Omicron is playing havoc with some of Australia’s largest freight logistics providers which have been forced to introduce levies to cover the rising cost of pandemic-related staff shortages. Source: Sydney Morning Herald
ASX-listed logistics giant Qube started charging its customers a levy of $28.50 per container this week citing the rising labour costs.
In a letter to its customers, Qube said its operations were being severely affected by the recent Omicron outbreak due to pandemic-related absenteeism.
“This impact is driving significant additional costs into our business as we attempt to provide ongoing services. Absenteeism within the national logistics industry continues to put undue pressure on all elements of the supply chain,” the company said.
The need for the levy will be reviewed as markets return to normal when COVID eases, hopefully in the months ahead,” a company spokesman told the Sydney Morning Herald
And The Age.
Qube, which has operations in every state, handles about 750,000 car imports a year as well as grain exports, timber imports and helps handle logistics for retailers like Woolworths which is unaffected by the levy.
It also handles iron ore exports from Western Australia, which remains unaffected by the levy due to the pandemic’s low impact there.
RBC Capital analyst Owen Birrell said similar short-term COVID levies of about $25 per container “are being imposed (or expected to be introduced) by rival logistics companies to cover the costs of processing and to recruit temporary labour”.
Australia’s largest privately owned logistics operator, ACFS, confirmed that it had introduced a surcharge of $25 per container last Monday for the same reason.
“Costs have gone through the roof,” company chief executive Arthur Tzaneros said. “The surcharge won’t even cover our costs.”
The company has considered reducing shifts due to the staff shortages which have to be covered by workers doing overtime, or bringing in external contractors. It also covers pay for those forced off work due to COVID.
Mr Tzaneros said Omicron had left the company between 200 and 300 workers short of the 1200 needed to sustain its operations.
“We’ve got somewhere between 50 and a 100 staff off with COVID impacts on a per state basis, so it’s a rather large impact,” he said.
The Port of Melbourne’s Victoria International Container Terminal has also introduced a temporary levy, as has ASX-listed Silk Logistics in Melbourne only.
“The levy will be utilised to fund additional payments to maintain contractor numbers and agency staff during a period where significant absenteeism is occurring and to assist in retaining drivers from leaving the industry for higher paying roles to ensure Silk can keep servicing clients,” the company said.
“This levy will be reviewed as Silk gets through the next 6-8 weeks in terms of its long-term appropriateness. It may well reduce or be removed.”
Toll Holdings has not introduced a levy at this stage.
In recent weeks retailers and supermarkets have experienced a shortage of goods as they battle to maintain adequate staffing amid the latest COVID wave.