Industrial action at Australian ports is delaying cargo ships by up to a week and putting more pressure on already stretched regional supply chains, according to the world’s largest container shipping company.

Maersk warned the delays in Australia were adding to reliability and scheduling issues caused by the global surge in consumer demand that shows no sign of slowing down.

A long-running pay dispute between the Maritime Union of Australia and port operators has prompted stoppages at Sydney and Perth.

Maersk expects the industrial action will extend to Melbourne in coming weeks and exacerbate the difficulties of getting empty containers out of Australia, an ongoing structural issue for a predominantly import market.

The industrial action and subsequent delays are one more blow for exporters and importers across the region. A three-week disruption at a Yantian Port, a key departure point for Chinese exports, is still to be resolved and air freight capacity is also about to get squeezed, Maersk’s chief executive of ocean & logistics, Vincent Clerc, told reporters this week.

A COVID-19 outbreak among port workers at Yantian in South China saw the port shut for exports earlier this month. It has since reopened but is not expected to get back to full capacity for some weeks.

China port disruption

”China is an extremely important gateway for us and global trade in general. Right now we have delays of up to 16 days at Yantian,” Mr Clerc said. “We will see lost sailings as a result, which will only add to congestion.

“For us, this is a much bigger disruption than when the Ever Given was stuck in the Suez Canal because of the duration and the importance of Yantian,” he said.

The latest shipping disruption comes as the strong demand for consumer goods that is putting pressure on all freight networks shows no sign of letting up.

One big US retailer, Home Depot, is so frustrated by the delays in getting goods over the seas and on to shelves it announced this week it was chartering its own container ship.

“We have a ship that’s solely going to be ours and it’s just going to go back and forth with 100 per cent dedicated to Home Depot,” chief operating officer Ted Decker told CNBC.

Source: AFR