Practical Strategies for Australian SMEs Facing Supply Chain Disruptions


Question mark and arrows overlaid against a background scene of the Panama Canal and a cargo ship

Recent disruptions in the Panama Canal, compounded by Red Sea rebels, port industrial actions, and protests, have significantly impacted global supply chains. Australian SMEs, facing diverse challenges, are urged to seek strategic and versatile solutions to protect their businesses against what looks like yet another “perfect storm” of global freight problems.

Understanding the Challenge

The Panama Canal disruptions, influenced by severe droughts and evolving geopolitical tensions, serve as a wake-up call for businesses to proactively prepare for prolonged global trade challenges. In addition, Red Sea rebels, port industrial actions, and protests contribute to the complexity, creating a comprehensive set of disruptions affecting the international supply chain sector.

Strategies for Resilience

In this context, Australian businesses are confronted with unprecedented challenges that demand proactive and strategic responses. Instead of waiting for the perfect storm to pass, enterprises should explore and implement measures to safeguard their operations.

The following strategies for resilience serve as a guide for businesses aiming to fortify their supply chains and navigate disruptions effectively:

1. Diversifying Supply Chains:

  • Challenge: Lengthened supply chain routes and delayed shipments impact production schedules.
  • Action: Implement diversified supply chain strategies to mitigate the risk of extended disruptions. Identify alternative routes and logistics partners to reduce dependency on vulnerable transit points. Conduct a thorough risk assessment to pinpoint potential weaknesses in the supply chain.

2. Technology as a Resilience Driver:

  • Challenge: Components sourced from affected regions may experience delays, impacting production.
  • Action: Embrace advanced technologies for real-time supply chain visibility. Invest in data analytics to anticipate disruptions and optimize inventory management. Implement tracking systems for better monitoring of goods in transit, minimizing the impact of unforeseen challenges.

3. Working Capital Solutions:

  • Challenge: Financial strains of prolonged disruptions impacting working capital.
  • Action: Anticipate financial strains by fortifying working capital. Explore tailored financing options, such as supply chain and trade financing, to ensure liquidity during extended challenges. Foster collaborations with financial institutions for flexible credit terms and lines of credit.

4. Continuous Risk Assessment:

  • Challenge: Ongoing geopolitical and environmental risks affecting global trade.
  • Action: Regularly reassess risks and develop robust contingency plans that prioritize long-term resilience over reactive measures. Stay informed about global trends and emerging challenges to adjust strategies accordingly.

5. Collaboration and Communication:

  • Challenge: Delays in the arrival of goods affecting inventory levels, leading to potential stockouts.
  • Action: Strengthen partnerships with suppliers, logistics providers, and industry peers for collective problem-solving. Collaborate closely to share insights and find innovative solutions. Establish transparent communication channels to adapt swiftly to evolving situations and manage expectations effectively.

6. Investing in Talent for the Future:

  • Challenge: Components sourced from affected regions may experience delays, impacting production.
  • Action: Upskill your team to navigate the complexities of a dynamically changing supply chain landscape. Foster a culture of continuous learning, ensuring that your team is proficient in the latest technologies and well-versed in global trade dynamics.

7. Sustainable Practices for Enduring Success:

  • Challenge: Exporters facing delays in shipping perishable goods, leading to quality concerns.
  • Action: Infuse sustainability into supply chain practices for enhanced environmental resilience. Adopt eco-friendly transport and packaging options, aligning your business with long-term viability.

Trade Finance as a Strategic Buffer

Businesses face a myriad of challenges, from supply chain disruptions to delayed payments, requiring not only support but also the financial flexibility to navigate uncertainties.

Trade Finance provides as a strategic lifeline to SMEs, offering benefits that are designed to empower businesses during disruptions. This provides the necessary breathing room, ensuring businesses can continue operations smoothly amidst the ever-evolving dynamics of the global trade landscape.

Here are some of the key benefits to consider:

1. Access to Funding Upfront:

  • Consider financial solutions like Fifo’s Trade Finance Line of Credit, providing quick access to funds and the ability to pay deposits and invoices even before goods are shipped. This ensures businesses can meet immediate financial needs during disruptions..

2. Extending Payment Terms:

  • Use trade finance to extend payment terms up to 210 days, offering flexibility in managing cash flow and reducing the strain on working capital.

3. Addressing Cash Flow Gaps:

  • Leverage trade finance to bridge cash flow gaps caused by delayed payments or unforeseen circumstances, allowing businesses to continue operations smoothly.

