6 steps towards a global maritime disaster

It takes a lot longer for your articles to reach you. That is why. (Photo: Getty).

Subscribe to Yahoo Finance Bulletin for part two, where we explore what the shipping crisis means for your Christmas gifts and new delivery times.

Australia is 79 days away from Christmas, but buyers have been warned to enter early or risk disappointment as global shipping costs hit record highs and delays are not expected to decrease for some time.

There are several reasons for this, and they’re unlikely to resolve anytime soon, said Bureau of Logistics executive director Steven Thacker. Yahoo finances.

“It’s a perfect storm,” he said.

This is how we got there:

1. Global Pandemic Shipping Containers

Shipping containers used to transport goods around the world are in high demand and prices are skyrocketing.

As of September 30, it.

In March 2019 it cost US $ 1,322.73 and in March 2020 it was not much higher at US $ 1,483.46.

But the problem is not the lack of shipping containers: the problem is that they are just in the wrong place.

Much to blame is COVID-19. Most of the world’s maritime traffic is between the United States and China, and Europe and China.

And the important thing to understand, Thacker said, is that the United States tends to import more from China than it exports.

“When COVID first hit, demand initially leveled off and empty containers were therefore stranded in the United States, and shipping companies were unwilling to bear the costs of returning ships to China, full. of empty containers that they don’t get paid for, ”Thacker said.

“So a significant number of empty containers around the world are in US ports, and there is no way to get them back to China.”

This results in delays of several weeks in accessing and loading containers on ships.

2. Lack of passenger flights adds additional pressure

The lack of air transport has put additional pressure on maritime transport.  (Photo: Getty).

The lack of air transport has put additional pressure on maritime transport. (Photo: Getty).

The pandemic has also hit air travel hard around the world.

“There is a significant amount of cargo coming into this country that comes into the belly of passenger planes,” Thacker said.

Using the hull of an airplane to store cargo has always been a relatively inexpensive way to transport cargo.

Without this artery, the pressure on the maritime network is even greater.

And while the rest of the world reopens, Australia is still at least a few weeks away from opening its international borders.

“Global shipping lines will continue to be affected until we see the resumption of consumer air travel,” said Shippit founder Rob Hango-Zada. Yahoo finances.

3. The big ship is getting really, really stuck

The blockade of the Suez Canal only exacerbated the problems.  (Photo: Getty).

The blockade of the Suez Canal only exacerbated the problems. (Photo: Getty).

To make matters worse, in March 2021, the 200,000-ton Ever Given vessel.

The, but logistically, this posed a huge nightmare.

The skyscraper-sized ship was stranded there for six days before being finally freed in what Thacker called a “debacle”.

About 12% of global trade passes through the Suez Canal, meaning queues of around 350 ships were waiting to cross the blocked canal, completely crippling the global shipping industry.

The problem was, once it moved, about US $ 9.6 billion in global shipping – or enough freight to fill 900,000 apartments -.

Cue a traffic jam of epic proportions.

4.COVID-19 triggers e-commerce boom

Australia Post was flooded.  (Photo: Getty).

Australia Post was flooded. (Photo: Getty).

Then we have COVID-19 which has severely damaged the global logistics workforce.

“COVID-19 has meant that labor productivity at ports around the world has declined as they have security checks, COVID testing, social distancing and have to clean cabins on shift change,” Thacker said.

At the same time, stranded people across the world have taken to online shopping.

According to Australia Post, it now delivers more than 10 million packages across Australia per week. This is a volume that was previously only seen during the Christmas shopping and gifting season.

In early September, he said he would have to do this with online retailers in NSW, Victoria and ACT due to the large number of packages.

It again paused for package pickups from businesses in metropolitan Greater Melbourne at the end of September for five days.

And on Monday, an image was widely shared showing an Australia Post distribution center.

5. Add a labor shortage

Almost due to the Delta outbreak in the state, adding additional pressure to a struggling system.

We are also short of couriers and truck drivers.

“There is a lack of transportation to get it from ports to where it needs to be, again… due to the fact that COVID is affecting truckers. There aren’t enough of them in the country to begin with, and COVID has made the situation worse, ”Thacker said.

In late August, truck drivers warned them, saying confusion over border pass rules and competing testing requirements had resulted in loss of work and delayed deliveries.

6. Tired couriers and handlers go on strike

Port and courier workers across Australia protested against wages and conditions.

Every Monday, Wednesday and Friday in October in Melbourne, while the Port of Brisbane would see workers go on a 24-hour strike on October 13.

The port of Fremantle has already seen a 48-hour shutdown in September, while a strike was also scheduled in Sydney for the first weekend in October.

The union says employer Patrick Stevedores has decided to increase the casualization of the workforce and not pass the higher wages on to current employees.

Patrick Stevedores foresees delays of up to a week due to the strike.

In addition, until September 22, while September 30 to protest the outsourcing of labor to contractors and companies like Amazon.

“There is this precariousness of the workforce. Historically, courier companies or logistics providers could plan very efficiently because they knew how much capacity they would need at any given time, ”Hango-Zada said.

“With the fluctuations in e-commerce demand overnight, they are faced with a huge volume to clear in their warehouses and deliver to consumers. “

Consumers increasingly expect their deliveries to arrive quickly, putting increased pressure on delivery providers, who see the solution as hiring casual workers and casual workers.

“It really goes against a lot of the agreements that these carriers have with their workers, which really creates a challenge.”

As Thacker summed it up: “You put it all together and you end up with a train wreck.”

Subscribe to Yahoo Finance Bulletin for part two, where we explore what the shipping crisis means for your Christmas gifts and new delivery times.

Sign up to receive a full briefing every business day and rich thinking every fortnight, straight to your inbox.

Register today!