Photo: Freepik
Concerns about competition have been flagged in stevedore operator DP World’s bid to take over container transport firm Silk Logistics.
The Australian Competition and Consumer Commission (ACCC) says the deal would result in a major container stevedore company owning a national container transport company.
“We have heard concerns that DP World’s ownership of a national container transport provider is likely to reduce competition in the supply of container transport services,” ACCC Commissioner Dr Philip Williams says.
“This could lead to higher prices and reduced quality for Australian importers and exporters.
“Our review is focused on DP World Australia’s ability and incentive to increase terminal fees or worsen the quality of terminal services for container transport providers that compete with Silk, after the acquisition.”
Dr Williams says the ACCC is also assessing whether a post-deal DP World Australia would offer below-cost transport prices if containers are also picked up and dropped off at its stevedoring terminals.
“This is because a discounting strategy involving below-cost prices could reduce container transport competition allowing a combined DP World Australia and Silk to raise prices later.”
The ACCC says it is also concerned that DP World Australia could access Silk’s commercially sensitive data to damage competition.
The commission says their own monitoring shows very limited competition between stevedores on terminal charges to container transport providers.
In addition to stevedoring services, the ACCC says:
- DP World Australia operates an empty container park in areas surrounding Brisbane, Melbourne and Botany ports;
- it has a 50 per cent interest in a vehicle booking system that container transport providers use to collect/deliver containers at Australian ports;
- it operates a limited fleet of container transport trucks in Melbourne and Sydney.
Submissions are invited and must be in by March 27.
ABOUT THEM
DP World Australia operates container stevedores at Botany (Sydney), Melbourne, Brisbane and Fremantle ports.
DP World Australia on average, services about a third of containers processed at these ports.
Silk is a national door-to-door container transport operator whose trucks operate in ports that DP World Australia also operates in.
DP World Australia is an indirect subsidiary of DP World Limited (DPW). DPW provides freight forwarding and contract logistics services in Australia.
Silk operates 46 facilities across NSW, Victoria, Queensland, South Australia and Western Australia.
Silk’s operations are divided into port and contract logistics.
