Monopoly freight operator Sea Swift has been forced to remove anticompetitive restrictions in its contracts following an ACCC investigation. Photo: Cape York Weekly.
A change that Cape York residents have been demanding for years is on the horizon following an investigation into Sea Swift’s anticompetitive contract by the Australian Competition and Consumer Commission (ACCC).
The shipping and logistics operator has been forced to remove restrictions in its contract terms which stop other suppliers of scheduled sea freight services in the region from entering the market and competing for customers.
ACCC Commissioner Luke Woodward said there were concerns about elements of Sea Swift’s contracts with customers that could significantly increase the cost of living in communities.
“Sea freight is literally a lifeline for many remote communities in supplying fresh produce and medical supplies. We had significant concerns about the impact that restrictions on competition in the supply of sea freight services can have on people living in remote communities, including First Nations Australians,” he said.
“If remote businesses have only one supplier of essential services or goods, that supplier has few restrictions on the price it can charge, and consumers are often charged a higher price than they would in a competitive market.
“The amended contract terms will give customers the flexibility to use alternative freight service providers, including the option to transport smaller, ad hoc volumes by sea or road.”
For Cape York, where sea freight becomes the only option during the wet seasons, calls for an alternative to the monopoly operator have been desperate.
The topic was again highlighted early last year, when the Western Cape Chamber of Commerce (WCCC) was quoted an eye-watering $31,000 by Sea Swift to transport a waste management truck up to Weipa.
In a letter imploring the State Government to intervene in the crippling freight situation, president Jai Christie said the government, which owned a 100 per cent share in the company, had a responsibility to ensure it operated fairly and in the best interests of the communities it served.
According to the ACCC, Sea Swift acknowledged the federal government body’s concerns that its conduct may breach competition laws, with some agreements requiring customers to let Sea Swift match any competitor’s proposal.
The ACCC has accepted a court-enforceable undertaking from Sea Swift that it will amend its existing and future contracts to remove any anticompetitive clauses.
“We considered that these contracts could have prevented other freight service suppliers from growing large enough to viably compete, and that Sea Swift’s conduct had the substantial purpose, effect, or likely effect of substantially lessening competition,” Mr Woodward said.
Sea Swift did not respond to request for comment.
