- The International Forwarders & Customs Brokers Association of Australia (IFCBAA) has issued a new warning about carriers’ market dominance.
- Independent and SME forwarders are being placed in direct competition for landside logistics, warehousing and customs clearance services.
- The IFCBAA has asked its members to give evidence to the competition commission.
Carriers ‘moving in’ on landside services could push forwarders out of business, says an article published in The Loadstar.
The International Forwarders & Customs Brokers Association of Australia (IFCBAA) has issued a new warning about carriers’ market dominance, claiming that their stranglehold over maritime freight capacity will squeeze out land-based forwarders.
Prioritizing the sea freight bookings
Stuart McFarlane, air & sea freight forwarding manager at the IFCBAA, said carriers were prioritising the sea freight bookings of forwarder customers that agreed to use their land-based logistics services.
“Previously, such services would generally be arranged by forwarders that own and operate road haulage vehicles or sub-contract to logistics providers of their choice.”
Nevertheless, Mr McFarlane claimed this vertical integration business strategy pursued by some of the biggest shipping lines was placing them in direct competition with independent and SME forwarders for landside logistics, warehousing and customs clearance services.
May contravene the consumer act
“Effectively, many forwarders may disappear, and the relevant forwarding and logistics services will only be available to Australian shippers and receivers as ‘tied-in services’ available through carriers’ affiliated entities and a small number of multinational forwarders,” Mr. McFarlane added.
This carrier behaviour, according to the IFCBAA, may be in violation of Australia’s competition and consumer act, and it has asked its members to give evidence to the competition commission. Since the pandemic began and container transport demand began to outstrip supply, many shippers and forwarders have accused their vendors of “price gouging,” even as service levels have deteriorated.
Shipping lines, for their part, have quickly blamed the high levels of worldwide port congestion.
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Source: The Loadstar
