The level of excitement builds as we move out of lockdown and head towards the new “living with COVID “ normal.
Returning to the things we enjoyed is part of the excitement, with the opening of retail, entertainment and hospitality.
However, for these sectors there are significant challenges ahead - putting Pad Thai on the plate is not as easy as it used to be as a result of significant strain on the global supply chain during COVID 19.
Australia and Thailand have always been strong trading partners and two-way trade between Thailand and Australia during 2019 and 2020 was $21.6 billion - making Thailand Australia third-largest trading partner.
In the past year, this flow of trade between the two countries has been seriously affected by the impact of COVID 19 on the global supply chain and trading levels have fallen significantly
COVID 19 triggered a giant domino effect that has toppled all the way down the supply chain.
In September Asia’s manufacturing and production industries had broadly stagnated as pandemic induced shutdowns swept across the region forcing shutdowns.
Production levels fell and availability of stock was limited due to factory closures and staff shortages and quarantine requirements. Raw material shortages added to the problem.
In early 2020, some companies forecasting reduced sales during the pandemic, reduced production on long lead time products [eg. Salmon] and this has contributed to current shortages.
Transport and logistics were stretched to the limit due to limitations in the aviation industry. Airfreight costs soared due to reductions in international flights by major freight carriers
Shipping, the traditional source of cost-effective logistics came under significant pressure as supply and demand strained capacity at every level.
Increased demand for freight came as every world government looked to infrastructure building as a way out of the global crisis.
Essential goods backed up behind building materials and minerals.
Consumers also moved expenditure from consumption of services to consumption of goods as online shopping exploded during the pandemic
Every cargo ship was at capacity and a worldwide shortage of containers compounded the problem. Australia was unable to assist as we have no shipping fleet of significance.
Ports in China, Japan, Singapore, Vietnam, Thailand and Australia struggled to cope.
Additional skilled labour was difficult to source quickly in an area where stringent industrial relations practices control the workforce.
The Maritime Union of Australia is conducting “go slow” and rolling stoppages across Australian Ports through October and November.
Finding slots to land your containers became limited and 8-12 week shipping times have blown out to 18 weeks
Delays ensued and prices skyrocketed, thus creating a dilemma for traders as the whether or not to pass on these costs to suppliers and consumers.
There is a giant traffic jam in the global supply chain
Open supply channels are critical to the supply of food and beverage between Thailand and Australia and blockages in the supply are frustrating importers.
Suppliers are experiencing delays, stock shortages and in fresh produce, limited availability of labour to pick seasonal crops.
This has led to stockpiling and additional orders, as suppliers struggle to continue regular supply and this in turn impacts on cash flow and costs.
The repercussions of this are likely to be felt until well beyond December, as the backlog clears and exporters deal with the Christmas rush and uptake in post lockdown consumption.
So if you are planning a special purchase or even thinking of Christmas shopping or Christmas lunch it looks like it would pay to consider the weak links in the supply chain and order sooner rather than later
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