Australian competition body raises concerns over DP World’s Silk Logistics acquisition
The Australian Competition and Consumer Commission (ACCC) has outlined preliminary concerns about DP World Australia’s proposed acquisition of Silk Logistics
DP World Australia operates container stevedores at the Ports of Botany (Sydney), Melbourne, Brisbane and Fremantle and, on average, handles approximately a third of the containers processed at these ports.
Silk Logistics is one of the only national door-to-door container logistic providers in Australia and hauls import and export containers using trucks to and from the DP World Australia-operated ports.
The proposed acquisition would result in DP World Australia, a major container stevedore, owning a national container transport provider, according to ACCC.
“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. This could lead to higher prices and reduced quality for Australian importers and exporters,” ACCC Commissioner Dr Philip Williams said.
“Our review is focused on DP World Australia’s ability and incentive to either increase terminal fees or worsen the quality of terminal services for container transport providers that compete with Silk, after the acquisition.”
“We are also assessing whether DP World Australia, after acquiring Silk, is likely to offer below-cost transportation prices to importers and exporters if their containers are also picked up and dropped off at DP World Australia’s stevedoring terminals,” added Dr Williams. “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.”
In addition, the ACCC is concerned that DP World Australia could be able to access and use commercially sensitive data about Silk’s rivals, which could damage competition.
In addition to its stevedoring services, DP World Australia operates an empty container park in each of the areas surrounding the Ports of Brisbane, Melbourne and Botany,
has a 50% interest in a vehicle booking system that container transport providers use for the purpose of collecting/delivering containers at several Australian ports, and operates a limited fleet of container transport trucks in Melbourne and Sydney.
