The Australian head of delivery giant DHL has poured cold water on hopes that the restart of international travel could swiftly fix the country’s delivery crunch, with international supply chains unlikely to return to normal until 2023.
Gary Edstein, the chief executive of DHL Express Australia, told The Age and The Sydney Morning Herald he didn’t foresee the current extreme pressures on international logistics easing until at least mid-2022 and were unlikely to return to pre-COVID conditions until at least 2023.
Gary Edstein, CEO of DHL Express Australia, doesn’t think shipping will return to normal until 2023.
This is despite national carrier Qantas on Monday commencing its first international commercial flight out of Melbourne in 20 months as part of a move to gradually recommence international travel. Passenger jets are important parts of global supply chains, as companies often use their extensive cargo space to ship goods in and out of countries.
However, Mr Edstein said it will be some time before the number of incoming international flights will notably reduce delivery times for consumer products. Global logistics chains are currently so stretched that DHL has been forced to charter its own fleet of passenger jets to keep retailers and shoppers stocked up as the Christmas rush gets underway.
“We’re just going into Christmas peak, it’s actually happening right now as we speak,” he said. “And based on our forecasts, we’ve had to put on an additional 102 passenger aircraft freighters.”
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“All we do is use the belly of that aircraft … the upper deck is not filled at all, even with passengers or cargo. We’re only using 20 tons of capacity of a 100-ton aircraft.”
This is an “incredibly expensive” endeavour and explains the current high cost of freight and some consumer goods, the chief executive said. However, DHL believes it will put the business in good stead for the Christmas rush, which is likely to test the country’s already strained supply chains.
Both international and domestic logistics networks are under massive demand at the moment, with a perfect storm of both heightened spending and COVID-related delays at key ports causing a compounding crunch of supply lines, with freight costs skyrocketing over 300 per cent.
