Unpacking Global Logistics: Latest News Impacting Australian Businesses (Freight, Customs, Trade) 

The global logistics industry has experienced a whirlwind of changes in the past six months, from trade agreements opening new doors to evolving regulations demanding adaptation. While challenges abound, opportunities lie ahead for those prepared to navigate them. In this article, we’ll explore the key developments that have shaped the industry in recent months. We will talk about their impact on businesses, and what you can expect in the year ahead.

We understand that keeping up with the latest industry news can be daunting, especially for businesses focused on their core operations. That’s why we’ve compiled this comprehensive overview, making complex topics easy to understand and providing actionable insights you can use to make informed decisions for your business. Our goal is to make this information super simple and easily understandable for everyone. In future articles, we will explore some of these topics more deeply, providing further insights into how they may affect your business.

Trade Agreements and Market Openings: The Australia-UK Free Trade Deal

shaking hands in front of australia and UK flags

In May 2023, Australia and the UK significantly reduced most tariffs on goods exchanged between them.

Key products like Australian beef, wine, and dairy, and UK automobiles, pharmaceuticals, and fashion items can now be traded more freely, enhancing accessibility and affordability. The A-UK FTA eliminates tariffs on over 99% of goods traded between the two countries.

This agreement has increased demand for freight forwarding services, as businesses seek to capitalise on new market opportunities

For consumers and businesses in both countries, this deal means greater access to a wider variety of products at more competitive prices.

Regulatory Changes and Biosecurity Measures

Biosecurity Area yellow sign

Import requirements have been updated, emphasising the need for phytosanitary certificates to ensure plant products are pest-free.

In response to the growing threat of the BMSB, a pest known for its potential to wreak havoc on local agriculture and biodiversity, authorities have put stringent measures in place. Mandatory treatment is now required for goods originating from over 30 countries. These countries include but not limited to Italy, the United States, Greece, and China. This list is subject to annual review and updates based on the pest’s spread and risk assessments. The treatments can include heat treatment, fumigation, or using insecticides under specific conditions before shipment.

These changes necessitate adjustments in shipping procedures and documentation, potentially affecting shipping times and costs. This might also affect the choice of shipping routes or methods as companies seek to comply with these requirements efficiently.

For businesses importing plant-based products or goods from countries identified as high risk for BMSB, compliance with these new regulations is critical. This involves ensuring that all plant-based products have valid phytosanitary certificates and that goods from affected countries undergo the required treatments before export. Non-compliance can lead to delays in customs clearance, additional inspections, or even rejection of the goods upon arrival, resulting in increased costs and operational disruptions.

Economic Adjustments: Biosecurity Costs

sign AUSTRALIAN BORDER FORCE on the black tshirt

In response to the increasing threat from hitchhiker pests, such as the Brown Marmorated Stink Bug (BMSB), snails, and various plant pathogens, authorities have implemented higher biosecurity charges. These pests can cause significant damage to agriculture, ecosystems, and economies if they enter and establish populations in new countries. The government has introduced the charges as part of a broader strategy to fund more rigorous inspection, treatment, and monitoring measures at borders.

Depending on the country and the specific biosecurity requirements, businesses might see an increase in sea import charges. They ranging from 2% to 5% of the total shipping cost. For a container with a base shipping cost of $4,000, this could mean additional biosecurity charges of $80 to $200 per container. These figures are illustrative and can vary based on the regulatory environment of the importing country, the type of goods, and the level of risk associated with the shipment.

The increased costs highlight the ongoing balance between trade facilitation and environmental protection.

Businesses may see a slight rise in shipping costs, which could be passed on to consumers. This is particularly relevant for companies dealing in agricultural products, used vehicles, machinery, and other goods that are more susceptible to hitchhiker pests.

Cybersecurity Incidents

A significant cybersecurity breach at DP World, a major global port operator,  highlighted the vulnerabilities in logistics infrastructure. Hackers infiltrated DP World’s Australian network, forcing them to disconnect from the internet to contain the breach. This meant ports shut down, landside operations stalled, and some data was stolen. While no ransom was demanded, it was a wake-up call for the entire logistics industry.

