Survey reveals port disruptions the biggest risk to supply chain efficiency in 2021

Australian manufacturers are being warned to expect further delays from China as 2021 ramps up.

A leading global freight forwarder has surveyed its customers to understand the key issues supply chain experts anticipate this year.

Three quarters of respondents to the C.H. Robinson survey said they think the biggest risk to supply chain efficiency is port disruptions.

The ensuring ramifications to those disruptions such as sea freight capacity, equipment shortages and an overall increase in supply chain costs due to increasing rates and delays were also factors.

While some ports have seen a reprieve, others such as the Ports of Auckland, Sydney and Melbourne are still facing immense delays as Chinese New Year shutdown approaches.

“We are currently facing very tough market conditions across all modes of transport on a global scale,” C.H. Robinson Vice President Oceania Andrew Coldrey said.

“With port disruptions resulting in a lack of available containers, trade wars, the continued impact of COVID-19 and biosecurity risks, there is a lot to consider and anticipate this year.

“Our research demonstrated 60 per cent of our customers have a risk management plan in place, a heartening statistic, as those who are able to stay nimble and flexible throughout this period of uncertainty will be able to adapt and thrive,” Mr Coldrey said.

The second biggest risk according to C.H. Robinson’s diversified clients were the continued COVID-19 restrictions, closely followed by customs delays and trade wars.

COVID-19 is still a major factor in 2021 as parts of the world remain in lockdown and air freight capacity continues to be lower than demand, due to the diminished number of passenger flights.

When compounded with the global port disruptions and delays due to industrial action, looking for ways to mitigate these risks are crucial.

“Once risks are identified, the next step is to implement plans to mitigate them.

“Becoming a member of the Trusted Trader program not only shortens the time goods spend in customs but enables customers to defer duty on imported goods to pay a compounded monthly sum, supporting cashflow,” Mr Coldrey said.

Seventy-seven per cent of customers saw risk analysis and mitigation as either extremely important or very important to maintaining a healthy organisation.

Implementing tactics such as a diversification of supplier and consolidation of air and ocean freight methods, holding buffer stock, forward planning to anticipate demand and constant communication with forwarders were among those most widely utilised.

This year will be unchartered waters and as we venture into a new world. Risk analysis and mitigation are among the actions organisations can take to be prepared.