In Australia and abroad, empty shipping containers have piled up at ports and ships are in short supply – and that now means the Christmas favorite is in jeopardy.
It may be a beachside suburb in the same throat of Sydney’s jungle as Bondi, but you won’t find any postcards featuring Port Botany.
This neat corner of Sydney is vibrant with industry rather than activewear. Trucks, each loaded with a single container, race endlessly to and from scores of ships. But they are not able to move fast enough to meet the demand.
The giant skyscrapers of shipping containers stacked high at ports around the world are a sign that All is not well in global supply chains,
Many of these steel balls are sitting idle, filled with nothing but air. And there are too few ships to put them.
Yet at the same time, retailers are desperate for more overseas deliveries to fill the gaps on shelves before Christmas.
An industry insider has told news.com.au that there is “no easy answer” to a supply chain squeeze.
The latest product to be affected by this worldwide wrinkle is wine. Retailers are warning customers that the supply of some imported spirits and Champagne could be affected due to high demand during the festive period.
That’s modest compared to Brits, who have been warned to expect hiatus on shelves until a possible 2023.
In a recent report, the Australian Consumer and Competition Commission (ACCC) said a literal “logistics nightmare” was brewing.
“The supply chain has been placed in a state of constant disarray, unable to cope with the increased demand for containers,” it said.
shipping containers skyscraper
Shipping containers are the defining characteristic of Port Botany. Behind barbed wire fences, walls of containers – technically known as twenty-foot equivalent units or TEUs – rise to the sky.
A handicap of identical white TEUs from the spacious Danish Holler Maersk on one side of the street is easily higher than any local apartment block.
Nearby, a collection of more than 200 TEUs of rusted rugs are neatly piled together, reminiscent of a boat floating on a beach. Some towers are up to seven containers high.
Australian Peak Shippers Association (APSA) secretary Paul Zlai told news.com.au that the sheer volume of extra containers at Australian ports during the height of the pandemic “got everyone on hold”, but that the issue was becoming less and less .
But it is not so elsewhere. in uk, Additional containers were being stored in recently unused airfields east of London. In Los Angeles, local residents complained when trucks were carrying giant steel boxes Locals began planting crops on the streets as they looked for temporary places to store them.
“The bottom line is an efficient supply of containers and vessels to meet the rapidly growing needs,” Mr. Zalai said.
Ideally, full containers would arrive in Australia, emptied and then filled with Australian produce to ship overseas.
“In an ideal world you would have 50 percent imports and 50 percent exports,” Peter Van Duyen, a specialist in maritime logistics at Deakin University’s Center of Supply Chains and Logistics, told news.com.au.
“But that’s not the case here. Australia has finished most of its construction so already a quarter of TEUs have been sent back empty.”
Transporting empty containers at the best of times increases the cost of shipping lines. But Kovid-19 made everything very bad.
In October, the ACCC summarized the issue: “There is an abundance of empty containers, but they are stuck in the wrong places.
“Shipping lines are finding it easier to manufacture new containers instead of emptying existing ones,” the government body said in its statement. container stevedore monitoring report,
The lockdown and border closures had led to an increase in demand for household goods, which were usually transported in containers. Things like TVs, sneakers and gaming consoles.
“At the same time, the pandemic set off a cascade effect, with intermittent and ongoing shocks in the supply chain, exhausting excess shipping and port capacity. The supply chain has been kept in a constant disarray, unable to cope with the increased demand for containers.
“It represents a logistics nightmare for the industry.”
The ACCC said the shipping line schedule that once “acted like a clock” was forfeiting.
US bottleneck combined with China shutdown
One of the biggest ongoing issues is at the ports of Los Angeles and Long Beach in California which handle 40 percent of US container traffic.
Despite the sheer size of the ports, stevedores cannot cope with the huge demand for unloading and loading ships.
“There are about 70 or 80 ships currently waiting to arrive in California … and that resonates through the entire supply chain.” Deakin’s Mr Van Duyen said.
In many cases, shipping lines are so frantic to unload their cargo in ports and return to get more, they leave without taking any containers at all – except for a TEU stranded on the wrong side of the ocean.
Another issue has been China’s Kovid-zero stance. This has led to the closure of entire ports due to one COVID case, further affecting container supply.
And it is not just Covid-19 that is causing problems. The Ever Given ship that blocked the Suez Canal, one of the world’s busiest shipping lanes, didn’t help. Industrial action by stevedores in Sydney has also had an effect.
At one point earlier in the year it was estimated Sydney had over 30,000 containers that were discarded, These thousands of container buses piled up at container parks and transport depots waiting to be returned.
gaps on shelves
NS A shortage of containers has led to an “astronomical” jump in shipping costs Which in turn feeds into prices for consumers and thus inflation.
For retailers, this has resulted in delays in shipping the products to them and there are gaps in the shelves.
Associated British Ports CEO Henrik Pedersen told UK industry magazine retail gazette That he would be “positively surprised” if the issue is resolved next year, meaning the chaos could last until 2023.
“When you have a multitude of container ports around the world, it takes a very long time to get operational,” he said, also pointing to a post-Brexit shortage of truckers in the UK.
Retailers including Marks & Spencer have seen empty shelves for some items.
In Australia, imported booze is now in the logistics crosshairs.
Endeavor Group, which owns retailers Dan Murphy and BWS, has blamed “supply chain constraints” for the 12-bottle per capita limit of French Champagne brands including Mum, Pol Roger and Mot.
Coles, who owns Liquorland and First Choice, has also ratified some of the purchase limits, but insisted it was standard practice during busy periods.
How long will the supply chain crisis last?
APSA’s Mr. Zalai told news.com.au that the lack of ship capacity was now a bigger issue than with enough shipwrecked containers, for example, the major route from Australia to the Middle East and South Asia that serves as a major source of agricultural exports. are important for.
“We are thrilled that the government has heard our cries and there will be a Productivity Commission review because there is no easy answer and it requires intense and independent research,” he said.
If domestic restrictions return, it could exacerbate the problem, he said, as Australians spend more money on products to entertain themselves at home.
If it doesn’t, there’s a way for supply chain woes, Mr Van Dunne said.
“Once the holidays are over and people are buying less stuff there will not be as much pressure on supply chains.
“So it is quite expected that things will return to a bit more like normal and there will be astronomical reduction in prices for containers currently in place.”