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Shipping Delays: Update February 2022

In a world that has changed dramatically since the start of the pandemic, 90% of the world trade continues to move by sea.  What was once a highly synchronised global shipping system has spun out of rhythm.   In 2021, record vessel delays and clogged ports drove container shortages, and led to further vessel delays.  As has been widely reported, securing space on container ships has come at significant premiums, up to 7 x pre-pandemic levels, while at the same time global delivery reliability levels have reached historically low levels.

As we head into 2022, there has been little relief.  Globally, ports remain congested as they try to deal with the backlog of shipping containers.  Wharf and logistics staff are in short supply due to illness or the need to isolate.  Trade routes to Australia are among the worst hit and there is no sign of additional capacity coming to Australia in the medium term.  The challenge is such that the Productivity Commission has commenced an inquiry into the infrastructure issues hurting Australia’s maritime logistics, examining both the economic impact of delays and rising freight costs.  Further investment is no doubt required to make our ports more efficient, however, their report is not due until August and the investment program will take much longer to deliver.

Since the beginning of 2020, Confoil has worked diligently to secure the raw material and imported products pipeline, proactively pulling orders forward and buffering lead times.  We have worked closely with our major suppliers and freight forwarders to secure capacity.  Despite these efforts, we continue to be challenged with ever changing arrival dates which disrupts supply reliability. Similarly, we like many other businesses, have been faced with a fluctuating workforce and shifting production schedules as we try to balance both labour requirements, the supply of raw materials and the ongoing implementation of our COVID safe response plan.

We’re here to help in any way we can and are also extremely mindful that our customers are also facing challenging times.  If you have any further queries, please contact your Confoil representative so that we can assist in addressing your queries as quickly as possible. Stay safe and stay well, Alison Buxton, CEO.