Page 4 - Climate Control News November 2021

Editorial
Climate Control News
EDITOR
Sandra Rossi Ph: (02) 9213 8277 sandrarossi@yaffa.com.au
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Lost at sea
COVID-19 HAS
DISRUPTED GLOBAL
SUPPLY CHAINS
AND CREATED
HAVOC FOR LOCAL MANUFACTURERS
AND HVAC CONTRACTORS.
Sandra Rossi – Editor
THEY ARE DEALING with serious delays at a time when everyone is gearing up for the busy summer months ahead.
According to HVAC contractors and manufac‐ turers it is proving to be a costly problem (see our special report on page 14). It has forced a number of companies to rethink supply chain models, es‐ pecially their dependence on China for raw materi‐ als and finished products.
According to Deloitte, China’s dominant role as the “world’s factory” means that any major disrup‐ tion puts everybody at risk.
“More than 200 of Fortune Global 500 firms have a presence in Wuhan, the highly industrialised province where the outbreak originated, and which has been hardest hit,” Deloitte said.
Everyone is competing for container space and paying record prices for the privilege.
The cost of sea freight has skyrocketed. For example, the cost of shipping a 40 foot contain‐ er from Shanghai to Sydney on the spot market has doubled.
Importers claim freight costs have risen 20 to 50 per cent over the past year.
Shipping Australia figures show the median cost of shipping a 20 foot export container from Australia to China has increased almost 40 per cent over the past 12 months.
The most expensive trade route is Shanghai to Rotterdam where spot rates for a 40 foot container have soared 518 per cent since June last year to $13,513.
Recognising the need to act, the federal govern‐ ment announced a report to identify Australia’s supply chain vulnerabilities.
The final report, which was undertaken by the Productivity Commission, has just been released.
The report considers the factors that make sup‐ ply chains vulnerable, with a focus on the interna‐ tional linkages and dependencies from trade. It provides a framework to manage supply chain risks and is supported by the creation of the Office of Supply Chain Resilience.
The new office was created to monitor vulnera‐ bilities and coordinate whole‐of‐government re‐ sponses to ensure access to essential goods. Despite the disruptions don’t get lost at sea this Christmas, stay afloat and enjoy the spoils of a busy summer. ✺
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