Join our daily newsletter At The Bell to receive exclusive market insights
- Australian business are growing increasingly concerned about the COVID-19 related disruption to global supply chains in the lead-up to Christmas, according to the ACCC
- The Australian Competition and Consumer Commission reports some big businesses have resorted to hiring shipping containers and chartering their own vessels
- The consumer watchdog released a report on Thursday detailing the effect container trade disruptions have had on Australian importers and exporters in the last 18 months
- It found despite freight rates on key global trade routes being seven times higher than the same time last year, shipping lines still couldn’t guarantee on-time deliveries
Australian businesses are growing increasingly concerned about global supply chain issues in the lead-up to Christmas, according to the ACCC.
The Australian Competition and Consumer Commission has released a report on the pandemic’s destabilising effect on shipping routes and container trade.
The consumer watchdog noted heading into the holiday season, some large-scale businesses were so concerned about further delays they’d begun hiring shipping containers and chartering their own vessels.
ACCC Chair Rod Sims said COVID-19 had resulted in a surge of demand for container cargo which hadn’t abated heading into the busy Christmas period.
“International shipping line movements normally run lean and just-in-time, but 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,” Mr Sims said.
“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.”
The ACCC also found freight rates on key global trade routes were currently “seven times higher than they were just over a year ago”.
Despite the huge rate increase, shipping lines still weren’t able to guarantee on-time delivery amid congestions in ports and cargo competition.
“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,” Mr Sims said.
