Category: Industry News

Experiencing freight delays in Australia? This is what is behind the current slowdown on package deliveries, as explained by industry insiders.

 

There is no denying these are challenging times.

After weeks of lockdown and a perfect storm of surges in demand and workers being forced into isolation, many businesses and their customers are feeling the effects of freight delays.

At EFS, we are in constant contact with freight companies around the country. Recently, our contacts have shared some of the reasons why many deliveries are taking so much longer than usual.

Firstly, extra safety protocols are slowing down production chains, especially in NSW and Victoria, which have been in lockdown for several weeks. In line with the Government directive, many transport companies are operating at reduced on-site staff and have social distancing measures in place. This slows down the sortation processes at the depot level.

Many businesses are operating on reduced hours or with people working from home, which puts further strain on things. With fewer administrative staff on-site, there are delays to POD uploads and manual POD deliveries.

Out on the roads, drivers are being delayed at border checkpoints as authorities check to confirm if they can travel to their destination.

Those who are travelling interstate must be tested for COVID every three days. If they come down with a slight cough or sniffle, they are asked not to come to work until they have a negative test result. This is exacerbating driver shortages which were being experienced even before COVID.

If there does happen to be an infected worker, those who have been in contact with them are required to stay home for up to two weeks. Subcontractors are called in but they are unfamiliar with runs and it is understandable that delivery times are extended.

On the retail side of things, many businesses are closed, meaning excessive freight is left in the depots. When it comes to supermarkets, outbreaks in staff and cleaners have resulted in people being forced to stay home from work. There are fewer workers to restock shelves so there is a backlog on orders once staff do return to the job.

With everything above going on, it is easy to understand why there are so many delays. Deliveries that would usually take place overnight or within a couple of days are blowing out to more than a week. Even getting through to customer service teams can be difficult because of the high volume of customer calls.

The delays are being reported widely online, with Business Insider sharing that Australia’s online shoppers may face delayed parcel deliveries through to Christmas. Australia Post has even paused pick-ups from e-commerce retailers for three days in September in order to reduce the strain on the nation’s delivery system amongst record parcel delivery volumes.

On a side note, Australia Post has been able to help those out of work by creating new jobs to meet the current demand for deliveries, which has understandably increased as people shop from home.

We know from speaking with freight providers that everyone is doing their utmost to meet demand and keep people informed. The good news is that the Government is also on side, with Infrastructure and Transport Ministers putting measures in place including:

• The removal or suspension of curfews for heavy vehicle deliveries
• Freezing heavy vehicle charges to support the operators of heavy vehicles, many of whom are small businesses
• Granting a national exemption from border restrictions for non-cruise maritime crew for the safe movement of crew into Australia and across borders
• Allowing roadhouses, truck stop facilities and truck driver lounges to remain open
• Establishing national consistency for the movement of freight across domestic borders.

The above are helping to ease the pressure but the best advice right now is to order as far in advance as you can, communicate with customers and make a plan to accommodate a surge in ordering over Christmas, such as adding Christmas delivery cutoff dates to your website so buyers know they need to place orders sooner rather than later.

Need support to lock in a delivery provider? Talk to the experts at EFS.

COVID is having an impact on supply chains around the world. Find out what is causing the gridlock and how to ensure your business survives.

Our world has been a global society in many ways for most of this century. With the rise of the internet and connected devices in our hands, it has been easy to order whatever we want, from wherever we want, and to have it show up in a matter of days. This has led to an incredible rise in productivity and business opportunities.

However, the COVID outbreak has proven to be a massive disruptor when it comes to global supply chains. Take a look at what happened during COVID and how you can protect your business from future interruptions.

The impact of COVID on the global supply chain

 In previous years, demand has more or less followed predictable patterns. People shop more at Christmas. They buy warm clothes in winter. They order the same amount of food every week and there is a balance between people spending their disposable income on travel, luxury purchases and home upgrades.

During COVID, many suppliers found themselves selling out of months’ worth of products overnight. There was the initial rush on toilet paper and supermarket staples, which saw shelves stripped bare. As the virus continued to spread, we all stayed home, spent time on our hobbies and turned to online shopping to kill the boredom. For some suppliers, demand reached unprecedented levels.

To add to this, the world has been going in and out of lockdown for over a year, meaning that even willing hands have been unable to work. The impact on manufacturing has put a strain on everything from gift items to imported furniture.

Unfortunately, most companies were underprepared for what happened in 2020. According to Ernst & Young, only 2% of companies who responded to a survey conducted at the end of 2020 said they were fully prepared for the pandemic. Serious disruptions affected 57% of businesses, with 72% reporting a negative effect (17% reported a significant negative effect, and 55% mostly negative). With so many businesses on the back foot, it’s easy to see why supply chains have been impacted.

 

Overcoming supply chain challenges

 Unfortunately, there is no way to speed up delivery of a product which is yet to be packed at the factory or even manufactured in the first place.

However, there are a few things Australian businesses can do to minimise the impact of further disruptions, which are bound to happen as part of pandemic life.

These include:

• Risk mitigation and planning for a worst-case-scenario
• Building relationships with back-up suppliers in other cities and countries
• Seeking alternatives such as local, Australian-based providers
• Inventory stock to see what you can promote to your customer base
• Identify ways to minimise costs so you can build a cash buffer for the future
• Investing in technology and services that reduce the cost of freight
• Diversify so your business is not dependent on one income source (especially if supplies are coming from overseas)

 

What’s also essential is no longer making assumptions that things will be available. For some brands, this is an opportunity to fill a gap that an international supplier has left in the Australian market.

