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More supply chain pain to come, industry expert predicts

More supply chain pain to come, industry expert predicts article image

Australia’s reliance on global imports is set to leave the country vulnerable in the wake of further supply chain delays, according to an industry expert.

David Aherne, Managing Director and CEO of Across the Ocean Shipping, predicts shipping delays to continue “well into 2022.”

Australia’s continental separation will place importers at further disadvantage, Mr Aherne says.

Importers should begin implementing contingency plans to protect themselves against worsening cargo delays to prevent consumer disappointment, he advises.

David Aherne 1

Mr Aherne predicts the following headwinds for importers and exporters in 2022:

  • Key calendar events, including Chinese New Year and the Beijing Winter Olympics are expected to add further pressure to already struggling supply chains. Port closures are expected, particularly in Northern China – one of Australia’s most frequented shipping routes.
  • The 2022 Beijing Winter Olympics is just weeks away and freight forwarders are anticipating further mandatory factory closures, as the city battles to reduce pollution in the lead-up to the global event.
  • With international travel back on the cards, passengers will be taking up the weight of air freight cargo, once held by goods whilst international borders were closed. Pilots are in short supply, with retraining still underway, as Australia’s reopening plan accelerates beyond initially anticipated. With air freight in high demand due to a bottle-neck of shipping delays, rates are expected to skyrocket, as cargo space becomes less available.
  • If the turnaround time for quarantine clearance continues to rise, industries in need of goods requiring quarantine clearance, such as food, plant materials, and wooden articles, could face additional waiting periods and subsequent cost escalations.
  • Consumer demand will further increase as countries begin to emerge from lockdown. Limited vessel accessibility will cause producers to keep stock on-hand. This will implicate warehousing space, as some manufacturers may need to limit stock production.

Mr Aherne says additional measures are needed if these predictions come to light.

“Larger transport vessels are needed to ensure importers have access to more containers and cargo space for the shipment of goods,” he says.

“It is evident labour shortages are also likely to impact the supply chain’s rapidity next year if employment uptake does not increase in the shipping & logistics industry.”

Delays caused by rolling industrial strikes and customs clearance times are a prime example, Mr Aherne explains.

“Preparation and forward-thinking could aid potential strain, as we approach 2023. Having additional inventory on shore will be required to account for future supply chain disruptions; this will help to move businesses away from JIT (Just in Time Shipping).”

 Across the Ocean Shipping is a leading freight forwarder with offices in Cremorne in Sydney, Richmond, Melbourne and global offices in Los Angeles and Rotterdam.

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