Port delays exacerbate machinery supply chain woes

Demand for agricultural machinery remains strong worldwide in spite of supply chain and port challenges.

Shift in shipping: Wallenius Wilhelmsen Oceania logistics services senior vice president Kim Buoy says there is an increasing trend of items that have traditionally been shipped in containers being sent as roll-on, roll-off cargo.

Delays at Australian ports are the latest challenge to hit the machinery supply chain, according to the Tractor and Machinery Association of Australia.

While 12- to 18-month wait times for new machinery were expected, TMA executive director Gary Northover said reports were now emerging of severe backlogs unloading ships.

"Members are citing issues such as overly lengthy delays in quarantine due to a lack of suitably trained staff to process agricultural equipment and overly expensive container costs, sometimes three to four times greater than normal," Mr Northover said.

"This, along with a shortage of containers, is leading some suppliers to resort to roll-on, roll-off for products that would ordinarily be containerised."

Wallenius Wilhelmsen Oceania logistics services senior vice president Kim Buoy said vessel delays in loading and discharging were increasingly becoming a challenge at Port Kembla, Brisbane, Melbourne and Fremantle.

Mr Buoy said the length of these delays had varied from one to two days, and up to a week in some cases, for the global shipping line.

"The recent weather issues in Queensland and NSW have resulted in reduced capacity in Brisbane and Port Kembla," he said.

"Vessels have omitted Brisbane and Port Kembla to trans-ship their cargoes in Melbourne."

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Freight and Trade Alliance head of border and biosecurity Sal Milici was one of the presenters at last month's Australian Bureau of Agricultural and Resource Economics and Sciences Outlook virtual conference.

In a session on biosecurity, Mr Milici said "shipping was dysfunctional at the moment" and the whole industry was really struggling.

He said high costs and logistical problems were making it difficult to get goods into containers and onto ships.

"Similarly there's challenges when navigating the border through some of the challenges the Department of Agriculture has had," Mr Milici said.

Mr Buoy expects delays will continue for the remainder of 2022 and into 2023.

Mr Buoy said the terminal operators had a limited ability to forecast the number of units held in quarantine by DAWE, which was causing cargo congestion.

However, Mr Buoy said his organisation did not believe this was a key issue.

"While agricultural machinery is also inspected and held by quarantine/DAWE, the main issue is the shear number of passenger vehicles, which is also the majority of the cargoes at the terminals," he said.

"Often port rotation for the shipping carriers are changed on short notice to try to avoid delays - although this is causing delays at the terminals due to the influx of cargoes."

A spokesperson for the Department of Agriculture, Water and the Environment said the department was aware of delays for some importers at the Australian border.

"These are due to a combination of high volumes of incoming cargo, our borders reopening to passengers and cruise vessels, changing biosecurity risk profiles, as well as the ongoing impacts of COVID-19, both across the department's workforce and at third party premises," the spokesperson said.

Mr Northover said compounding this were reports shipping companies were not allocating as many ships to Australia as it was proving too costly and unproductive for them to do so.

However, Mr Buoy said the shipping lines would always try to balance the supply of ships with the demand for cargo.

"It is my assessment that overall shipping capacity into Australia will remain the same, but frequency of certain shipping options, and cost for these might be impacted," he said.

Mr Buoy expected delays would continue for the remainder of 2022 and into 2023.

March machinery sales snapshot

Australian tractor sales dropped in March with global supply issues taking its toll.

Sales across the nation were down 19 per cent on March 2021 figures and are now 13pc behind for the year-to-date.

Mr Northover said overall this was still a strong level of sales for the industry.

NSW tractor sales were down 21pc for the month and are sitting 10pc behind last year.

Queensland was down 11pc and 5pc, respectively. Victoria is 12pc behind March 2021 and down 10.4pc for the year-to-date.

There was a sizable drop in sales in Western Australia, down 35pc for the month and 34pc for the year-to-date, while South Australia dropped 32pc.

Tasmanian sales were down 17pc and sales in the Northern Territory were steady.

It is my assessment that overall shipping capacity into Australia will remain the same, but frequency of certain shipping options, and cost for these might be impacted.
Kim Buoy

Sales in the under 30 kilowatt (40 horsepower) category were down 18pc to be 9pc behind for the year-to-date.

The 30 to 75kw (40 to 100hp) range fell for the first time in some months, down 6pc for the month but remains 1pc ahead for the year-to-date.

Sales in the 75 to 150kw (100 to 200hp) category were down 21pc, while sales in the 150kw plus (200hp) range were down 39pc for the month and 39pc for the year-to-date.

There was a 36pc lift in baler sales compared to March 2021 while sales of out-front mowers were down 6pc.

Mr Northover said in spite of these challenges, and some price rises occurring, demand for agricultural machinery remains strong worldwide.

John Deere, Case IH and Ports Australia were contacted for comment.

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