MHD SUPPLY CHAIN
STRONG FOUNDATIONS FOR REVOVERY Following a survey conducted by MHD’s publisher, we reveal the latest stats from businesses in the sector as we move into a new normal following the peak of COVID-19 challenges.
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t a time when the world has been shocked by a pandemic and resilience has never been more critical, Australia has been found to possess a strong foundation for a robust post-pandemic business recovery. That’s why MHD’s publisher Prime Creative Media recently undertook an industry survey, to help companies understand where the transport, logistics and supply chain industries are placed. Supply chain and logistics were the earliest industries impacted by COVID-19, with many factories in China shutting down for a prolonged period over the Chinese New Year. But now the interruption to component supply has been superseded by concerns over consumer and business demand in the Western markets for the foreseeable future. Simon Birmingham, Federal Trade Minister said at the end of April this year that one in five Australian jobs relies in some way on trade, for example in agriculture, manufacturing, tourism, education and financial services. “China is our largest trading partner and has helped Australia to record 26 consecutive monthly trade surpluses, meaning we’re exporting more than we’ve imported,” he said. Australia recorded a mega $19.2 billion trade surplus for the March quarter along with its highest ever current account surplus, highlighting how important our supply chains will continue to be as the Australian and global economy begins to recover from the impacts of COVID-19.
HOW WAS THE SECTOR IMPACTED? A wide variety of people across executive, mid-level manager, finance, sales and marketing, procurement and operations participated in MHD’s industry survey, reflecting where 50 | MHD JULY 2020
the logistics sector is placed as the national and global economy begins to emerge from this once-in-a generation challenging time. Australia is a nation of major global operations and small businesses, that are mixed across both metro and regional locations. Twnty five per cent of survey respondents have 11-50 employees in their company, whilst the other equal majority of respondents have over 500 employees. This can be attributed to Australia’s location in the oceanic region and wide open space that can facilitate large logistic hubs spread across multiple points of the country. During the pandemic, it was shown that one of the major disadvantages of stretched supply chains is that they can easily break at any point. You never know when a link in the supply chain fails due to uncontrollable factors, and your entire business is affected by it. Companies have had to invest their resources into shortening but also speeding up the supply chain and making sure that the required goods are transported from one end to the other in the shortest period of time. In the midst of the COVID-19 pandemic, logistics and freight workers ramped up their duties, going to work each day fulfilling a
critical role, allowing consumers to access essentials. However, companies in the sector have been forced to put control measures in place, limiting physical interactions between workers, suppliers, customers and others.
WHAT CHALLENGES ARE BUSINESSES FACING? Almost 50 per cent of industry respondents said the current effect of COVID-19 on their business is somewhat negative. Business has come under a variety of threats as a result of the COVID-19 pandemic including the closure of borders, increased screening and security measures and the greater frequency of cyber security attacks. However, all Australian states and territories consider freight and logistics to be essential services, exempting them from the interstate travel bans and quarantine requirements. This is most likely the contributing factor to over a quarter of respondents reporting that not a lot of impact is on their business at this time. Not many industries have had the luxury to see their business boom during this unprecedented time, but almost 20 per cent of people said they have seen an increase in business since
