Another supply chain crisis like the one experienced during the pandemic, and again this year after floods cut the WA-east coast rail connection, will hit once more in 2024.
International supply chain expert Kelly Crossley, owner of Transitainer WA, said recently imposed US tariffs on Chinese imports were impacting the availability of containers and ships, and increasing congestion in major ports like Fremantle and Singapore.
A supply chain crisis, like the one Australians experienced during the pandemic is looming for WA.
She said the crisis would worsen in the months leading up to Christmas and consumers could expect higher prices, delivery delays and empty shelves.
“Two weeks ago, the US announced it was slapping severe tariffs on a broad range of Chinese imports, from electric vehicles and solar cells to steel and aluminium products,” she said.
“To beat the August 1 deadline for the new tariffs, Chinese exporters are rushing to get their products to the US, leading to a massive spike in the cost of containers, a shortage of ships, and lengthy delays in ports.”
Crossley said the new tariffs would particularly impact WA.
“All cargo transits via Singapore for Fremantle, so the current congestion is already starting to impact WA inbound sea-freight,” she said.
“It’s going to get worse, and we have not even started the peak period yet. Rates will increase, getting space and empty containers is becoming difficult already, and I am trying to prepare my customers and alert them to brace themselves as we are in for a rough ride.”
Crossley said the peak period started in August and continued until the end of the year.
An S&P Global Market Intelligence spokesman said the logistics sector couldn’t catch a break.
“A new round of disruptions to operations at Asian ports has elevated shipping rates again, and the Atlantic hurricane season is set to be more active than normal through the peak shipping period,” he said.
Supply chain shortages caused empty supermarket shelves during the pandemic. Credit: Kate Geraghty
A Coles spokesman said they were monitoring the situation but were yet to see immediate impacts.
The state government last year released a discussion paper that found the WA economy relied heavily on commercial shipping, with more than 1 billion tonnes of trade annually through its major ports.
It formed the WA Shipping and Supply Chain Taskforce in March 2022 in response to supply chain issues, focused on investigating capacity for increased use of coastal shipping for interstate and intrastate trade.
The taskforce found WA was particularly exposed to shortages of essential goods and increased costs, due to its isolated location and long supply chains, both land and sea.
The state also relies on the import of processed goods, especially since much national manufacturing and processing is concentrated in Sydney and Melbourne.
After flood events, more than $200 million will be spent upgrading large sections of the Trans-Australian Railway Line so the vital east-west freight link can withstand one-in-100-year weather events.
The network was heavily impacted in 2022 during a once-in-200-year flood.
The Eyre Highway was also closed and substantially affected the supply of essential groceries and other goods to Perth and across the state.
It was also closed in March due to floods.
The rail line delivers more than 5 million tonnes of freight each year and carries 80 per cent of grocery products sold in WA’s supermarkets. Stocks were not fully replenished until mid-year.
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