penalties, breaches of the Act can generally lead to civil or criminal penalties. Civil penalties may include fines, while criminal penalties could involve imprisonment, depending on the severity of the breach. The maximum penalties are not specified in the Explanatory Statement, but they can be substantial, reflecting the importance of compliance with the Act to ensure fair and stable international trade practices.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.