Attacks, disputes hold up freight

The owners of Fantastic Furniture and Freedom, one of the nation’s largest stables of furniture stores, has warned that industrial action at Australia’s ports and terrorism activity along the vital Red Sea channel is constraining furniture supplies, causing shortages and ratcheting freight costs.

Furniture chain owner Greenlit Brands has reported lower-than-expected sales through December and January, with cost-of-living pressures and a tighter economy pushing many consumers to search for value and promotions when making a purchasing decision.

Meanwhile, Greenlit has become one of the first major retailers to admit to disruptions caused by the twin challenges of industrial actions by unions and terrorist attacks across the vital Red Sea supply route, raising the prospect of other retailers facing similar shortages as well as cost blowouts that ultimately could be passed on to consumers to feed into inflationary pressures.

“Compared to prior years, the business has not faced the same level of supply chain disruption, however ongoing Australian port disruptions (DP World) are causing delays and some shortages in stock availability,” said a spokesman for Greenlit Brands, the owner of Fantastic Furniture and Freedom.

“Ocean freight rates are also seeing some increases due to the Red Sea conflict.”

As many as 50,000 containers are reported to have been stranded thanks to the industrial strike and the nation’s second biggest port container operator DP World has estimated the delays cost the Australian economy $84m per day since the industrial brawl began in October. On Friday, that industrial dispute was settled when the Maritime Union of Australia reached an agreement with DP World.

Meanwhile, terrorist attacks in the Red Sea linked to the war in the Middle East has forced many shipping lines to seek alternate routes, sailing around the Cape of Good Hope in southern Africa to add at least 10 days and over 15 per cent to shipping costs.