BLINK your eyes and there are another ten layers of complexities to overcome. No different to anyone else, the logistics and shipping industry are working through the challenges of the day and trying to predict the challenges of tomorrow – at least the challenges of yesterday have already been wiped off the whiteboard.
Tasmanians should be quite proud of the supply chain champions of our state. That whiteboard has been getting quite a hammering of late and to the credit of everyone who drives a truck or forklift, works in a warehouse, stevedores on a wharf, crews a ship, and pilots an aircraft and a long list of everyone else that lives in the freight world, by and large freight is moving. Never before has our understanding of living on an island at the bottom of the planet loomed as large.
Tasmania has three primary methods for the movement of goods between our island and the other one. Toll, Searoad and TT Line (there are other services for bulk materials and between King Island and Flinders as well as airfreight). At the moment these lines are at capacity with a variety of goods as the normal trade of inbound cargoes mixed with the influx of resupply for supermarkets adds the pressure. The main hurdle preceding the virus was the drain on capacity due to operational constraints on the Toll vessels (cyber-attack, industrial disputes on Webb Dock, backlog of cargoes due to weather and technical events). These issues have been largely resolved presently, however the capacity (for all services) are being managed on priority and this causes some stresses on various industries – one representative said to me that “needs overtake wants” – seems to be a pretty good summary of everything these days.
One looming issue for Tasmania is the supply of empty equipment for our larger exporters. With backlogs of international import freight in Melbourne (at time of writing about 140 containers) this impacts the equipment flows that allow our manufacturing industries to accommodate their exports. As a result of this, volumes of non-perishable loads can sit idle for a period of time that has the potential to worry buyers internationally around security to supply. As these companies contribute to a large employment base as well as most of our power usage there is some cause for concern about the empty container flow in the months ahead.
The good news on this front is that there are strong discussions underway as to how to work on these backlogs and to work on solutions for the supply of empty equipment for Tasmania. That said however, the challenge is not only locally, but also globally with the world’s trading balance being tipped on its head. In the media you hear stories of retail stores closing down, everything in those stores arrive here from overseas in a container and if these containers are not coming in with goods then the lack of the containers will impact on exporters eventually. On a positive note there have been assurances from TT Line that despite the reduction in domestic tourist travellers, the Spirits of Tasmania will continue to run for freight and therefore increasing capacity for trailers particularly.
Airfreight exporters are feeling the pain considerably at the moment. If your market is export of perishable goods to overseas destinations (or even import of medical equipment by aircraft) then the cost base and availability of space on an aircraft has just fallen off Niagara Falls. The general public see the stories of restrictions of movements of people and airlines stopping flights, but what most don’t know is that the majority of the space in an aircraft is not used for baggage, but for freight. Lose passenger flights and you lose the space to access markets. At the time of writing there are a subset of people working on freight charter aircraft and whilst usually there is always an answer to get something from A to B it is definitely coming at a cost.
Airfreight rates are going through the roof and rates can change by the hour. I recently worked on a solution for a well-known Tasmanian business requiring some essential materials for their facility to continue to operate. At time of quoting the customer the rate was EUR8.50 per KG ex Germany to Melbourne. By the next morning it was EUR16.00 per KG. These are not uncommon stories. Tasmania has a very strong aquaculture industry that requires price suitable solutions to supply export markets – these are becoming very hard to come by. That said, the Tasmanian Government are working tirelessly with industry and exporters on potential solutions that at the time of writing is not precluding a direct freighter service ex Hobart to Asia – although it is early days.
It has to be said that the Tasmanian government has stepped up in relation to freight (in all things in my opinion – great work Tasmanian Government). There are regular discussions between the various industries on virtual meetings chaired by Minister Ferguson. These are broken down to road, rail, air and sea with industry leaders from all sectors contributing with issues that they see to be pressing. On all occasions the government have been excellent in ensuring these concerns are documented and addressed. I know that I have been contacted directly by the minister and government staff on many occasions around topics of concern with the outcomes always being a commitment to address and find solutions – on more occasions than not the issue at hand is resolved within hours rather than months. Kudos to the leaders of our state – they are making decisions quickly and collectively and Tasmanians should be grateful for this as this is exactly what is needed to keep goods moving.
The only thing that appears to be certain at the moment is that my fourteen-year-old doing schooling at home is becoming an absolute expert in something called Rocket League on the X Box. Everything else is being worked on and changing by the hour. Good luck out there and keep safe.
Brett Charlton is the chairman of the Tasmanian Freight & Logistics Forum
