August 20, 2021

Supply chain study: shipping is resilient – OFFICIAL

Pictured: a large ocean-going container ship. Picture credit: Ian Taylor via Unsplash. Note: the livery of the ship in this image has been altered.

Australia’s shipping sector is resilient during the COVID pandemic. That’s a key finding from the Productivity Commission Vulnerable Supply Chains study, which was released earlier this week.

“The Australian shipping sector proved to be resilient” is what the study says in Box 2.4, fourth paragraph down.

The report also later concluded that: “Services from maritime shipping and port operators largely continued to function during the COVID-19 pandemic in Australia.”

Noting that, as an island nation, Australia is particularly reliant on freight, the Productivity Commission observed that there had been increased delays and shipping costs. It also noted capacity constraints in containers and shipping vessels, along with COVID-related issues.

However, “despite these challenges, the Australian shipping sector proved to be resilient,” the study found. It quoted a submission from the Port of Melbourne, which read:

“The COVID‐19 pandemic has demonstrated the overall adaptability and agility of our freight and logistics sector to keep the Australian economy going. Despite the significant disruptions experienced over the past 12 months, we have seen the freight and logistics sector respond and adapt to a range of challenges including for example; increased regulatory controls, supply constraints, elevated demand, equipment shortages, changing distribution markets etc”.

Purpose of the study

The study was primarily aimed at addressing the vulnerability of products in the supply chain. However, as it turned out, there are few product-related vulnerabilities in the supply chain.

“While people have been understandably feeling apprehensive about supply chains, only a few traded products are vulnerable,” said the Productivity Commission’s Jonathan Coppel.

“Businesses can usually manage these risks through stockpiling, contracts and diversification,” he added.

“The main import vulnerabilities appear to be in certain chemicals, and in personal protective equipment,” Commissioner Catherine de Fontenay added.

Editor’s note: there were a variety of other important topics addressed in the Prodcutivity Commission’s report, which we will examine in future editions of Shipping Australia’s “Signal”.

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