Australians trying to get their hands on hard-to-find rapid antigen tests (RATs) may face further delays in the weeks surrounding China's Lunar New Year.
The Lunar New Year holiday falls on February 1, and is typically the world's largest annual migration of people, although Beijing urged people to stay home last year and may do so again in light of Omicron outbreaks.
While some manufacturers have offered incentives to workers and promised Australian suppliers they plan to work through the holiday to meet high demand, logistics and transport could face a slowdown from late January to early February.
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Of the RAT kits approved for use by the Therapeutic Goods Administration (TGA), the majority are manufactured in China and mostly have a high or very high sensitivity, with some products from the United States, South Korea, Germany and Singapore.
Australia Health Products Central (AHPC), the Australian supplier for Hangzhou Testsea Biotechnology, said the manufacturer was hoping to fly in more stock this week and fulfil the orders placed by the end of the month.
AHPC managing director Xing Mao said the manufacturer had fewer staff in the lead up to Lunar New Year and would not be working at full capacity for a period of three to five days over the holiday.
"They start losing their staff already. Chinese New Year is very big. It doesn't matter where you're from, you go back to your home, so they will lose their interstate workers," she said.
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While she expects the first week of February to be slower, she anticipates it will bounce back to normal the following week.
"They're trying to get as much out [as possible]. Everyone's doing overtime as well. It's not going to be enough, I think."
RATs can return a result in 15 minutes, and while they have a lower accuracy than PCR tests, experts hope they can be used to reduce the pressure on PCR testing clinics.
China's State Council has announced the 2022 Lunar New Year national holiday starts on January 31 and ends on February 6.
Some Chinese logistics companies have issued notices that they will not accept any orders from late January and will resume business around mid-February.
While China's manufacturers usually see labour shortages during the holiday season, some are attempting to seize the business opportunity and retain production levels.
Clongene Biotech, a TGA-approved RATs manufacturer in China, said they had rearranged the workers' holiday shifts to meet the increasing global demand for RATs.
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"At the moment, we have around 800 workers working in the factory, plus 15 automatic machines operating 24 hours per day," said Yang Yajie, a marketing manager of Clongene.
"Our daily capacity can reach 5 million kits to match the global demand. We will keep operating during the Chinese New Year."
In China, local media reported that Acon Biotech, another TGA-approved Chinese manufacturer, planned to cancel the holiday and provide a special penalty rate and red packets — a monetary gift to express blessings and goodwill — to its workers.
Logistics in China could see further delays
While some manufacturers have vowed to work through the holiday, there could be transport delays, according to Greg Hough, CEO of Hough Pharma, the Australian supplier for Chinese manufacturer Biohit Healthcare.
"Where we may have problems — and I'm working on that at the present moment — is freight, as far as what the trucking situation and airports are doing over the Chinese New Year. That may have an impact on us," he said.
"Supply is not going to be an issue for us, or manufacturing is not going to be an issue for us, but getting it here may be an issue.
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"I think we'll be able to overcome it because I think they're considering this, obviously, as an urgent need, for not just Australia, but all over the world."
Both AHPC and Hough Pharma said they are currently bringing in RATs by plane, rather than shipping them in.
One Sydney-based logistics expert, who asked not to be named, who used to ship RATs to Australia in the past, said "the whole logistic process will slow down" over the holiday.
"It is a perfect storm for RATs supply when the deteriorating Omicron pandemic meets the Chinese New Year," he said.
"It's a seasonal thing, and everyone would expect some delays."
Professor Rico Merkert, chair in transport and supply chain management at Sydney University's Institute of Transport and Logistics Studies, said everything in international logistics tends to be affected by Lunar New Year due to peak in demand for shipping goods in the run up to the holiday.
"However, this year is indeed special with global supply chains severely disrupted, a container shortage, shipping rates [at] record highs even without [Lunar New Year] and now Omicron affecting not just global but also local distribution networks," he said.
Australian distributors are struggling to get kits from China
A survey by the Professional Pharmacists Australia found 94 per cent of pharmacists were struggling to get adequate RATs supply.
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As of midnight (1am AEDT), the Sunshine State is re-opened, without any restrictions for domestic travellers entering the state, either by road or by air. They will no longer need to show a border pass or a rapid antigen test. However, the government will maintain a mandate requiring people to be fully vaccinated to be able to enter events and venues.Acting Chief Superintendent Rhys Wildman was at the checkpoint as it was torn down overnight and said this is "an incredible outcome".
Jill McCabe, CEO at Professionals Australia, said the survey results showed pharmacists were overburdened.
