In an open letter, Arthur Tzaneros – ACFS Port Logistics Managing Director and CEO – said ‘just in time’ is an outdated model and ‘just in case’ should be the new norm.
Proactive planning, he said, is critical in this current global logistics climate.
“Increased inventory, higher shipping rates, storage of FCL or palletised goods, access to stock is cheaper than a loss of customer,” he said. “It’s absolutely imperative that importers and exporters start changing their behaviour for supply and start thinking and acting in line with Covid times.”
Looking at potential threats to the supply chain, industrial disputes can be problematic.
“The current industrial dispute between DP World and the MUA is the most threatening industrial dispute since the lockouts in ’98, where the Government and Patrick worked cohesively to shut down ports across the country,” said Tzaneros. “Whilst we don’t expect that to happen this time around, what we are seeing is a long prolonged industrial dispute, that is affecting transport companies, importers and exporters in what I would call, ‘death by a thousand cuts’.”
While ACFS Port Logistics has not taken sides in this dispute, Tzaneros encourages the parties to work it out in a productive and cohesive way without government intervention.
“There is nothing to be gained long term with the workforce, union, or DP World if the Government needs to get involved,” he said. “We need to be reminded that wounds take time to heel.”
Shipping in the Red Sea is another concern as delays and re-routing through Suez Canal can exacerbate shipping rates, transit times and reduce vessel capacity.
“Coupling this issue with Australia’s industrial dispute, there is a real chance that capacity will be taken away from the Australian market,” Tzaneros said. “Resulting in less capacity, bumping of customers on low shipping rates, delays at transshipment ports, and access to containers could be affected as well.”
Other variables to watch include the chance of Covid returning, relations between China and Taiwan, congestion at port terminals (particularly empty container park capacities), road closures across the country and the impact it has on route access, pallet accessibility and shortages in the skilled workforce.
Despite a somewhat dire outlook for 2024, Tzaneros said that effective planning is now critical more than ever.
“Increase your safety stock, keep your inventory storage available here in Australia, and work on the ‘just in case’ principle,” he said. “Don’t run the gauntlet because the challenges we face internationally and locally far exceed Covid times in the supply chain.”
The post ACFS Port Logistics braces for supply chain challenges appeared first on Trailer Magazine.