Omicron wreaking havoc with international supply chain

Paul Zalai, Director of the Freight Trade Alliance. Photo supplied: Paul Zalai

With the Omicron variant ravaging the country, supermarket shelves are empty, and truck drivers are either isolating and awaiting PCR test results or are sick at home with COVID.

But the latest wave is not only affecting these Australian industries, it is also impacting the international supply chain.

Paul Zalai, the Director of the Freight and Trade Alliance (FTA) says Australians see what the mainstream media presents to them: food shortages, and disruptions to various public and private sectors. But they do not know see the difficulties the international supply chain faces.

He says one of the major stevedores, DP World reported 10 per cent of its workforce was ill with the Omicron variant.

Transport, depot and warehouse operators say the virus has affected somewhere between 20 to 50 per cent of their employees.

“We’re still hearing that the whole supply chain is still feeling the effects of the Omicron wave,” Paul says. “We really hope what we hear in the media is true that you know, we’re over the worst of it.”

There are problems with transport schedules, returning empty containers to nominated yards, and there are not enough approved facilities to handle goods that need to be inspected or treated by biosecurity.

These factors are causing delays to the release of cargo and imports.

“The immediate concern is that this will lead to container detention penalties administered by international shipping lines for the late return of empty containers,” Paul says.

“Those fees can be anywhere from hundreds to thousands of dollars.”

He also says the state governments have made exemptions for workers to return to their jobs even when they are a close contact of a COVID case, and that this has given the sector some relief.

Besides the need for more rapid antigen tests, he adds there is not much more the state governments can do to help.

Despite the much-needed relief from the pressures caused by the Omicron wave, many recovering workers are returning to their roles while still suffering from COVID side effects.

One of the common side effects they are experiencing is “brain fog.”

“[It’s]a concern when you’ve got staff members using heavy equipment and potentially dangerous equipment,” Paul says.

“And those who have been able to avoid the virus have been working extensive overtime to keep freight moving which has been very much appreciated, but it also does pose potential risks of fatigue and mistakes being made.”

He also attributes mistakes being made due to general fatigue induced by the pandemic itself.

In one incident, a container stack fell on a truck. Luckily though, nobody was hurt. There was, however, another workplace accident where a worker was killed.

“It’s important that employers still need to bear obligations to provide workers with a safe workplace,” Paul says.

Transport and depot sectors are rejecting work because they have insufficient staff, and the remaining employees are struggling to finish current jobs.

“What we may see is just further delays in the supply chain which will result in more costs, and that will ultimately add to the inflammatory pressures that we’re experiencing for services,” Paul says.

Although times are tough for the industry, Paul is “hopeful” the “shipping lines will have an appreciation of the current operating environment.”

The shipping lines charge “significant” container detention penalties if the empty container has not been returned on time to the nominated premise.

Pre-pandemic, the regular timeframe would be seven to 10 days. Due to the constraints from the Omicron outbreak, it could take much longer.

“We hope that the shipping line shows some leniency,” Paul says, “and gives concessions to the industry in this situation.”

All the major shipping lines have rejected a blanket exemption although some will examine the detention fees on a case-by-case basis.

Paul says the FTA submission on the Production Commission Review on International Shipping to the Commonwealth government has been “commissioned.”

It has included looking at the need for a reform of industrial relations at waterfronts, and changes to competition law that currently gives an exemption to international shipping lines as derived from the Competition & Consumer Act.

“The federal government’s been very focused on trade liberalisation measures such as free trade agreements and implementing initiatives such as the simplified trade system,” Paul says.

“But again, our message back to government is that’s all going to count for very little if we can’t get goods on ships.”

He says the good news is the dispute between Patrick Terminals and the Maritime Union is “still requiring ratification from the Fair Work Commission” but is going “well.” It should give an enterprise agreement between the parties for the next four years.

“We are seeing a lot of people actually even wanting to exit the industry altogether,” he says, citing the global Great Resignation phenomenon.

“But the pressure on the supply chain, whether it’s the physical workers at the wharf through to the clerical, and administrators or feeling the pressure, there’s a lot of tension, and it’s a real problem to the sector.”

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