"This situation is beyond dire. Pharmacists are telling us they are extremely overworked and under significant pressure and that they do not have the supplies and equipment they need to do their jobs properly," Ms McCabe said.
In Australia, since some states and territories are rolling out free RATs for certain categories of people, local RATs distributors have to compete with the government and are desperate to secure their RATs supplies before the Lunar New Year.
Big chain stores are preparing for the new wave of supply shortages.
"We are also taking into consideration the upcoming Chinese New Year to ensure orders are accommodated through this period," a Coles spokesperson said in a statement.
Supermarket giants Woolworths and Coles started stocking rapid antigen COVID-19 tests from early November last year.
The high demand has seen the supermarkets apply purchase limits of "one pack per one transaction".
Although most Australian RATs distributors said they continue to work with supply partners to order as many as they can and regularly replenish stocks, many Australians are struggling to find any in store.
A private RATs distributor in Australia told the ABC that her suppliers in China said they couldn't take orders for new test kits until the end of February.
"Most of them are saying the orders are full. Probably we may need to wait until March. The other problem is the logistics," she said.
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Rapid antigen tests will be part of the NSW's government's strategy to open schools for term one as planned amid the ongoing threat from COVID-19."We see a role of rapid antigen tests ... as we open up schools ... and that's why we procured here in NSW tens of millions of them," Mr Perrottet told reporters in Sydney on Tuesday.
Staff shortages in Australia in trucking and logistics was also a problem impacting the supply chain, Mr Hough said.
"Last week, for example, we had two planes come in and we couldn't get them unloaded — it took three days to get one plane unloaded, because ... we've got a shortage of staff at Sydney Airport, and then we have a shortage of truck drivers," he said.
"We race to get them in here, and then they sit on the tarmac at Sydney Airport for three days. It's very frustrating, but you know, we can only do what we can do."
The ABC contacted companies employing ground handlers for comment, and a spokesperson from Sydney Airport said, "We're working with all of our on airport partners to ensure the airport remains open and operates safely for our people and the travelling public."
The Australian Trucking Association told ABC's AM yesterday that they are facing staff shortages, estimating 30 to 40 per cent of staff were off work at the moment.
While asymptomatic close contacts in logistics and transport can get back to work if they have a negative RAT result, they are struggling to get enough tests.
Gary Mahon, CEO at Queensland Trucking Association, said it was a circular problem — the current shortage of truck drivers was in part driven by COVID close contact rules and testing requirements, and the rarity of RATs was impacting the workforce.
"At the moment, there's a lot of effort being put into trying to ensure our supermarkets remain replenished," he said.
More uncertainty surrounding China's ports
Apart from the holidays, China's stringent COVID measures could also have an impact on supply chains.
One Australian businessman, who asked not to be named, works in the medical and pharmaceutical industry and usually liaises with Chinese medicine manufacturers.
He said major ports in China had their goods piled up in the docks due to local governments imposing city lockdowns and mass testings during recent COVID-19 outbreaks.
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"We have seen delays in logistics hubs like cities of Hangzhou and Shanghai. Ports are tightening their COVID control measures," he said.
Since late 2021, key manufacturing Chinese cities have seen flare ups of new COVID cases, like Tianjin in the north, Xi'an in the west and Shenzhen in the south.
Recently, the area surrounding Ningbo-Zhoushan port, the third busiest container port in the world — which is close to the major RATs manufacturing city of Hangzhou — recorded around 20 new cases on January 9.
It has been reported that the port operations have been affected by COVID precautions, and there was a risk shipments of goods could be delayed.
Professor Merkert pointed out some containerised freight had recently moved to Shanghai to avoid delays after the latest COVID lockdown at the port.
The Australian Financial Review also reported that there had been "hold-ups" of RATs by Chinese customs officials.
In 2020, China imposed export controls on COVID medical products, such as detection reagents, medical masks, medical protective clothing, ventilators and infrared thermometers.
This is because on one hand supply was needed domestically, and on the other for quality control after reports of sub-standard PPE.
Although trade tensions between China and Australia have been ongoing for the past two years, the Sydney-based logistic expert said the delay was unlikely due to the political climate between Canberran and Beijing.
"RATs are a very crucial medical supply for many countries. The Chinese authorities want to ensure the quality and protect the reputation of [the tests], so they ask those manufacturers to provide as many certificates [including quality checks] as possible."
In China, RATs are not legally sold for private use. Instead, the government supplies the test kits to the hospitals and communities where it is needed.
China's Foreign Ministry and the Australian Health Department were contacted for comment but did not respond by deadline.