WA economy, supply chains hit by industrial dispute at Fremantle Port

Ongoing industrial turmoil at Fremantle Port is costing Western Australia’s economy more than $10 million a week and threatening the stability of the state’s supply chains, CCIWA has warned.

The dispute between global stevedoring giant DP World and the Maritime Union of Australia (MUA) has caused significant disruption at Fremantle Port, with rolling two-hour stoppages and a ban on overtime in place since November.

Similar industrial action is underway at ports in Melbourne, Brisbane and Sydney.

Modelling commissioned by DP World shows the industrial action at Fremantle Port is costing the WA economy $10.7 million per week in direct and indirect impacts.

These include the cost of delays, the potential loss of fresh produce destined for export markets (including meat and fish), and flow-on impacts to other industries.

DP World estimates it will take eight weeks to clear the backlog of around 6,000 containers currently sitting at Fremantle Port.

The company is responsible for around 40% of stevedoring activity at Fremantle Port.

CCIWA Chief Economist Aaron Morey said the disruption was a blow to WA’s economy which relies heavily on international trade.

“99% of international trade happens through Australia’s ports so any impact on port operations will have an impact across the economy, particularly for our farmers who rely on fresh produce being handled efficiently” he said.

“WA is also at the end of incoming global supply chains, so it poses a real risk for industries that rely on imports for the crucial components required to run their business, like vehicles, machinery parts, appliances, pharmaceuticals and fertilizers.”

CCIWA is calling on the Federal and State Governments to make an application to the Fair Work Commission to intervene, on the grounds that the dispute is damaging the Australian economy.

Mr Morey said the escalating conflict in the Middle East was also causing disruption to global shipping operations, with freight forced to divert away from the Red Sea and Suez Canal shipping channels.

“Both of these challenges happening at the same time could cause a perfect storm for WA businesses who rely on shipping freight,” he said.

“As well as causing delays and disruption, there’s also the risk that prices will be driven up by the extra costs associated with getting goods into WA.

“This is the last thing WA consumers and businesses need.”

WA businesses faced significant challenges when supply chains were disrupted at the outbreak of the COVID-19 pandemic.

CCIWA’s December Business Confidence report found 63% of wholesale trade businesses in WA still identified supply chain issues as a major barrier to growth.

“We saw during the pandemic how fragile our supply chains are in WA and many of those supply chains are still recovering from the disruptions that started four years ago,” Mr Morey said.

“Fremantle Port services the most isolated capital city in the world, so its importance to our state can’t be overstated.”

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