The Australian Competition and Consumer Commission (ACCC) has announced it will not oppose DP World Australia Limited’s proposed acquisition of Silk Logistics Holdings Limited.
Following an extensive investigation, including considering detailed responses to its statement of issues, the ACCC concluded that the proposed acquisition would not likely result in a substantial lessening of competition.
DP World Australia operates container stevedores at the Ports of Botany (Sydney), Melbourne, Brisbane and Fremantle. On average, DP World Australia services approximately a third of the containers processed at these ports.
Silk is a national container logistics provider in Australia. It hauls import and export containers using trucks to and from ports where DP World Australia operates.
The ACCC considered the integration of DP World Australia’s container terminals with Silk’s national container transport and warehousing business and the potential impact on container transport service providers in the supply chain.
The ACCC focussed on whether DP World Australia would have the ability and incentive to engage in discriminatory conduct against Silk’s container transport rivals by raising their costs or lowering their quality of access to DP World Australia’s terminals.
ACCC analysis indicated that DP World Australia is unlikely to engage in forms of discriminatory conduct which would lead to material operational delays and disruption at DP World’s terminals. A reduction in DP World Australia’s ability to efficiently process containers at its terminals would risk DP World Australia losing shipping lines to other terminals, damaging its own business.
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“Although DP World Australia may be able to engage in subtle forms of discrimination without adversely affecting its primary function as a container terminal, such conduct is unlikely to reach a level so as to substantially lessen competition,” ACCC Commissioner Dr Philip Williams said.
“DP World Australia would continue to face competition from a range of established and prospective container transport providers.”
The ACCC has an ongoing role in monitoring Australia’s container freight industry. This involves tracking prices, costs and profits of container terminals, gathering information from the container freight industry, and providing a monitoring report to the government each year.