4. Easing Supply Chain Pressure:

  • Utilise the revolving line of credit offered by trade finance to alleviate pressure on the supply chain, ensuring a steady flow of goods and materials.

5. Mitigating Risks and Bad Debt:

  • Trade finance solutions can de-risk exposure to bad debt, providing a financial buffer for businesses during uncertain times.

6. Customised Financial Solutions:

  • Unlike traditional lenders with rigid processes, Fifo’s trade finance offers out-of-the-box solutions tailored to the unique needs of SMEs. This flexibility and bespoke treatment can be a game-changer for SME businesses especially, who often face challenges with traditional banks understanding their position and needs.
See how Fifo’s Trade Finance offers your business the benefits of BNPL funding to mitigate supply chain pressures

Case Study

In the wake of pandemic-induced disruptions, Australian SMEs faced challenges ranging from supply chain issues. However, resilient entrepreneurs like Linh Nguyen, co-founder and director of Scrub Lab, not only weathered the storm but experienced growth by embracing non-traditional lending solutions. Facing supply-chain hurdles, found a reliable financial partner in Fifo, enabling Scrub Lab to navigate delays and meet customer demands.

Scrub Lab’s Supply-Chain Struggles

Challenge: Supply-chain issues hampered Scrub Lab’s ability to meet the demand for their popular antimicrobial scrubs.

Action: Facing delays and presales, Scrub Lab sought assistance from Fifo Capital to maintain operations and order stock.

Outcome: Fifo Capital’s fast and accessible funds, coupled with excellent customer service, enabled Scrub Lab to navigate supply-chain disruptions smoothly.

Read the full story in this article published ni Smart Company.

Industries Most Impacted:

Certain industries face heightened vulnerability to disruptions in their trade and financial operations. Understanding potential scenarios and taking proactive measures is crucial. Here are specific challenges and recommended actions for key sectors:

  1. Manufacturing and Distribution:
    Challenge: Lengthened supply chain routes and delayed shipments impact production schedules.
    Action: Implement diversified supply chain strategies to mitigate the risk of extended disruptions.
  2. Retail and Consumer Goods:
    Challenge: Delays in the arrival of goods affect inventory levels, leading to potential stockouts.
    Action: Trade finance can be used to maintain healthy inventory levels and secure payment terms up to 210 days.
  3. Tech and Electronics:
    Challenge: Components sourced from affected regions may experience delays, impacting production.
    Action: Leverage trade finance to secure upfront cash for pending trade orders and mitigate supply chain disruptions.
  4. Agriculture and Food Industry:
  • Challenge: Exporters face delays in shipping perishable goods, leading to quality concerns.
  • Action: Use trade finance to ensure timely payments and explore alternative transportation options.

The Path Forward

As the global freight industry faces unprecedented challenges, proactive and collaborative efforts are essential for mitigating disruptions. Businesses and consumers can navigate this intricate situation by embracing flexibility, open communication, and strategic planning. While uncertainties persist, adaptable approaches and informed decision-making will be key to weathering the current storm in the global supply chain landscape.


Successfully navigating the complexities of global trade requires resilience. Australian SMEs not only have the capacity to weather disruptions but can also emerge stronger. Ready to fortify your business? Take action now. Implement these strategies and collaborate with a trusted financial provider to navigate global trade confidently.

Build Resilience with Fifo

Start now with our award-winning Trade Finance. Extend payments, bridge gaps, and navigate risks effectively. Click here to connect with the Fifo team and start building your resilience.

Subscribe to our newsletter

Keep reading

5 key ways to improve cash flow management for seasonal businesses

As a small or medium-sized seasonal business owner, you know that cash flow management is crucial to your survival. While your business may experience revenue peaks during certain seasons, the off-season can pose a challenge when it comes to covering expenses. However, securing financing can be even more difficult for seasonal businesses, as traditional lenders […]

View more

Supply chain finance advantages for Australian businesses

Supply chain finance, also known as reverse factoring or dynamic discounting, is a financial tool that can potentially bring a range of benefits to businesses in Australia and help strengthen the business sector. At its core, supply chain finance involves the financing of a company’s accounts payable through a third-party intermediary, such as a bank […]

View more

Why business loans are becoming yesterday’s hero

Loans have been the go-to solution of business finance for many years. But now there‚Äôs growing evidence that loans are falling out of favour with an increasing number of businesses. In its place we’re seeing a steady increase in businesses seeking alternative finance options as a key way to access the funds they need to […]

View more