Expert warns of supply chain issues over Christmas and beyond


Andrew Hudson, an expert commentator in supply chain issues, has called on government for a more internationally co-ordinated approach

Expert warns of supply chain issues over Christmas and beyond
Containers at the Port of Brisbane

 

Rigby Cooke Lawyers' customs and trade partner Andrew Hudson says that the impact of Australia having limited access to the world's supply chains could have prolonged and potentially profound effects on the nation's supply chain while the world tries to resume "business as usual".

"COVID-19 has put global supply chain vulnerability in the spotlight, and Australia's flight caps and the unavailability of reliable sea cargo at reasonable rates have impacted our supply chains significantly. Similar situations in busy overseas markets may contribute to the lack of availability of simple everyday items, even for Christmas and festive goods," says Hudson.

"The sudden acceleration in activity expected with the border reopening is also likely to place further strain on the supply chains that keep factories open, and shelves stocked.

"There are urgent issues that we need to address in the short-term both here and overseas, but there are also opportunities this crisis presents to review the current state of our trade relationships and infrastructure and implement long-term solutions."


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Hudson says that Australia now needs to take learnings from recent events such as the UK fuel crisis, Suez Canal blockage and COVID, and develop crisis response mechanisms for our trade and supply chain so that;

"When crisis strikes, we have done the work to "future proof" our systems and those of our international trading partners. That should also ensure that needed medical equipment gets to less - developed countries in a timely fashion.

"Our response should include creating a robust and affordable supply chain where the establishment of a new Federal Trade Authority (along the lines of the Federal Maritime Commission in the United States) with specialist expertise and powers will become important. Australia also needs to work with other leading supply nations to ensure that our local efforts are supported by our international trade partners and the broader global trade system."

Hudson says that in particular, the government needs to step up its response to possible choke points in the supply chain, with priority being placed on:

  • bringing micro and small to medium enterprise (MSME) along on the journey through more direct engagement and assistance and better access to systems and technology including lowering costs of entry to market
  • spending money on resources, personnel and technology to make these improvements, building on the momentum that we have gathered responding to recent events. This would include continued support to de - regulation and simplified trade systems being developed by the Australian Border Force and the Department of Agriculture, Water and the Environment 
  • improving the movement of containers through ports, stevedores to their destinations and their return and clearance from empty container parks at reasonable costs 
  • invigorating Australia's domestic capabilities such as supporting advanced manufacturing while still supporting goods and services supply from overseas
  • improving our legal infrastructure in relation to trade and customs based, in part, working through the "regulatory sandbox" which will allow controlled tests on different regulatory mechanisms which would not be permitted by current border regulation."

"The work cannot be limited to work on our domestic supply chain issues but our Government needs to continue urgent work in international forums such as the World Customs Organisation, the World Trade Organisation so that international responses are co-ordinated and complementary," says Hudson

"That should include work under the auspices of the Trade Facilitation Agreement and other international agencies. That could also include a new regime removing customs duty and other border charges for vaccines and personal protective equipment and providing priority border clearance required as a response to armed conflicts, natural disasters and pandemics."

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