Defective ports probe releases terms of reference

The Productivity Commission has released a terms of reference (ToR) for its review into Australia’s maritime logistics system sought by the federal government.

Initiated by the federal treasurer Josh Frydenberg and the trade minister Dan Tehan, the Productivity Commission examination of the nation’s defective ports logistics system was announced in a virtual address Australian Industry Group (AiG) by Prime minister Scott Morrison last week.

In a press release from Frydenberg’s office, it stated that although the Australian Competition and Consumer Commission found global factors were a significant contributor to rising shipping costs and delays, the review will ensure that domestic issues are not compounding the problems caused by supply chain disruptions since the start of the Covid‑19 pandemic.

“The Productivity Commission’s review will examine any long-term domestic trends, focussing on operational cost drivers, including industrial relations, infrastructure constraints and technology uptake in Australia’s ports and related transport networks in order to assess the overall competitiveness of Australia’s ports,” it read.

“The inquiry complements earlier work by the Productivity Commission on supply chain vulnerabilities and risks as part the Government’s commitment to ensuring the Australian economy is prepared for any possible supply chain disruptions.”

National Farmers Federation CEO, Tony Mahar said welcomed the direction of the review.

“We welcome any review that can work through structural issues with our international freight supply chains, noting that Australia’s port and stevedoring services have been rated as some of the most unproductive in the world,” said Mahar.

“It costs the same to ship a container of grain from South Australia to Indonesia as it does from Canada, despite being some 10,00km closer, this is simply unacceptable.”

The Productivity Commission will begin consultation in January and provide a final report in August.

More information on the Productivity Commission and its ToR can be found here.

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