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On 30 November 2021, Prime Minister Scott Morrison announced a Productivity Commission inquiry into the efficiency of Australia’s maritime logistics system after the World Bank slammed Australian ports as some of the worst in the world. The inquiry, which is expected to yield results by mid-2022, will focus on competition, industrial relations, infrastructure constraints and technology uptake. The Prime Minister discussed the global impact of the pandemic stating,

“ For governments, businesses, families, individuals, COVID has unleashed an era of radical uncertainty and disruption of a scale rarely seen outside of wartime.”

Noting the deepest economic recession in nearly a century, the Prime Minister highlighted Australia’s need to “learn, adapt and improve- our supply chains, our skills and training system,” all essential components of our economic recovery plan.

Key Points:

  • “Supply chains, we know, are under increased pressure around the world due to international COVID-related factors. It was a key focus of our discussions at the G20.”
  • “Global container shipping costs, congestion and supplier delivery times all remain around historically high levels.”
  • “Global shipping prices are up around six-fold since the beginning of the crisis.”
  • “Australian shipping prices have likewise risen sharply.”
  • “Congestion and delays are having flow-on effects for domestic supply chains and consumers.”

With the government keeping a close watch on developments in potential industrial action at Australian ports; Mr Morrision encouraged all parties to resolve their issues swiftly and amicably, while simultaneously issuing a warning that, “our government will take action, if needed, to protect the Australian economy from serious harm.”

While accepting that Australian supply chains had “proved generally resilient throughout the pandemic,” the Prime Minister reiterated the importance of the unhindered flow of goods to Australian businesses and consumers, stating, “Ports are the gateway for our economy. Inefficient ports are a tax on all of us.” Covid-19 and its many variants, including Omicron, look set to disrupt port operations and labour capacity throughout 2022, and the threat of more evolved variants, future lockdowns, port closures, and vessel crew quarantines are a significant cause for concern for logistics companies. However, companies with a strong business strategy, skilled workforce, innovative management team and a loyal customer base will ultimately weather the COVID-19 storm better than their competitors.

Recommendations from the inquiry will offer a guiding light towards improved sustainability for an industry feeling the pressure of the protracted COVID storm. The review builds on the $107.2 million Supply Chain Resilience Initiative and will examine long-term domestic trends, focussing on operational cost drivers, industrial relations, infrastructure constraints and technology uptake in Australia’s ports and transport networks. According to a poll of 800 logistics companies, 53% of respondents said securing space on container ships is the biggest concern going into 2022, 22% said carrier surcharges and 19% were more concerned about labour shortages. The inquiry will cover these issues and more and will hopefully yield some welcome solutions and comfort in a time of such uncertainty.

Josh Frydenberg announced the report would be finalised by August next year; in the meantime, businesses are looking to dependable logistics companies for their expertise to navigate extensive shipping delays. Avion International Freight Forwarders have weathered the COVID-19 pandemic, and continue to navigate industry challenges with the expertise and skill that only seasoned logistics companies can offer. Avion is trusted by some of the world’s leading enterprises; offering import and export solutions, Customs Clearance, warehousing and distribution services to client’s the world over. Investments in the latest logistics technology, as well as a robust industry network of partners and vast knowledge of international and domestic trends, keeps Avion ahead of the logistics game.