Shipping Christmas stock on time in 2021 has Australian retailers chartering their own cargo ships

Australian retailers have been so concerned stock would not arrive in time for Christmas that they had to buy their own shipping containers and charter their own cargo ships. The Australian Competition and Consumer Commission’s (ACCC) Container Stevedoring Monitoring Report stated the global epidemic and cargo slowdown caused maximal logistics blockages worldwide.

Over recent times, the increased call for sea freight has put great pressure on the shipping sector. Some Australian merchants have taken desperate action to ensure sufficient supplies of goods and enable traders to fulfil their international commitments.

Deeper examination reveals a number of Australia-specific factors as the fundamental reason for the current problem. These factors exacerbate the situation.

Shipping Christmas stock on time in 2021 has Australian retailers chartering their own cargo ships

Cause and size of current Australian sea freight congestion

For sea freight to compete on the world market, global shipping companies work economically and to strict schedules. The global epidemic caused many shipping ports to close for a time, upsetting the movement of sea freight around the world. Lately, increased demand for sea freight, together with this disruption in the system, have resulted in blockages and slowdowns that have affected Australia.

Worst cargo ship arrival punctuality on record

One Australian dock worker advised the ACCC that, in 2020-21, 90 percent of cargo ships have been late docking. This is the worst punctuality rate ever recorded by the docking company. Prior to the pandemic, the Australian shipping industry could have handled such an increase in sea freight needs. The concurrent disturbance in virtually all aspects of the logistics network has used every bit of available and extra space. This has meant the sea freight network has really struggled to get freight delivered as and where needed, and traders and dealers have turned to other ways of getting their Christmas stock.

Up to 90% of cargo ships arrived late in Australia for 2020/21 had made shipping Christmas stock more challenging than ever

Impacts from maritime industrial relations

The ACCC states that ingrained industrial relations problems and actions have caused further disruption to the logistics network, worsening the logjams and slowdowns. This has even caused some organisations to ship small loads to alternative local ports.

According to the ACCC, the time a ship spends in a Botany (Sydney) port berth increased from just under 12 before the pandemic to over 21 in 2020/21. The ACCC said gridlock at Botany was such that some ocean freight companies were avoiding the port completely.

Rod Sims, Chairman of the ACCC, said the industrial action added to the congestion has overburdened Australia’s international shipping ports at the worst possible time. Some shipping companies say the delays have made Port Botany commercially unviable. It is believed some lines had already begun bypassing Australia before COVID hit. For Australia to remain a viable destination for global shipping lines, decisive action must be taken.

Chair of ACCC Rod Sims noted that some shipping lines were withdrawing from Australia prior to pandemic

Long-term trends add to shipping Christmas stock delays

According to the ACCC, there are several other movements that have affected Australia’s shipping industry over the last decade. For instance, the increase in docker numbers means each earns less, depending more on the monies paid by onshore transport companies.

The container industry has, however, benefited from Australia’s four main container ports being privatised, which has energised operations. This, however, has brought about price increases.

The privatised Australian ports are:

• Adelaide (2001)
• Brisbane (2011)
• Port Botany (2013)
• Port of Melbourne (2016)

Rod Sims reported that in 2020 the ESCV found the Port of Melbourne had used its strength to levy port operators for land rental. The ACCC had long held the view that Australian sea freight ports needed a higher level of regulation, and the ports were in need of review and revision. It is felt that regulation needs to make up for the paucity of competitive pressure on the ports.

Only long-term solutions for shipping Christmas stock delays

To counter Australia’s acute shipping blockage, the ACCC has suggested a multi-faceted way forward. By addressing both the industrial relations problems and the need to improve infrastructure, containers can be more efficiently moved from vessels into storage facilities.

The ACCC suggests all relevant authorities address the industrial relations issues and restrictive work practices, restrict privatised ports from imposing overly-high rents and charges, and encourage stronger competitiveness between shipping lines on Australian trade routes.

It also suggests appropriate government and private investment to rectify supply chain inefficiencies caused by bigger vessels, paucity of rail access to Australian container ports, and the dearth of container storage space.

Need help to minimise delays from Australia sea freight congestion?

If you need help with your Australia sea freight shipping to minimise delays from the congestion, feel free to contact us online or message via our Facebook page. We’re more than happy to help you when importing to Australia and seeing they get here in a timely fashion.