Supply chains, staff under pressure as Omicron spreads

  • Published January 7, 2022

The Australian,  7 January 2022

Supermarket shortages are set to intensify, with the Omicron outbreak forcing thousands of workers into isolation and creating major disruptions for critical industries and supply chains.

Australian Industry Group chief executive Innes Willox said business was caught in a “web of skills and staff shortages, supply chain disruption and Omicron uncertainty” as workers were forced to isolate.

“This will be exacerbated in the coming weeks as businesses reopen or seek to ramp up,” he said. “The uncertainty around staff availability is clearly impacting the production and delivery of key services across retail, hospitality and food processing.

“Industry needs clearer and workable rules around testing, isolation and furloughing to ensure they can safely operate and service their customers.”

Mr Willox said industry had warned governments “for months” about the need to recognise and promote rapid antigen testing.

“There has been disappointing reluctance from several states,” he said. “We are now paying the price for that stubbornness.”

Prime Minister Scott Morrison said “many sectors” of the economy would be affected by workforce shortages “because of people being furloughed because they have Covid”.

“With a high number of case numbers … that’s going to have an obvious impact on workforce,” he said. “The health workforce, the aged-care workforce, the disability workforce, but we’re also very focused on distribution centres for food distribution, food production and transport.

“That’s one of the reasons why yesterday we agreed to remove that seven-day rolling testing requirement for truck drivers.

“We need truckies keeping on trucking.”

The consequence of Omicron-enforced labour shortfalls could be keenly felt by consumers, as delays threaten the availability of products. Because of supply chain issues, Coles shoppers can buy a maximum of two minced meat products, chicken breasts, chicken thighs and sausages.

There will also be limits on rapid antigen tests, with customers permitted to buy only one kit per transaction.

A Woolworths spokesman said the company was experiencing delays with delivery.

With somewhere between “10 to 20 per cent” of his workforce in isolation, either with the virus or as close contacts, David Simon, executive chairman of national freight company Simon National Carriers, said Omicron was having a “massive impact” on his warehouse and transport operations.

“Supermarket chains will be prioritising getting food to our tables, but it probably won’t be the ingredients you went out shopping for. You might be having beef tonight instead of chicken,” he said.

Mr Simon said staffing shortfalls came as global supply chains began delivering overdue stock, meaning his warehouses were “bursting at the seams”.

Workforce issues meant Mr Simon’s customers were unable to receive deliveries due to a lack of forklift drivers.

“This is common across every operator. I’m reaching out to friends for warehouse capacity but everyone is in the same boat,” he said.

A crisis point, he said, was likely to come towards the end of January, as customer demand peaked alongside Omicron cases – predicted to reach about 200,000 a day nationally.

The Australian Trucking Association described the situation as “unpredictable and difficult”, but praised the national cabinet agreement to drop the requirement for drivers to have rolling seven-day tests.

“In terms of the states and territories, this situation has clearly been a shambles to date and we hope they fall in line with this sensible national cabinet decision,” a spokeswoman said.

Australasian Railway Association chief executive Caroline Wilkie said the move away from PCR testing to RATs was a “positive step”.

As part of the transition, she said ensuring a robust supply of rapid tests would be integral in the continued response to the Omicron outbreak.

Transport Workers Union national secretary Michael Kaine said he had been told by transport operators that between a third and half of their workforce was missing each day.

“The TWU wrote to the Prime Minister in October urging the government to provide rapid tests to road transport workers to avoid unnecessary delays and keep drivers on the road,” he said. “Instead, we have a completely predictable scenario where drivers are delivering rapid tests to be sold on the shelves of supermarkets and pharmacies – but they, like most Australians, can’t access them themselves.”

Australian Chamber of Commerce and Industry chief executive Andrew McKellar said the transport, food processing and hospitality sectors were particularly struggling with staff shortages.

“The labour shortages pre-Christmas were as severe as they had been in three decades. Now they’ve gotten even worse,” he said. “At the worst end of the scale some businesses have stopped trading. Others are scrambling to rope in some family to keep the show going.”

With almost 290,000 active cases, Mr McKellar said the number of close contacts currently isolating would be at least “two or three” times that figure – likely to continue soaring as infections continued to proliferate.

Health Services Union NSW secretary Gerard Hayes said the sector was experiencing the “pandemic of the workforce”.

“You’ve got a workforce that has been at 110 per cent for nearly two years. Their fatigue levels are enormous and they are chronic,” he said. “It is a real crisis. Hospitals are under intense pressure but the sleeper in this is the aged-care sector. Aged care cannot attract people and they cannot retain people."

Business Council of Australia executive director Jess Wilson said Omicron compounded the challenge of labour shortages.

“But we have to live with the virus. To keep supply chains working and businesses open employers and governments need to carefully manage the workforce shortages caused by isolating workers,” she said.