Unprecedented bushfires in Australia impact infrastructure and local supply chains

Unprecedented bushfires in Australia impact infrastructure and local supply chains

The 2019-2020 bushfire season in Australia has proven to be considerably destructive. Over 6.3 million hectares of forest and parks across the country has burnt, as the country faces one of its worst bushfire seasons on record since it started in September 2019, killing 28 people and destroying 2,500 homes. Beyond the edificial damage and human cost, the fires have cause approximately USD 110 billion (EUR 98.6 billion) in damages and economic losses, due in part to losses incurred from highway closures, production stoppage, power outages as well as flight cancellations and delays. Australia’s states that have endured the most disastrous economic effects of the fires are New South Wales (NSW), Victoria, and South Australia, by virtue of their respective sizes, connectivity to other states as well as the world, and economic potential. Other states, such as Queensland, home of many of the country’s vital coal mines, and Western Australia (WA) have also been impacted by the fires.

Major seaports and airports have remained operational nation-wide, yet domestic ground shipping to ports has been visibly impacted, mostly by interstate highway closures. Such examples include the closure of the Eyre highway between South Australia and Western Australia, stranding several perishable shipments between the states as well as to export markets, and impediments to shipments between New South Wales and Victoria.

The Australian economy is heavily commodity-dependent, and the fire’s impact on lanes and locations which facilitate the export of commodities has been considerable, and is likely to worsen the longer the fires remain untamed. One example of impact has been a 3.4% dip in Australian dairy production in November 2019 compared with 2018. Moreover, the nickel mining industry in Victoria faces temporary operational suspensions due to power outages from the fires’ impact. Coal exports, of which mining enterprises in Queensland have seen production halts, face broader questions around its viability and its role in contributing to climate change.

While a response is underway, warmer temperatures are expected in the coming weeks, indicating that this may exacerbate a new risk of bushfires due to high winds. This Resilience360 special report analyzes the impact of the fires on supply chain operations in Australia and provides measures on how organizations can maintain visibility of vulnerable suppliers and transportation lanes.

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