Pressures mount on grocery supply chain to supermarkets

Woolworths has been one of the major players impacted by supply issues. Picture: Shutterstock
Woolworths has been one of the major players impacted by supply issues. Picture: Shutterstock

Changes to the rules for COVID close contacts by the NSW and Queensland governments have eased the pressure on the supply chain logistics of groceries and fuel into Canberra, but customers have been warned to expect shortages "from time to time".

All the food and groceries delivered into Canberra are sourced from distribution centres in western Sydney or regional depots.

Woolworths said meat and poultry were two of the most affected grocery items, while Coles has introduced pack limits per customer on items such chicken breasts, chicken thighs, mince and sausages. Woolworths had not yet introduced shopper limits but a spokesperson said the company was monitoring the situation closely.

One of the major transport operators into the ACT, Wodonga-based Ron Finemore's Transport, said it had been fortunate only a small proportion of its staff had been affected so far as the highly contagious effect of the Omicron COVID variant spiralled through the population.

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But the company's tightly-controlled logistics were experiencing "pressure points", with drivers waiting to load up at distribution centres where staffing levels there were down.

The NSW government at the weekend allowed workers in the agriculture, food logistics, transport and manufacturing sectors who had been furloughed as close contacts to leave isolation if their employer determined their absence posed "a high risk of disruption to the delivery of critical services or activities".

Mark Parry, the chief executive for Ron Finemore's Transport, said he currently had about 40 people within his 850 staff stood down and self-isolating through being close contacts. The company keeps its own in-house stock of rapid antigen test (RAT) kits for its drivers.

He said the new government rules were helpful but his priority remained the safety and protection of his workforce and decisions would be made on that basis.

He said that looking after his workforce was a business priority "because our drivers are a critical part of our business".

One of the Finemore's Transport fleet. Picture: Finemore's

One of the Finemore's Transport fleet. Picture: Finemore's

Finemore's operates one of the biggest line-haul fleets on the east coast of the country, and has major delivery contracts with grocery and fuel companies Woolworths, Aldi and Ampol.

"At a macro level, this will be managed well; people will at times see some stock shortages. This challenge is not just ours alone," he said.

But he acknowledged the arrival of the Omicron COVID variant had been an added complication.

"In a perfect world, you get an order, you allocate your equipment, you allocate your driver and you do what you do each and every day and we do it very well," he said.

"When you've got issues with distribution centres being delayed in loading because they've got COVID-related [staff] shortages or drivers can't come in because they are ill or family members are ill or tested positive, that creates a planning issue.

"If stuff is loaded late, that holds drivers up, so by the end of the week if you've lost 10 hours [per driver], by the end of the week you've lost 400 hours of driving time. And then if people panic buy, then more stuff has to be delivered so you get a compounding effect."

Like most large trans-state line-haul freight operators delivering items with a limited shelf-life, Finemore's imposes black-out periods for holidays at peak demand periods such as Christmas and Easter.

"But some of those drivers are taking their [holidays] entitlements now and that is another complication," Mr Parry said.

"At a macro level, this will be managed well; people will at times see some stock shortages.

"I think [Woolworths chief executive] Brad Banducci came out the other day and said, 'Stock will be on shelves. It might not be the normal stock so you [the customer] might have to be a little bit flexible'."

The executive director of the Australian Chicken Meat Federation, Dr Vivien Kite, said transport was a key issue in getting poultry into supermarkets.

"There are plenty of chickens out on farms, but just not enough people to pick them up, process them and distribute chicken products to stores," she said.

"Staff shortages in the transport area have become a particular issue over the past few days, with insufficient drivers available to distribute products to stores. Unfortunately, a point is reached where a chicken supplier has no option but to cut back or cancel orders."

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This story Knock-on effects through supply chain despite eased COVID rules for workers first appeared on The Canberra Times.