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Port problems raise stock fears

Port problems raise stock fears

The channel is keeping a watchful eye on the state of play at Australia's major ports, following reports of a computer crisis.

The Australian Customs Service (ACS) rolled out its new Integrated Cargo Systems (ICS) on October 12. The e-government import system was designed to replace a 20-year old EDI system, Custom Connect, as part of a major overhaul of Australia's cargo management processes. It was developed by two consortiums, led by Computer Associates and IBM. A number of other subcontracted firms such as Kaz Computing, contributed. The system is valued at about $250 million.

According to a recent statement from the ACS, the much anticipated final cutover to ICS two weeks ago, after 18 months of setbacks, has been plagued by a series of technical and business issues. These have resulted in delays unloading and clearing goods from Australia's major sea ports.

Widespread reports in the general press have also claimed a build up of containers at some of Australia's busiest ports, including Port Botany in Sydney and the Port of Melbourne.

While vendors and distributors were aware of the backlog, most who spoke to ARN said they had not been adversely affected by the delays so far. However, many were bracing themselves for potential problems.

Acer marketing director, Raymond Vardenega, said some of its air-freighted products had been held up but the vendor was acting quickly to mitigate the risks.

"We are putting in contingency plans for customers and other supply sources where possible," he said. "Anything like this we have to look at seriously."

Vardenega said notebooks and LCD panels were most likely to be affected by the delays in the short term.

"The next 2-3 weeks will be the most telling," he said. "After that, it will begin to bite for both Acer and the wider industry."

Kyocera Mita logistics manager, John Fraser, said some items were taking 1-2 days longer to process than first thought.

"Air freight is not too bad, and we got in a big shipment this week with sea freight, so we are happy," he said. "We are a consistent importer as our orders are straightforward every month, with six months lead time. It would be the more complex, spasmodic, pre-Christmas deliveries that are facing the brunt of it."

Harvey Norman general manager of computers, John Slack-Smith, said Sony had informed him of its concerns about possible delays. Despite this, the mass merchant had not yet been affected in terms of stock deliveries, he said.

Lenovo communications manager, Heather Jones, said it had recorded delays of about 24-48 hours for stock travelling by air. Larger volume items by ocean freight were taking 3-6 days longer.

Since first citing the glitches, the ACS has set up a 24-hour helpdesk service, as well as redeployed 200 staff to assist freight forwarders and customs brokers to deal with the system. It is also running its legacy software and undertaking manual reporting alongside ICS to overcome an accumulation of containers at ports. Logistics companies have also extended their operating hours through weekends.

A Customs spokesperson, Matt Wardell, said containers were being being cleared and moved. "There's still a small backlog, but no outgoing delays for new containers," he said. "A significant number of freight forwarders and customs brokers are still experiencing problems with the system, some of which are problems at our end, others at theirs."

A meeting was held last Friday with the Minister for Justice and Customs, Senator Chris Ellison, and a specially formed action group to identify and address ways to combat the teething issues associated with ICS implementation.

Impending delivery
While it is unclear exactly how long it will take to restore import times to normal, several distributors and vendors were expecting the problems to continue through November.

Ingram Micro sales director, John Walters, said the distributor had not yet been affected. It was however, concerned about an impending delivery of a few containers later this week.

"We are OK at this stage, but if these problems are not fixed shortly, then it could have an impact on us," he said. "That could occur in two ways: if resellers have either got stock coming for a project rollout deadline, or for the mass merchants who have catalogues for Christmas. If they have these deadlines to meet, then there could be a major impact."

Ingram was also looking to direct containers to Port Melbourne rather than Sydney, which Walters claimed was not as badly affected by the jam. Representatives from Express Data and Bluechip Infotech said they had not yet been significantly affected by slower customs processing times.

"We understand that there are some delays with receiving both sea and air freight stock," Bluechip IT managing director, Johnson Hsiung, said. Bluechip normally shipped bulkier and volume goods by sea, he said. These ranged from LCD displays and computer cases to network hub switches and ADSL modems.

Express Data managing director, Ross Cochrane, said the vast majority of its stock came by air, which did not appear to be as backlogged as sea freight.

But for Kyocera's Fraser, any noise about importing problems was a worry.

"If we don't get our shipments every month, the sales suffer accordingly," he said. "We plan six months in advance, so we have a long lead time. But if we miss out on a shipment, we miss out on sales."

Acer's Vardenega said he was upset by the difficulty of getting confirmation on what was happening and when things would be back on track. "Customs have a responsibility to settle the problems as quickly and efficiently as possible," he said.


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