Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) have received detail from DP World, based on consultation with an external economist, estimating that the Protected Industrial Action (PIA) to date has cost the Australian economy over $1.34 billion since it began in October last year, with losses of $84 million per week.
Specifically, DP World's analysis has found: - $344 million worth of trade is disrupted each week;
- This represents 0.7% of weekly Australian GDP ;
- Over 44,000 containers are currently stalled at ports, and the backlog will take 2-8 weeks to clear depending on when industrial action ends; and
- shipping lines are prioritising loaded containers over empties, stranding thousands and costing transporters millions.
The official DP World media release is available HERE
The timing of this release calling for government intervention is intriguing with DP World and the Maritime Union of Australia (MUA) scheduled to resume bargaining negotiations tomorrow, Tuesday 9 January through to Thursday 11 January 2024.
FTA / APSA anticipate further announcements this week of prolonged PIA.
With no end in sight of the ongoing PIA, FTA / APSA will continue to provide media exposure to increase public awareness of the cause of increased costs and delays for international trade.
Over the last few weeks, it is the Red Sea hostilities that is particularly capturing the media's attention.While making ongoing commentaries on this, FTA / APSA have been successful in also drawing attention to domestic issues affecting international trade and the need for reliable and controlled cost trade gateways at Australian stevedore operations.
4 JAN 2024 : ABC Radio National - Breakfast - Australia"s response to Houthi attacks on shipping in the Red Sea
3 JAN 2024 : 2GB Sydney - Red Sea conflict having impact on Australian trade
2 JAN 2024 : The Australian Financial Review : Industrial action at ports 'bigger problem' than Red Sea attacks
2 JAN 2024 : The Australian : Australian trade flowing from Asia is safe but eventually Red Sea disruptions will hit home
28 DEC 2023 : Australian Business Journal - Global Trade Faces Uncertainty as Global Trade Faces Uncertainty as Red Sea Tensions and Port Strikes Threaten Supply Chains
27 DEC 2023 : SMH: Send navy to the Red Sea for sake of local economy: Dutton
27 DEC 2023 : News.com.au - Price hike fears over Red Sea shipping chaos, crippling port strikes
27 DEC 2023 : The Australian - Price hike fears over Red Sea shipping chaos, crippling port strikes
21 DEC 2023 : The Australian - Red Sea call 'leaving our allies in the lurch'
19 DEC 2023 : Stock and Land - Red Sea freight blockage has potential to disrupt all supply chains
19 DEC 2023 : Australian Financial Review - Freight, oil climb as Red Sea attacks shut down shipping
17 DEC 2023 : ABC News - UK and US shoot down more Houthi drones in the Red Sea as shipping companies pause operations
We are pleased to advise that we received further coverage in the Australian Financial Review - special thanks to APSA member Australian Horticulture Trade and their representatives for explaining the impacts for their product and access to market. We again also engaged with Sydney Morning Herald gaining exposure on the retail sector and impacts to consumers.
Australian Financial Review : Australian grape growers fear export hit from port dispute
Freight and Trade Alliance director Paul Zalai said the industrial action was already causing big delays across the country's ports, and some ships were forced to drop their cargo and leave before restocking with Australian produce.
These delays, in some instances exacerbated by increasing tensions in the Red Sea, could wreak havoc for Australian food exporters.
"In the urgency to get moving to the next port, quite often they just discharge their imports but are not taking receipt of exports. That's leaving containers either stranded at the wharf, or exporters just not exporting for a period of time," Mr Zalai said.
DP World estimates that it has a container backlog exceeding 50,000 units and delays of up to 10 days. A spokesman said it was committed to finding a resolution, and had reached out to the state and federal governments for assistance.
Sydney Morning Herald : Shoppers warned to expect empty shelves, delays if ports strike continues
Freight and Trade Alliance director Paul Zalai 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, Zalai said.
"This will translate to higher costs down the supply chain and paid by consumers, adding to inflationary pressures."
MEMBER FEEDBACK
We again wish to remind members that while we have an excellent relationship with a wide cross-section of trade, agriculture and mainstream media, we need of "real life" experiences highlighting the impacts to business and the wider economy - this is essential to maintain the momentum and interest for what appears will be a long, drawn out campaign.
Should any member or industry participant be prepared to go on the public record, please contact me at pzalai@FTAlliance.com.au on 0408 280123.
Paul Zalai - Director FTA | Secretariat APSA | Director GSF