The global logistics landscape has never been more complex. In recent years, trade tensions and tariffs, particularly those imposed by the United States, have caused ripple effects across international shipping networks. For Australian businesses, which rely heavily on both air and sea freight to move goods in and out of the country, these changes have had significant operational and financial implications. 

Zoran Ilic from ISS Shipping explains, “A lot of companies have been affected. Customers are delaying shipments and not importing products that are used to produce their product so they can re-export it.” His insight reflects the challenges ISS Shipping helps businesses navigate while maintaining smooth supply chains amid geopolitical uncertainty. 

The Effect on Freight and Supply Chains

Tariffs have disrupted traditional trade flows. Some Australian companies have delayed or cancelled shipments to manage costs. Products that were previously imported from China are now being sourced from countries such as Vietnam, Malaysia, Bangladesh, and the Philippines. “Factories have popped up in other regions like Vietnam and Malaysia and the Philippines and other Southeast Asian countries,” Zoran notes. This shift is not merely about cost savings. It is also a strategy to build resilience and reduce dependency on any single manufacturing hub.

Shipping lines and airlines have also been impacted by mergers, which has affected the allocation of cargo space. Zoran points out, “We found that there has been some issues with being able to load our containers on vessels or load our air cargo into aeroplanes.” For Australian importers and exporters, these challenges highlight the importance of planning ahead and collaborating closely with logistics partners to secure space, particularly during peak seasons.

The Importance of Flexibility

In a volatile market, flexibility has become a critical business strategy. Supply chains that can adapt quickly to changes in tariffs, port congestion, or delayed shipments are better positioned to meet deadlines and maintain service levels. Zoran emphasises the value of foresight and contingency planning. He says, “Planning shipments well in advance and building in contingencies is more vital than ever.”

Companies are increasingly adopting a dual approach to freight, combining air and sea transport to balance cost with speed. With sea freight experiencing longer transit times due to port congestion and rerouted vessels, air freight has become a necessary alternative for businesses needing to meet tight deadlines. “With sea freight taking longer, customers have needed to hit deadlines, so they’ve looked at air freight options,” Zoran explains.

Exploring Emerging Markets

The trade war has inadvertently opened opportunities in new manufacturing regions. Countries like Bangladesh, Vietnam, and Sri Lanka are emerging as viable alternatives to traditional Chinese suppliers. Zoran reflects on this trend. “We’ve seen a growth in imports from places like Bangladesh and Vietnam, where a year or so ago the majority of our cargo was coming in from China.” Australian businesses that explore these markets can benefit not only from potentially lower costs but also from a more resilient, diversified supply chain.

Technology and Future Readiness

Beyond tariffs and geopolitical issues, technology is becoming an increasingly vital tool in managing complexity. Zoran highlights that embracing digital tools and AI can streamline operations and enhance reliability. “We try to keep up with technology. We are looking at AI for smoother transitions in our data flow and operational processes.” Automating shipment tracking, documentation, and communications allows businesses to respond more quickly to disruptions, improve efficiency, and reduce the risk of costly delays.

Key Takeaways for Australian Businesses

• Plan ahead: Early planning and booking are essential to secure cargo space, especially during peak periods.
• Diversify suppliers: Consider emerging manufacturing hubs to reduce dependence on traditional sources.
• Adopt a dual freight strategy: Use a mix of air and sea freight to balance cost and speed.
• Invest in technology: AI and digital tools help streamline operations and improve supply chain resilience.
• Build flexibility into your supply chain: Contingency planning can mitigate risks caused by tariffs, port delays, and other unforeseen disruptions.

In today’s volatile logistics environment, businesses that embrace flexibility, explore alternative sourcing strategies, and leverage technology will be best placed to thrive. As Zoran concludes, “Everything is busy, busy, busy. If you need your shipments to move as soon as possible, get on top of it. Plan, plan, plan.” Following this advice will ensure businesses not only survive the current challenges but also position themselves for long-term success in an ever-changing global market.