Australia relies heavily on shipping and air freight for common goods, which was heavily impacted by the Crowdstrike outage on Friday

There are fears Friday’s worldwide tech crash could drive up the price of everyday goods deepening Australia’s cost of living crisis. 

Sanjoy Paul, UTS Associate Professor in Operations and Supply Chain Management,  and Towfique Rahman, Griffith University Business Strategy and Innovation Lecturer,  have warned of supply chain aftershocks from Microsoft systems going down.  

‘Transport systems in particular were hit hard,’ the two academics wrote in The Conversation.

The academics warned the global computer outage could have knock on affect and disrupt or delay shipping networks, air freight services, and transport logistics.

‘In the wake of the outage, both shipping companies and ports reported disruptions,’ they said.

‘Delivery firm Parcelhero has warned there could also be significant ripple effects for air freight.

‘Other air freight experts have said a full recovery could take days or even weeks.’

Even before the bad software update from tech security company CrowdStrike closed down computer systems worldwide, global supply chains were under pressure – one of the major factors contributing to inflation.

Australia relies heavily on shipping and air freight for common goods, which was heavily impacted by the Crowdstrike outage on Friday

Australia relies heavily on shipping and air freight for common goods, which was heavily impacted by the Crowdstrike outage on Friday

CrowdStrike's bug caused Microsoft systems to experience the dreaded 'blue screen' error for hours on Friday. Many major global firms are clients including banks and freight companies

CrowdStrike’s bug caused Microsoft systems to experience the dreaded ‘blue screen’ error for hours on Friday. Many major global firms are clients including banks and freight companies

Supply chain issues have been a problem since border closures and lockdowns during the Covid pandemic crippled trade.

This was compounded by Russia’s invasion of Ukraine and, particularly in Australia, tensions with China.

But, with Australia separated by vast oceans from much of the world, the freight problems are still lingering.

Red Sea shipping lanes have been disrupted by Houthi Rebel attacks forcing vessels to take longer route around Africa’s Cape of Good Hope to get to Asian ports.

Freight and Trade Alliance director Paul Zali said some in the industry were referring to the latest supply chain woes as a ‘baby COVID’ in reference to the surge in freight costs during the pandemic.

‘It is increasing costs, and that will flow on to consumers,’ he told Sky News last week.

‘From confectionery, to luxury items, through to medical goods, you name it, it’s all going to be caught up in them.’

The benchmark Drewry’s World Container Index, a composite of container prices, has more than doubled since early-May, lending weight to renewed concerns about the impacts of shipping on inflation.

Assistant Trade Minister Tim Ayres said: ‘Australia is at the end of the Southeast Asian archipelago’.

‘We rely upon trade with the world, and so this does have an effect on Australia.

‘Whether it’s congested shipping container terminals in Singapore or Malaysia or more broadly in the region, it has an impact on our imports and on our exports to the world.’

Container ships such as this one are finding the Red Sea perilous with the continued success of Yemen's Houthi rebels using drones to attack transport vessels

Container ships such as this one are finding the Red Sea perilous with the continued success of Yemen’s Houthi rebels using drones to attack transport vessels

The Albanese government was focused on inflationary pressures it could control, Senator Ayres said, including delivering budget surpluses and cost-of-living relief ‘that doesn’t put up inflation’.

Monthly inflation figures stoked fears of another interest rate hike or, more likely, rates staying higher for longer.

The Australian Bureau of Statistics recorded a higher-than-expected four per cent rise in May, up from 3.6 per cent in April.

Much hinges on June quarter inflation ahead of the next Reserve Bank of Australia interest rate meeting in August where interests rates could be jacked up yet again.

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