Global supply chains have never been more unpredictable. From industrial disputes and global trade tensions to climate-related events like Queensland’s recent Cyclone Alfred – which temporarily closed the Port of Brisbane and disrupted shipping routes nationwide – Australian importers are facing uncertainty on a day-to-day basis.
Around 47% of Australian businesses see themselves as vulnerable to supply chain disruptions, found research by NAB, with rising raw material costs (71%), upstream supply issues (70%) and the need to meet customer expectations quickly (67%) being key challenges. The top five industries most affected by supply chain disruptions include retail trade, food and beverage, wholesale trade, manufacturing and construction, according to NAB.
“Australia is heavily reliant on imports. There’s so much going on globally that impacts us – from ships getting stuck in the Suez Canal to massive disruptions caused by weather events,” says Joshua Richards, Director at Twin Peaks Finance. “Longer lead times and increased costs mean businesses need support, and Trade Finance is the natural solution.”
Why supply chain volatility isn’t going away
The assumption that supply chains are stable has been completely upended in recent years. Many businesses underestimated just how fragile global logistics could be until COVID-19 brought much of the system to a halt.
“Pre-COVID, everyone thought the system was rock solid. You’d buy from China and, three weeks later, your goods were here,” says Rudy Messerschmidt, Director of Working Capital Solutions, QLD at Octet. “But now, businesses are often facing delays at almost every step. It depends on where the disruption hits, but it can blow out your lead time from six weeks to twelve or more.”
McKinsey found that, once companies experience a supply chain disruption, it takes an average of two weeks to plan and execute a response, leaving many businesses exposed to costly delays.
Businesses are facing added complexity, as some suppliers are disappearing altogether, notes Joshua. “That forces business owners to find new suppliers, bringing a whole new set of challenges.
One of those challenges is sourcing from countries businesses hadn’t worked with before COVID-19. While diversification is smart in an uncertain market, it often requires navigating unfamiliar regulatory environments and payment terms – placing further pressure on working capital and impacting business agility.
Building financial resilience through Trade Finance
The risks of supply chain disruption are particularly acute for SMEs, with Australian business confidence reducing in February despite a reduction in interest rates. Fewer Australian businesses feel they could weather the loss of a major supplier or client without financial damage, believing such a loss would put them at risk of insolvency.
The findings underscore just how fragile supply chains remain for many businesses – and why robust financial strategies are essential.
In this landscape, Trade Finance has become an indispensable tool for managing uncertainty. “Trade Finance helps protect the whole system. Businesses face risk at every stage of their supply chain, and Trade Finance takes some of that risk out of the equation,” says Rudy.
“One thing that’s constant in business is that nothing is constant,” notes Joshua. By unlocking working capital tied up in inventory or goods in transit, Trade Finance gives businesses the flexibility to plan ahead.
Proactive finance for proactive supply chain management
For Australian businesses navigating global and local market uncertainty, Octet Trade Finance is more than just a funding tool. It’s a way to manage risk and seize new opportunities in a volatile market.
Trade Finance unlocks working capital tied up in international and domestic trade, enabling businesses to stay responsive in the face of delays and disruptions. As a buyer, you can pay suppliers upfront and repay later. As a seller, you get paid faster – keeping your cash flow healthy and operations moving.
But resilience isn’t just about liquidity – it’s about control. In a period of economic instability and ever-changing exchange rates, Trade Finance can also safeguard against currency fluctuations with upfront FX transparency and locked-in, competitive rates.
Security is another key piece – particularly when navigating the complexities of working with new suppliers in unfamiliar markets. Global trade introduces a host of risks, from data exposure to payment fraud, making robust security and compliance measures essential. Increasingly, businesses are turning to digital supply chain platforms that offer built-in safeguards and full transactional visibility – helping them monitor every step, from procurement to payment.
“Australia is a heavy importing nation,” says Rudy. “As long as we’re importing a substantial portion of what our consumers consume, we’re going to need this kind of funding and security.”
Your global supply chain partner
Octet’s innovative working capital solutions provide the flexibility and support to navigate supply chain management challenges, strengthen supplier relationships and optimise cash flow. Our Trade Finance and intuitive Supply Chain Platform help businesses across a range of industries build resilience in an unpredictable environment.
Get in touch to discover how we can power your business.
Disclaimer: These comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy, and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.
