Amidst escalating conflict in the Middle East, ADM Global are closely monitoring the situation as it continues to develop.
The impacts on Air Cargo and Containerised Trade have resulted in severe global disruption with further flow-on effects for Australian supply chains are anticipated.
Key developments include:
- Air Cargo: As the conflict ensued, global aviation services have been heavily impacted with closed airspace over the region disrupting major air corridors, grounding flights and delaying time critical cargo, ultimately tightening capacity as demand shifts adding extra pressure to complex and fragile supply chains. Major carriers have suspended services until safe operations can resume.
- Containerised Cargo: The Shipping Lines focus remains on safety of crew, vessels and cargo amid the ongoing developments with precautionary measures been taken to safeguard operations, resulting in disruptions. Shipping Lines are diverting vessels, suspending bookings on selected trades and re-routing services away from high-risk corridors.
- The Strait of Hormuz: This area is a strategic choke point and corridor for the global fuel supplies. With 20% of the global supply of fuels transiting through this area there will be onflow effects to costs, supply and demand.
- Emergency Conflict Surcharges and War Risk: The Shipping Lines have imposed Emergency Conflict Surcharges (ECS) for cargo to/from the affected areas. Further impositions by the Shipping Lines are not yet known and will be monitored closely.
- Emergency Fuel Surcharges: The Shipping Lines have announced Emergency Fuel Surcharges (EFS) on several trades to combat the ongoing fuel crisis; this will result in increasing supply chain costs.
- Impacts on Australia/New Zealand Landside: Influxes in Air Cargo has resulted in airport congestion and delays. Domestic surges in fuel prices will increase fuel surcharges as demand/shortages due to global supply disruption continues.
What Shippers Should Expect
- Service suspensions, booking cancellations and routing changes
- Increasing transportation, fuel and surcharge costs
- Tightening space and schedule instability
- Heavy delays and flow-on congestion at major transhipment hubs
The ultimate impacts to the global supply chain are not yet known with the situation developing in real time.
We encourage all customers to forward plan and book shipments as early as possible and to build flexibility into your supply chain, to help manage delays. Forecasting is a necessity to maintain a robust supply chain to navigate through these challenges.
For further assistance, please contact your dedicated support representative.
Yours sincerely,
ADM Global Pty Ltd
📞 +61 3 8336 0800 | 🌐 www.admglobal.com.au
