2020 we saw the quadrella of horrors. The year started with bushfires, then the pandemic with lockdowns and border closures, unprecedented events. After months of massive job losses, lost sales and business hibernations we were given the green light to start coming out of lockdown (except Victoria), SMEs, importers and exporters in this case, relieved at an opportunity to finally get the cogs turning and some blood running through the business veins again.
Then the “coup de grace”, the MUA (Maritime Union of Australia) decided it was a good idea to trigger industrial relations disputes on the waterfront over a few bucks. Sydney, Melbourne, Brisbane and Fremantle were all affected. An absolute kick in the guts for every single person on Team Australia and Brand Australia. NSW felt the real brunt because a freak storm threw a spanner in the works which exacerbated the backlog and delays at the wharf.
The situation became so dire that Shipping Lines stopped calling into Port Botany. For importers and retailers relying on new stock in time for pre-Christmas sales, this means additional dollars and delivery delays. The cost of carting these Sydney containers from Brisbane and Melbourne to Sydney by road or rail is huge. Ultimately, small business suffers and consumers will have to pay higher prices.
The MUA call their action a Human Rights issue. We call it tantamount to extortion. In transport and logistics, many of us worked around the clock to ensure supply chains kept moving throughout this pandemic. In the private sector we don’t get overtime, loading, additional weeks of annual leave and higher than 9.5 per cent Super. We just get the job done and don’t whinge. Shipping lines recently implemented a congestion tax also adding to the pressures of our international trade community.
SMEs in international trade – my very precious tribe I should add – operate in a highly complex regulatory framework carrying huge risk every day. Customs clearance and quarantine issues are complicated, the majority of transactions are in USD and other foreign currencies. Most businesses offer credit terms of 30 days +. Keeping in mind that a container can be on the water from two weeks to six weeks depending on its Origin. So, the lag between financial outlay to actually getting payment can be up to three or more months.
No magic formula at the moment for importers and exporters. My advice is to work closely with your freight provider to assess all options. If getting an order to a client is a deal-breaker then maybe airfreight can be a band-aid on an isolated occasion. Rates are through the roof, space is tight and all those Tier one contracts we, as freight forwarders, have worked years to achieve are now on life support. Incumbent on us in the International Trade community to rebuild because we are an essential service and Australia is an Island. I applaud our PM for coming out in our defence on 29 September. Great that various journalists highlighted the gravity of this gratuitous dispute. A huge thanks to Peter Switzer in the Switzer Daily, Jared Lynch from The Australian for calling this issue out.
We will all wear the additional costs in months to come, this situation will not resolve easily. Some major reforms are needed on the Waterfront. All sides should set aside respective ideologies and sort this out once and for all. We cannot continuously be held to ransom when many of our fellow Aussies are desperately trying to survive in particular the travel, tourism and events sector. SMEs are the lifeblood of our economy and deserve far greater respect.