The DP World cybersecurity incident really shook up the logistics world. It caused big delays at their terminals, making freight forwarders and customs brokers miss deadlines and deal with unhappy clients. On top of that, everyone in the logistics chain is now under a microscope for data security, possibly facing tougher rules and more hoops to jump through. It also made clients wary about security, pushing some to look for safer options. Plus, it spotlighted how vulnerable the supply chain is to cyber threats, adding more uncertainty and making it tougher for businesses to stay smooth and profitable.

Ensuring that your logistics partners prioritise cybersecurity can protect your supply chain from similar threats.

Environmental and Legal Compliance: Illegal Logging Regulations

downed trees and tracked machinery

Australia has tightened its regulations against illegal logging, requiring more detailed importer declarations.

This move aligns with global trends towards sustainable and legally compliant trade practices.

Businesses dealing in timber and timber products must be diligent in sourcing and documentation to comply with these regulations.

Labor Disputes and Resolutions: DP World Industrial Actions

a man in the crowd with a sigh MUA

DP World’s Australian terminals faced strikes, it was all about dock workers wanting fair pay and better job conditions. After a bit of a standoff, DP World and the workers’ union, the Maritime Union of Australia (MUA), agreed on a deal lasting four years. This agreement ended the strikes, bringing a sigh of relief to many businesses.

For the Workers: They got a promise of a 23.5% pay increase spread over four years, plus some perks to make their work-life balance a bit sweeter.

For DP World: They gained the flexibility they wanted in organising work schedules, which could help them work more efficiently.

The strikes at DP World’s terminals were more than just a local issue. They caused big delays in shipping, which means businesses waiting on goods to sell or use were left hanging. The whole ordeal cost the Australian economy millions every week and made everyone from freight forwarders to small business owners very nervous about getting their goods on time.

If your business relies on shipping goods, this story is a heads-up. Firstly, things should be getting back to normal at DP World, making shipping schedules more reliable again. However, the cost of smoothing things over might lead to slightly higher shipping fees down the line. Also, it’s a reminder of how important it is to have a backup plan. Strikes, weather, or other surprises can mess with your supply chain, so it’s smart to stay informed and be ready to adjust when things get shaky.

Red Sea on Rough Waters: Navigating Through Logistics Challenges

cargo ship loaded with containers

Increased Attacks: Houthi rebels in Yemen intensified their maritime aggression, launching over 25 attacks. They were on ships headed mainly towards Israeli ports since November 2023, a sharp spike from previous years.

Route Diversions: For safety, many ships have steered clear of the Red Sea, opting instead for the longer journey around Africa’s southern tip. This means more time and money spent on the same shipments.

Specific Impact: LNG carriers have completely avoided the Red Sea route, and the number of container ships has plummeted by 67% from the year before.

Costly Detours: Ships taking the long way round face much higher fuel expenses. Which can lead to increased prices for all sorts of products, from tech gadgets to household items.

Supply Chain Delays: These disruptions mean longer waits for businesses and consumers expecting deliveries, affecting a wide range of goods.

Insurance Blues: The danger of sailing through the Red Sea has bumped up insurance costs for these routes, adding another layer of expense.

The situation in the Red Sea, marked by Houthi rebel attacks, directly affects businesses relying on logistics services. It cause increasing shipping costs due to longer detours and higher insurance premiums, causing delays, and limiting route options. Indirectly, it leads to price hikes, inventory challenges, and potential reputational damage, urging businesses to adapt through diversification and enhanced communication strategies.

As we look ahead to 2024, the logistics industry is going to change and transform. Embracing technology, prioritising sustainability, and fostering strong partnerships will be crucial for businesses to thrive in this dynamic environment.

At GenFreight Global Logistics, we are committed to being your trusted and reliable partner in navigating these changes. With our extensive experience, global network, and dedication to innovation, we can help you overcome challenges, optimise your supply chain, and achieve your business goals.