07/01/2022 - 15:12

WA warned to brace for disruption

07/01/2022 - 15:12

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The state has just more than a month to prepare for multi-million dollar supply chain disruptions similar to those hitting Australia’s east coast.

WA warned to brace for disruption
Transport and logistics is critical for WA's economy. Photo: Gabriel Oliveira

The state has just more than a month to prepare for multi-million dollar supply chain disruptions similar to those hitting Australia’s east coast.

Growing outbreaks of COVID-19 are having a big impact on the country’s workforce and a flow on effect for businesses.

It’s not just workers who are sick, it’s also those required to isolate to prevent further spread, and their close contacts.

The biggest example is New South Wales, with more than 230,000 active cases and a shortage of rapid antigen tests for potential COVID cases to confirm their status.

Among the sectors under pressure is transport and logistics, leading to delays in movement of freight.

It is expected Western Australia will see a substantial COVID-19 outbreak when it reopens its borders on February 5th.

WA is at particularly high risk of supply chain disruption, Western Roads Federation chief executive Cam Dumesny told Business News. 

“We are one of the most remote economies in the world,” Mr Dumesny said.

“We rely heavily on road and rail to bring (goods) from the east coast.

“(And) then we have to distribute (items) around the state.”

An outbreak at a major freight business could lead to delays in moving equipment to major project sites, or shipments of food, pharmaceuticals and necessities from the eastern seaboard.

Mr Dumesny said surging case numbers were collapsing some supply chain systems in the east, with absenteeism of up to 40 per cent reported.

Coles and Woolworths each only have one major distribution centre in WA, with a big distance to other capitals, Mr Dumesny said, another potential risk point.

Retail giant Woolworths Group is one example of how pressure can quickly build.

More than 20 per cent of workers in the company’s distribution centres are out of action because of COVID-driven absences, Woolworths chief executive Bradford Banducci told customers in an email today.

About 10 per cent of staff in stores are on COVID-19 related absences, Mr Banducci said.

“New South Wales is currently the most affected, although we are seeing impacts across the whole country, and it’s not yet clear how soon the system will come back into balance as we move through the Omicron wave,” he said.

Woolworths has taken temporary action to substitute products within categories where one brand has a shorter supply.

The United Kingdom is a further, extreme, example.

Shortages of truck drivers led to fuel shortages in 2021, while it was reported earlier this week that London, Gloucestershire, Somerset and Buckinghamshire had scaled back bin collection services because of isolation of workers with the virus.

In WA, the risk is not just freight movements for retail or supply, but also major export industries.

Commodity exports including gold, grain and iron ore use road transport to move products to port.

Mr Dumesny said businesses needed to build up their supply chain resilience now and apply solutions used in other parts of the world.

One big move would be to ensure an adequate supply of rapid antigen tests and make them available at a subsidised rate for freight industry workers, he said.

Cook confident

At a press conference this afternoon, Acting Premier Roger Cook said he was concerned about the supply chain impact seen interstate.

"Supply chains (are) a concern, the overall workforce impact across a whole range of industries you're now starting to see take effect," Mr Cook said.

"Our big supermarket chains, I know they rely very heavily on their national supply chains.

"The government hasn't been told of any supply shortages for Western Australia, but this is a reality of COVID-19."

He said the community in WA had managed the disease well with a low incidence of the disease and expanding economy.

"I think Western Australians have demonstrated that they have the mettle and the courage to do all the right things to keep each other safe," he said.

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