Tugboat operator, Svitzer will lock out workers from Friday meaning no vessels will be towed in or out of 17 ports in NSW, Queensland, Western Australia and South Australia after a fight with the maritime unions over employment conditions.

The CEO of a leading Australian funding solutions company is warning the standoff will cripple many businesses which rely on imports and exports.

“If the dispute remains unresolved and container ships are unable to dock at ports around Australia, even if only for a few days, the impact will be widespread and severe throughout all sectors of the economy,” OptiPay CEO Angus Sedgwick told Retailbiz.

“The importers of those goods will be unable to deliver the product to their buyers but also the cost of the goods will increase due to increased shipping cost, which are already significantly higher than nine months ago and eroding the profit margin for importers. Where the container ships are transporting perishable goods, if the dispute continues for a protracted period, the goods may degrade or spoil.

“Delayed delivery of spare parts, building materials, fuel and oil will all severely impact the economy. It may mean wholesalers and retailer are without product to deliver and therefore shelves may be short stocked or empty.”

Sedgwick acknowledges that a dispute like this is outside the control of business owners, so the only risk mitigant is to hold additional stock.

“However, this may have a detrimental impact on their profitability as they now need to pay for warehouse storage, insurance and additional freight costs which is why business owners try to manage stock levels to match real time purchases. It is a difficult position for your average Australian business owner to navigate global supply chain issues that are outside their control.”

He recommends business owners look to implement the following strategies:

  • Ensure customers are making payment within the agreed credit terms (where credit terms are offered), or if possible, reduce/shorten the credit terms
  • If possible, try to build a cash reserve within the business
  • Require a deposit for goods ordered so the customer is contributing to assist with cashflow
  • Forecast likely sales over the coming three months and purchase additional stock understanding this will reduce their profit margin by holding the stock on hand