For any business, successfully navigating global supply chain interruptions is all about remaining agile, being flexible and thinking outside the square in order to adapt to the continually changing conditions.

 

Want help minimising the cost of freight in Australia? Talk to the experts at EFS.

Australia is being badly affected by a global shipping container shortage. Take a look at the reason for this issue and what can be done about it.

“It’s on its way” is a phrase we have come to interpret during COVID times as “It will get there when it gets there”, particularly when it comes to overseas deliveries.

The issue many Australian people and businesses are encountering at the moment is significant delays and disruptions due to a global shortage of shipping containers. So what is going wrong and what are the options for getting hold of products and supplies?

 

The global shipping container shortage

In the leadup to 2020, goods travelled around the world in a relatively predictable way. Major brands were sending goods by air or sea on a daily basis so if something was ordered you would get an estimated due date and there was unlikely to be an issue with its arrival.

Then COVID got in the way of things. All of a sudden, passenger flights have been slashed. As a result, there are fewer opportunities to order goods to arrive by air. For many companies, shipping becomes the only option, resulting in a big squeeze on shipping container supplies.

To make matters worse, many shipping containers are out of operation at the moment, grounded while companies attempt to minimise costs. According to freight forwarding company Hillebrand, “Many factories closed temporarily, causing large numbers of containers to be stopped at ports. To stabilize costs and the erosion of ocean rates, carriers reduced the number of vessels out at sea. Not only did this put the brakes on import and export, it also meant empty containers were not picked up.”

Due to the lack of availability, the other issue caused by the shipping container shortage is that prices have started to climb skyward. CNBC recently reported that “An ‘aggressive’ fight over containers is causing shipping costs to rocket by 300%.”

Companies all over the world rely on shipping, and with the squeeze on availability, it’s little wonder prices are going up. It all comes back to supply and demand after all.

 

Shipping container solutions

While there is an imbalance in availability, one solution is to build more shipping containers. This makes sense, but with materials being in short supply, it’s not something we should hold our breath for in the short term.

The main thing to do is be realistic and anticipate shipping container delays, even if you are promised a delivery date in writing.

And in the meantime, it’s all about coming up with a workable Plan B. Perhaps there are other products to offer during COVID, or old stock which can suddenly be useful. Some Australian brands have pivoted and capitalised on international supply shortages, suddenly finding they are able to be competitive due to unavailability from China and other countries.

The good news is that once items are in Australia it is relatively easy to organise transport. Delays are more likely to be a few days or a week, rather than months at a time. When there is no lockdown, it is pretty much business as usual and rates remain competitive.

 

Want to explore freight options in Australia? Talk to the experts at EFS

Australia is dependent on trucks to transport goods but COVID plus an ageing workforce are putting pressure on the availability of drivers.

Our recent article covered the global shortage of shipping containers  and the impact this issue is having on Australia but we are facing another delivery-related problem that is even closer to home.

With such a large expanse of land, our country is heavily reliant on trucks to transport goods from city to city. And, for the time being at least , those trucks need drivers. However, Australia is currently facing a shortage of people who are willing and able to get behind the wheel.

A few factors have combined to create the perfect storm.

Firstly, COVID has led to increased demand for delivery drivers. Unable to get to the shops, people are making purchases online which need to be delivered to their front door. This includes groceries as well as luxury items.

In WA, long haul truck drivers are in high demand due to a resurgence in the mining industry. However, with mining jobs being very well paid, it is difficult to get the truck drivers to support the demand. As reported by the ABC in August, many companies are finding themselves with dozens of ‘positions vacant’, with the problem intensifying over the past few months.

When state borders are closed in Australia, people seeking work as drivers find it difficult to travel to take up positions as drivers. When borders are open, the increase in local tourism means there is added demand coming from grocery stores and other venues in regional towns, further adding to the truck driver shortage.

COVID has also limited the number of migrant workers entering the country, exacerbating the issue even further. Some advocacy groups are pushing for truck drivers to be added to the priority list for migration so this problem can be resolved, however this is not an easy win right now due to the lack of people able to travel in the first place.

Finally, shutdowns of depots due to COVID outbreaks, and an ageing workforce (the transport sector has the second oldest workforce in Australia behind the agriculture industry) are adding insult to injury when it comes to the truck driver shortage.

Side-stepping the truck driver shortage crisis

If your business relies on deliveries from truck drivers, communication and good relationships are key.

As a customer, you need to work with the resources you have and stay in control of the factors you do have some sway over. This includes maintaining a good relationship with your supplier and giving clear updates to your customers so you can manage their expectations.

Working with a freight agency that deals with carriers on a regular basis and knows who to recommend for domestic freight requirements will also help to carry your business through this crisis. Your agency will have its finger on the pulse and be able to let you know what’s realistically achievable in the current climate.

Going forward, there are plenty of potential solutions, including high-tech delivery options (think drones and self-driving vehicles, which are not as futuristic as they seem), plus the hope of borders reopening to enable an influx of workers. In the meantime, it’s about being clear on what’s achievable and conveying this to your customers so they understand when to expect their delivery.

 

Need a reliable delivery service? Talk to the experts at EFS.