The Australian is today reporting that the Abbott Government is considering opening up domestic shipping routes to international competition in a bid to lower freight costs:
Some of the three options canvassed in the paper would effectively scrap the cabotage rules that preserve freight routes from one Australian port to another for Australian-flagged ships.
…industry has complained that the cost of shipping cargo has skyrocketed after Labor’s crackdown on foreign ships on the domestic route, while the Productivity Commission has warned the changes have reduced competition on the coastal trades.
Infrastructure and Regional Development Minister Warren Truss will release the paper at a conference today in Sydney, where he will warn that it can be cheaper to move goods from overseas than to ship them from one Australian port to another…
Opening-up coastal shipping routes to foreign carriers is a good move in my opinion. As a large and isolated nation, the ability to move goods around efficiently and cheaply is an important determinant of Australia’s competitiveness, with excessive freight costs effectively acting like a tax on both industry and consumers.
Once the Coalition is done liberalising shipping freight, hopefully it will then turn its attention to the aviation industry, where similar restrictions limiting competition from foreign carriers are also in place.
