Australian exporters and importers are facing an accumulated burden created by COVID-19, with an unstable global container freight supply chain, delayed shipments, and drastically rising freight costs, an Australian Competition and Consumer Commission (ACCC) report says.
The commissions’s Container Stevedoring Monitoring 2020-21 Report highlighted the repercussions of the current global logistics crisis on Australia’s container trade, along with prices, costs and profits of stevedores at Australia’s international ports.
Major disruptions and delays have arisen due to high levels of congestion across the global supply chain and an increase in demand for containerised cargo the report found.
ACCC chair Rod Sims said international shipping usually runs just in time.
“A surge in demand and COVID-19 outbreaks that have forced numerous port operations to temporarily shut down have caused congestion and delays with a cascading effect across the globe,” said Sims.
A few large retailers have bought their own shipping containers and are chartering their own vessels because of concerns about cargo not arriving before Christmas cut-off, along with some Australian exporters unable to meet their contract obligations.
A stevedore told the ACCC rates of vessels arriving to their designated berth windows in 2020-21 are at their lowest, with only 10 per cent making it in time.
“Pre-pandemic, the sector would have likely been able to manage such a surge in containerised demand, but the simultaneous destabilisation of almost every part of the supply chain has left them without any spare capacity and struggling to cope,” said Sims.
Even though freight rates on key global trade routes cost seven times more than they did over a year ago, shipping lines still cannot guarantee timely deliveries. The ACCC said it believes once the major impacts from the pandemic subside, the operation of the global supply chain will be restored, and freight rates will reduce.
Sims added that: “The margins of Australian importers and exporters are being squeezed, as they are all around the world, and the current situation is very challenging for businesses that rely on container freight.”
The regulatory commission also said unless productivity, workplace relations and supply chain inefficiencies are addressed, the nation faces the risk of becoming a less appealing destination for shipping lines.
