Shoppers warned to expect empty shelves, delays if ports strike continues

Source: Sydney Morning Herald
Date: 7th January 2024

Shoppers have been warned to expect higher costs and delays in imports of furniture, food and clothing amid ongoing port strikes around Australia and disruption to shipping caused by Red Sea terrorist attacks.

The peak retail lobby group has also called for government intervention amid concerns that industrial action, cyberattacks and natural disasters are showing the fragility of Australia’s supply chains.

The Maritime Union of Australia is at loggerheads with stevedore DP World over a new workplace deal, prompting industrial action at container terminals in Sydney, Brisbane, Melbourne and Fremantle.

The union’s assistant national secretary said they had been forced to take protected industrial action because DP World had “deliberately sabotaged, delayed and manipulated the negotiation process for more than nine months”.

The union said the port operator paid no tax in Australia and had hiked fees by 52 percent while its workers were paid 17 percent below the industry standard.

“This company does not care about the Australian business community,” the union said.

The union’s claims were disputed by a DP World spokesman, who said the company was committed to being a responsible corporate citizen.

“By constraining supply chains, the union is hindering the movement of exports and imports, which ultimately affects the overall economy,” DP World said.

The spokesman said major retailers had not reported any significant impacts on stock flows or empty shelves so far.

“If the industrial action continues long term without resolution, it could potentially lead to empty shelves for some items, especially seasonal or perishable goods that have narrow supply windows,” DP World said.

Furniture and clothing with long manufacturing lead times were probably experiencing delays already that would be exacerbated by ongoing industrial action, DP World said.

But the union said any delay was limited to a few days and that shippers could utilise other stevedores.

“The root cause of any delay is either Dubai Ports’ refusal to negotiate with their workforce or their tendency to allow their IT systems to be hacked by Russian cybercriminals,” the union said.

Freight shipments were halted in November following a cyberattack on the port operator, prompting fears of shortages in the lead-up to Christmas.

Freight and Trade Alliance director said the industrial action had affected retailers before Christmas, prompting them to move towards a “just in case” scenario with onshore stock, rather than a more cost-effective “just in time” model.

Holding more stock will test warehousing capacity, with increased demand leading to higher costs, Freight and Trade Alliance said.

“This will translate to higher costs down the supply chain and paid by consumers, adding to inflationary pressures.”

Australian Retailers Association chief industry affairs officer said the ports strike continued to be a “pain point” for retailers, with no end point in sight.

Australian Retailers Association said the industrial action was affecting vessels at unloading and causing vessel “bunching”.

“We are seeing one to two weeks’ delays in loading returning vessels,” the Australian Retailers Association said. “This is likely to cause delays to stocks, rather than empty shelves or noticeable stock shortages. It also impacts on costs and emissions.”

The Australian Retailers Association said the ports strike, cyber incident at DP World and challenges caused by natural disasters highlighted a need for urgent government investment to make supply chains resilient.

“Whilst retailers have become adept at working around these challenges to find solutions, this comes at a cost to business, and these costs are ultimately passed onto the customer,” the Australian Retailers Association said.

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