Rapid rising costs of food, fuel and transport are not going to change soon according to an RMIT professor, as long as supply chain disruptions continue.
Professor Vinh Thai, who teaches at the RMIT School of Accounting, Info Systems and Supply Chain, said reduced sailings, shortage of empty containers and port congestions have significantly added costs to the supply chain, indirectly increasing costs of food and other commodities.
These inflationary woes, especially impacting essential items, won’t improve any time soon given the uncertainties that persist across global supply chain networks.
“This is not expected to improve any time soon, given the uncertainty of the ongoing war in Ukraine, skills shortage, congestion in some world’s major ports, and unpredictable geopolitical events such as the conflict between China and Taiwan,” said Vinh.
“Businesses need to build up and enhance their supply chain resilience capability to ensure the costs of transporting essential items aren’t being passed onto Australians. Their supply chains should be able to efficiently predict, respond and recover from disruptions,” he said.
Promoting best practices, investment promotion and buyer-seller matching events for supply chain diversification through the Supply Chain Resilience Initiative with Japan and India was a step in the right direction but more needed to be done according to Vinh who supported the development of a national supply chain resilience strategy.
“The government can further support this by introducing policies which support the development of the national supply chain capability through building key infrastructure including digital in logistics, especially maritime logistics, given the maritime dependency of Australian trade,” he said.
“On a global scale, governments need to be working together to provide incentives for cross-border supply chain collaboration, especially in the South East Asia region and take a more proactive role in logistics and supply chain manpower development.”
Professor Vinh is the founder of the Australian Maritime Logistics Research Network (AMLRN), connecting maritime academics and industry professionals in Australia and overseas.