Supply chain devastation without clear Covid-19 plan, Ports Australia warns

The nation’s supply chains could be ‘devastated’ if the Morrison government drags its feet on outlining Covid-19 safeguards for the industry.

Ports Australia chief executive Mike Gallacher warns poor contingency planning could see ‘unprecedented shutdowns’. Picture: Mark Scott

The nation’s supply chains could be “devastated” if the Morrison government drags its feet on outlining Covid-19 safeguards, with Ports Australia chief executive Mike Gallacher warning that poor planning could see “unprecedented shutdowns”.

With Premiers increasingly outlining their intention to live with the virus, Ports Australia has called on governments to immediately lay out their supply chain plans once states and territories begin accepting higher case numbers in the community.

Mr Gallacher said there needed to be greater clarity about whether close contacts would be forced into isolation if ports and logistic centre workers were infected and terminals exposed to Covid-19 would be required to close for deep cleaning.

He said delays could be ­calamitous for the economy, with about “99.95 per cent” of the country’s freight arriving on ships.

Mr Gallacher said the supply constraints that were laid bare at the onset of the pandemic could be magnified if the government did not provide industry with details on how living with the virus would work. “The fragility of our economy and the looming threat of a recession will be crystallised like never before if we see unprecedented shutdowns along the supply chain,” he said.

“We still joke about toilet paper. But that was at a time when the supply chain was functioning … you can only imagine what that panic will be like if an important port is closed.”

The warning came as a new analysis revealed the infrastructure sector had suffered a sharp contraction, with major construction and asset maintenance contracts plummeting by 67 per cent between July and August.

Severe lockdowns imposed across Greater Sydney, Melbourne and the ACT have shuttered economies, and NSW Premier Gladys Berejiklian’s 12-day ban on construction and building in mid-July caused ­delays for infrastructure project approvals.

The August iteration of Infrastructure Partnerships Australia’s The Pipeline Report revealed worksite restrictions and the broader disruptions of lockdowns had seen activity fall precipitously, with only two contracts awarded worth $1.4bn in August.

For July and August, the $5.5bn worth of contracts awarded represented just 19 per cent of the value of contracts awarded in the back-end of 2019.