While federal minister for industry and science Ed Husic says this week’s virtual Global Supply Chain Resilience Forum was the largest multilateral forum working on long term strategies to build supply chain resilience, no actions came from the meeting.
The forum was attended by the UK, Korea, Singapore, Indonesia, Japan, India, Canada, Mexico, Brazil, EU, France, Germany, Netherlands, Spain and the Democratic Republic of Congo. US secretary of state Antony Blinken and US secretary of commerce Gina Raimonda hosted the meeting.
“Collaboration with international partners is vital to building more resilient, transparent, and diverse global supply chains. That’s why Australia needs to work with like-minded countries to ensure access to essential goods and services are supported particularly when there is disruption,” Minister Husic said.
Husic said the government was committed to responding to views raised by forum stakeholders.
The forum came at a time the US is facing the potential risk of massive supply chain disruptions as a labour contract between International Longshore & Warehouse Union (ILWU) representing dock workers on the West Coast and shipping companies, represented by the Pacific Maritime Association (PMA) expired on 8 July with no new agreement reached.
The West Coast processes around 60 per cent of imports from Asia as well as the country’s exports.
The US National Association of Manufacturers said a 15-day port disruption would cost the country around $10.8 billion, with 41,000 people losing their jobs including more than 6000 in manufacturing and 15,000 in retail.
The situation is so critical President Joe Biden and labour secretary Marty Walsh met with the parties to negotiate an agreement that work stoppages would not occur while the ILWU and PMA worked out a deal.
In the forum, Husic iterated the importance of having both a national and international approach in addressing stresses in global supply chain, and the role of governments to step in and support businesses and workers where the supply of essential goods and services is at risk of significant disruption.
“The voices of businesses, workers and community groups are central to these discussions as they are the first line of defence for maintaining well-functioning supply chains,” he said.
In a report last November on the impact of the global logistics crisis on Australian container trade, the Australian Competition & Consumer Commission said the Australian sector was feeling the pressure and costs, and was vulnerable to impacts.
The ACCC did point out, that a recent World Bank and IHS Markit study showed that even before Covid disruptions, Australian container ports were “relatively inefficient and well below international best practice”.
“The study ranked Australia’s largest container ports, Melbourne and Sydney, in the bottom 15 per cent and 10 per cent respectively, of the 351 global ports in the study,” the ACCC said.
The report said data published by the United Nations Conference on Trade and Development showed that in 2019, the median in-port time for container ships visiting Australia was three times longer than Japan, twice as long as China, and 50 per cent longer than Singapore or New Zealand.
“We were told that some shipping lines were already withdrawing services from Australia before COVID hit. Australia needs to take decisive action to remain an attractive destination for global shipping lines,” the then ACCC chair Rod Sims said.
The report also looked at workplace practices, saying systemic industrial relations issues and restrictive work practices have further disrupted the supply chain and exacerbated congestion and delays.
“Data obtained by the ACCC shows average idle hours, which is the length of time a ship spends in berth, at Port Botany increased from 11.9 hours pre-pandemic to 21.2 hours in 2020-21. Congestion at Port Botany has become so bad that some shipping lines are skipping the port entirely,” is said.
Sims said industrial action on top of existing congestion puts an “enormous strain on our international container ports at a time when they can least cope with it, and in the case of Port Botany, some shipping lines have decided the delays make using the port commercially unviable,” Sims said.
“The long-running labour issues in the container stevedoring industry have resulted in lower productivity and higher costs for Australian cargo owners,” he said.
Husic said resilient global supply chains reinforced the prosperity, security and wellbeing of the nation.
“[This includes] the need to ensure there is adequate workforce in times of crisis, the critical role of public procurement in strengthening and diversifying supply chains, and the need for substantial public-private partnerships to build critical supply chain resilience,” he said.
