Review urges probe into port practices

By DANIEL RIORDAN shipping writer

A Government-instigated review of the shipping industry has recommended the Commerce Commission investigate alleged monopoly pricing by port companies.

The review has also recommended New Zealand shipping companies be granted concessions by the Government that would allow them to better compete with international shipping companies supported by their governments.

It also calls for the opening of New Zealand and Australian coasts to each other's shipping.

The report of the Shipping Industry Review says port companies have a prima facie case to answer on accusations that they are behaving like virtual monopolies in many areas, with non-contestable pricing making them cash cows for their shareholders.

Lack of any detailed information disclosure by the port companies prevented users from being able to accurately assess the fairness and equity of pricing regimes, said the report.

A Commerce Commission investigation, similar to its inquiry into charges of airports' monopoly pricing, is recommended.

The report also says the local industry is at a competitive disadvantage on coastal routes run by foreign operators, and recommends special tax arrangements to "level the playing field" for New Zealand shipping.

The review was initiated by Transport Minister Mark Gosche last September and headed by maritime lawyer Ian Mackay. Its five other members represented a broad cross-section of the shipping industry.

Some 83 submissions were received from shippers, shipping lines, port companies, unions, regulatory agencies and other interested parties. Among other recommendations are:

* Better use of maritime training institutions.

* Closer partnership between the industry and the Navy.

* Better realising opportunities for domestic shipping from hubbing.

* Minimising compliance costs of regulations on shipping.

* Ratifying International Labour Organisation conventions on shipping.

* Improving the collection and reporting of shipping and cargo-related statistics.

The report will be considered by an 11-strong ministerial committee chaired by Mr Gosche and including Prime Minister Helen Clark, Deputy Prime Minister Jim Anderton and Finance Minister Michael Cullen. This committee will report its findings to the cabinet.

Shipping Industry Review