Getting stuff to you is harder than it looks — and it’s getting harder.

After the COVID years of lockdowns, staff shortages and global supply chain issues, people in the business of moving things around the world are finding new problems.

“It’s just seems like there’s one thing after another keeps hitting them,” says Andrew Schwartz, who brings in goods from around the world as manager of pop culture store Area 52 in Hobart.

The issues are different to the global supply chain constrictions we saw during COVID or that time a ship got stuck in the Suez Canal.

These new problems include increased costs: as ships go further to avoid piracy and conflict zones and the price of insurance premiums to protect them from those risks rockets in price. 

“A lot of stuff we get from places like the US or Japan … and unfortunately that means we have to charge a bit more,” Mr Schwartz says.

“It can be a bit slower to get some of it in, because we’ll get bumped by other people who are in a hurry to get their stuff here.”

Port problems

Saul Cannon runs Australia’s busiest general cargo and container port, the Port of Melbourne.

The port is spending $3 billion in the coming decade on maintenance, expansion and development, pitching a healthy outlook for growth in global trade.

For now though, things are off, says Mr Cannon.

As ever in complex systems, there’s not one single problem in the global supply chain.

And a lot of the issues that caught attention in 2020-2022 have stabilised.

“I guess the interesting thing about working in supply chains is there always is something,” says Mr Cannon, the port’s chief executive.

“Whether it’s extreme weather events that might impact parts of the supply chain, whether it is some of these geopolitical issues overseas … we do see flow on effects right up and down.

“And I guess the big reflection for me is right across the supply chain, is just how connected we all are.”

The metal shipping containers you see at the docks and on trucks are the measure of volume in freight.

Called a TEU — twenty-foot equivalent unit — the Port of Melbourne moves more than 3.2 million a year.

Their average daily trade is 238 TEUs of furniture, 171 containers of appliances and 152 of clothing, alongside an average of 1,373 cars a day.

World growth

Economists from the World Trade Organisation (WTO) forecast the global trade of goods to pick up gradually this year, after it shrank in 2023. 

The high cost of energy, inflation and interest rates all contributed to last year’s fall, which slid 1.2 per cent in volume but fell 5 per cent in value, reflecting that it was higher-cost items people put off buying as a global cost of living crisis flared.

WTO director-general Ngozi Okonjo-Iweala said there is progress towards global trade recovery, with “resilient supply chains” and solid trade links between nations.

But. And there’s always a but.

The organisation predicts world trade should increase by 2.6 per cent in 2024 and 3.3 per cent in 2025.

The risks to that forecast are regional conflicts, geopolitical tensions and economic policy uncertainty.

And they’re all happening, right now.

‘Significant difficulties’

For people who make their living moving things in and out of our island nation, it’s quite a time.

“We’ve got significant difficulties now around the world,” says Paul Zalai, a director of the Freight Trade Alliance, which represents importers and freight forwarders, as well as the secretary of the Australian Peak Shippers Association representing major exporters.

The pandemic took out huge swathes of the workforce and impacted the cooperation of international governments.

Additionally, around 80 per cent of the goods transported by air comes to and leaves Australia in the belly of passenger aircraft. When they stopped, the trade largely did too.

But the current issues aren’t easy either, and include:

• Extreme weather in the Middle East that has drenched Dubai’s freight hubs
• Drought limiting the number of ships that can use the Panama Canal (a shortcut through Central America)
• Iran-backed Houthi rebels in Yemen firing missiles and drones at container ships in the Red Sea
• Conflict in Ukraine and the Middle East destabilising those regions and making trade harder

The impact is real.

To avoid the Houthi rebels vessels are travelling further, past the Cape of Good Hope. For Australian businesses, Mr Zalai says trade to and from the Mediterranean, the UK and Europe is taking an extra 10 to 14 days.

“That comes at extra costs: not just the transport costs that have increased, but even things like insurance,” he says.

In a recent report investment bank JP Morgan suggested the hostilities in the Red Sea could push core inflation, globally, about 0.3 percentage points higher.

Mr Zalai isn’t surprised.

More costs, slower movement

In stores, the reality is that things cost a little more and take a little longer to be available. 

“A lot of people think that they can just grab (an item) in like a week or something,” says Andrew Schwartz of Area 52

“Unfortunately, a lot of the time, there’s still going to be a little delay, but it’s a lot better than it was during COVID.”

Part of the delay is distributors switching from air freight to shipping. 

“So product that would be (released) ‘day and date’ with the rest of the world might be delayed a couple of weeks, because they’re sea-freighting things, they’re trying to keep costs down.”

Using air freight means some items like books have risen to a price — near $45 — where they’re difficult to sell.

“You’re seeing a lot of times they’ll either publish (comics and books) here and it’ll be delayed a little bit to get it published, because there’s not as much capacity,” Mr Schwartz says.

“Or you’re seeing it where it’ll first hit London and the US and then we’ll get it a couple of weeks later.”

Population growth

The problems of today obscure the work that is going on to secure the future.

Ships that can hold around 14,000 TEU (containers) are now floating around the world.

Called ‘New Panamax’ because they are formatted to fit through the Panama Canal, they are more than 366-metres long: greater than three soccer pitches or 15 tennis courts in length.

While populism, protectionism and piracy grab the headlines in world trade, what’s driving the bigger boats is a continually growing population of people who want things.

“There is a confidence that economic growth is going to be underpinned by population growth,” says Saul Cannon from the Port of Melbourne.

“Melbourne is forecast to be the largest city [in Australia] by population by 2030/31 and … that’s going to drive the economic activity.

Empty shelves

The empty shelves and long supply times evident during COVID will be well-remembered by local consumers.

But there’s something else, too.

“Everyone should feel proud of what we all did,” Mr Cannon adds, “to work together to ensure that Australia kept operating.

“We have to still do a lot more development and work. But I think we’ve come a long way and, and should feel confident about that future.”