Global Trade - What it Means to be Australian...?
With a peculiar accent supposedly based on the English language, instantly recognisable around the world, we endure the rigors of global trade oblivious to some of the unique conditions we all face as Australians on the world stage.
Tyranny of Distance:
Our major trading partners are located anywhere from 8,000km–17,000km from us; this requires that our goods spend between 20 & 55 days on the water. If we don’t get our demand planning right we face losing salesor, worse still, paying some of the highest airfreight rates in the world to ensure their timely arrival.
The majority of the world’s fleet has no interest in sailing to such a small market, so lots of our goods end up being unloaded at transhipment ports to be loaded onto other vessels that are bound for Australia. During peak times our goods can sit for 5 – 10 days waiting for a vessel with space available to carry them. If we choose this option we must understand this as a reality but, for some, no direct sailings exist so this too must be factored into our demand planning.
“During peak times our goods can sit for 5 – 10 days waiting for a vessel with space available to carry them”.
Apart from being some of the most expensive in the world we also need to understand that many of the flights that land here do so indirectly via transit airports in the UAE or Asia. This can lead to goods being off-loaded to make way for other cargo. Connecting flights are also a reality that needs to be understood as direct flights, again, often don’t exist, so not making the cut-off for a connecting flight to Australia, again adds days to the journey.
A well-worn path, speculative or otherwise, currency trading and fluctuations in the Australian Dollar (AUD) are just another headache to contend with. So you have your demand planning right and you have avoided all the pitfalls above only to be told by your accountant that you have to increase prices because of a fall in the AUD.
Availability Delays/Back Orders:
So you thought it was all about YOU!!! Australia accounts for only 1.14% of the world’s exports and 1.25% of the world’s imports. So for those massive factories in China that we all talk about, our orders are just a small fraction of their output; so small in fact that they are often given lower priority – hence the all-too-often delay in availability, the dreaded “back order” or incomplete fulfillment. Should I mention demand planning again…?
“Australia accounts for only 1.14% of the world’s exports and 1.25% of the world’s imports”.
Australians are required to endure more than most; fighting for supply, fighting to get goods here on time; on budget. Not only do we need to remain flexible in our approach but we need to understand the physical dynamics of global trade and what it takes to get our goods to market.
Chief executive Officer