Reduce delays in supply chain by sourcing metal fabricated components and product from Wilson & Gilkes in Australia

4 major issues that will continue to impact supply chains

Two of the most common ut­ter­ances from the past two and a half years would have to be “supply delays” and “un­prece­dent­ed.”

“Supply chain managers need to think carefully about op­por­tu­ni­ties and risk when looking for new sources while con­sid­er­ing how to co­or­di­nate the change from one source or mode to another,” said Joachim Arts, a CTL research affiliate and associate professor at the Lux­em­bourg Center for Logistics and Supply Chain Man­age­ment.

Recent feedback from Toyota in Australia says its current waiting times are ranging from six months to two years for popular models.

Global issues that continue to impact supply chains serve to highlight the value of Aus­tralian man­u­fac­tur­ing.

Wilson & Gilkes has been working with several companies in Australia to create supply certainty of sheet metal fab­ri­cat­ed products and com­po­nents.

Here are four of the major issues that will continue to impact supply chains:

• Covid Lockdowns in China

China’s Covid Zero policy to be main­tained until at least 2023.

Lockdowns and other mit­i­ga­tion measures have in­ten­si­fied, including in Chengdu, the country’s sixth-largest city with 21 million people, and parts of Guiyang, home to China’s biggest res­i­den­tial compound where some 400,000 people live in 300 buildings. Meanwhile, Beijing is tight­en­ing travel re­stric­tions for anyone entering or leaving the capital. 

China’s National Health Com­mis­sion recently announced a raft of measures that will be in place until the end of next month to fight a virus that shows little sign of slowing. Au­thor­i­ties told citizens to minimise travel during the mid-autumn festival next week and National Day holidays in October – or­di­nar­i­ly key periods for domestic tourism – and asked local gov­ern­ments to test all residents regularly for Covid re­gard­less of infection levels.

• Ukraine Conflict  

The Russia-Ukraine war is having an outsized impact on the global supply chain, impeding the flow of goods, fuelling dramatic cost increases and product shortages, and creating cat­a­stroph­ic food shortages around the world, according to Transport and Logistics experts.

• Increased Cost of Sea Freight  

Shipping prices are currently more than four times higher than they were before the start of the pandemic. 

A 40ft container now costs just under $8000, with prices expected to increase in coming weeks to about $10,000.

In contrast, rates were below $2000 at the start of 2020.

There is a strong pos­si­bil­i­ty that these higher rates will become permanent.

• Re­li­a­bil­i­ty of Shipping Arrival Dates

There has never been a time when sea freight carriers have been more un­re­li­able.

Re­li­a­bil­i­ty is measured by the actual arrival date of vessels against the ad­ver­tised arrival date. In January 2022, re­li­a­bil­i­ty dropped to a low of 30% and rose only slightly to 35% the following month. 

In contrast, carriers were recording 70%-80% re­li­a­bil­i­ty in pre-Covid 2019, with less than five days of delays.

Using Aus­tralian suppliers will reduce supply risks.

Wilson & Gilkes designs and man­u­fac­tures 100% in Australia. No supply chain risk. Contact us on (+61) 2 9914 0900 or sales@gilkon.com.au