The world is running out of … everything!
- The cost of importing goods to Australia has soared 450% since this time last year, one report suggests.
- A dearth of ammunition, bikes, computers, cars, diesel fluid, gaming consoles, instruments, and semiconductors.
- The Freightos Baltic Index says the global spot rates for 40-foot containers are still more than double the price a year earlier.
What do chickens, semiconductors, construction materials, diesel exhaust fluid, and medicines all have in common?
They are all in short supply.
Then there is a lack of coffee, instruments, ammunition, and even bikes. It seems we are running low on some unexpected items, not to mention rapid antigen tests (RATs).
Add the well-documented shortage of critical minerals on the horizon which threatens to jeopardise the transition to net zero emissions, and the world really is running out of everything.
Reports show that overall, the number of medicine shortages in Australia in particular reportedly rose by 300% between 2019 and 2020. As COVID-19 continues to decimate regions and healthcare systems it’s likely to get worse before it gets better.
In terms of shortages, gaming consoles, computers and cars are some of the most affected items because they require an essential component – the computer chip, also known as a semiconductor, of which there is a dearth globally.
As a result, Toyota announced recently that it would slash its global production of cars by 40% because like most automakers, it cannot get the materials needed including semiconductors, metal parts, plastics, and raw materials.
As previously reported by Grafa, fast food company KFC recently announced that a chicken shortage at some of its restaurants, thanks to COVID-19, meanit it was downsizing menus at many franchises. Coles supermarket, in turn, also limited how many chickens customers could buy.
There is also a major shortage of a key ingredient used in diesel exhaust fluid, known as AdBlue, which is forcing truckies off the road. Globally, there is a major shortage of urea, a crucial ingredient in AdBlue, which helps to reduce carbon dioxide emissions – a mandatory requirement of many diesel vehicles, including commercial and private vehicles, as reported by Grafa.
The Australian Competition and Consumer Commission (ACCC) is monitoring the issue amid reports of price gouging where the retail price has tripled as a result.
According to the Freightos Baltic Index, the global spot rates for 40-foot containers have declined from their peak in September 2021 but today are still running at more than US$9,600, which is more than double the price of a year earlier.
One report suggested that the cost of importing goods to Australia had soared 450% since this time last year. Australia’s import prices rose by 5.4% QoQ in Q3 2021, accelerating sharply from 1.9% in Q2. It was the third straight quarter of growth in import prices and the steepest pace since Q3 2013, amid a faster recovery in the economy from the COVID-19 and soaring energy prices, according to Trading Economics.
In essence the reasons for the crisis are complex and varied. Supply chain disruptions, soaring shipping costs, a lack of workers to fulfill orders due to isolation measures from COVID-19, and increased demand for certain items amid lockdown, are some of the major factors at play creating the issue.
Most experts suggest that the shortage is transitory but the next time you duck out to the supermarket, don’t expect to be able to buy everything on your list for a while longer yet.
Just today (January 25) freight services into WA from the Eastern States were halted after floods damaged parts of the rail line between Adelaide and Perth.
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