Much of Australia's economic future relies on boxes, on ships, traversing the globe. Currently, they're barely going anywhere.

Key points: Many businesses have adopted a "just in time" model of holding low stocks of parts and materials and relying upon regular imports

Many businesses have adopted a "just in time" model of holding low stocks of parts and materials and relying upon regular imports The Transport Workers Union says members have reported as much as an 80 per cent drop in containers arriving from China

The Transport Workers Union says members have reported as much as an 80 per cent drop in containers arriving from China Industry veteran Neil Chambers said "there's no doubt" a recession is imminent

The shattering decline of our international trade heralds a grim economic outlook for this year, according to experts in the transport sector.

"I think there's no doubt that we are heading towards a recession," said Neil Chambers, director of Container Transport Alliance Australia.

Mr Chambers, who has ridden the ups-and-downs of the transport field for 35 years, sees it as inevitable.

"We think (container) trade is down 30 to 40 per cent, particularly on imports. The logistics industry, particularly with the international trade, is a really good indicator of economic activity and this will have an impact, no doubt, on the Australian economy. That's just evident from the lack of flow-of-trade from China," he said.

'Just in time' production

That is because we're now more deeply linked to world trade than ever before. Holding huge stocks of the parts and ingredients companies need takes up expensive warehouse space. So, many prefer to ship goods in to arrive for what is called "just in time" production.

Neil Chambers, of Container Transport Alliance Australia, predicts that Australia is headed towards a recession. ( Supplied: Scott Jewell )

But the coronavirus crisis has exposed our reliance on such imports, from ingredients to building materials.

"People in the building industry are struggling to get windows from China," said Iwan Sunito, chief executive of luxury construction firm Crown Group.

"And if you happen to have a building that requires a workshop drawing from China, the whole production stops completely."

Maritime lawyer Alison Cusack of Cusack & Co said the move to "just in time" production has created many efficiencies, until now.

"A lot of industries … don't have a buffer stock to deal with these things," she said.

"People want to be able to continue doing what they want to do without ever being affected, and that's not the current reality. The current reality is their life will change and maybe significantly and maybe a small amount".

Grim numbers

Our ports are largely privately-owned and only release data monthly — looking in the rear vision mirror. But some Transport Workers Union (TWU) members are reporting as much as an 80 per cent drop in containers arriving from China in some ports, with industries linked to the volume of trade feeling the impact.

"Transport operators have little choice but to cut workers' hours or ask them to use up their annual leave," the union's national secretary, Michael Kaine, said in a statement.

"Workers are understandably concerned for their job security, with many casual workers left struggling to pay the bills.

"Companies are operating on such tight margins that when work becomes unavailable through no fault of the operator or workforce, their ability to pay workers becomes reliant on government bail-outs."

Perth-based John Park has had more than 50 years in the industry. He doesn't think the slowdown will lead to a recession.

The head of business operations for supply chain peak body Freight and Trade Alliance (FTA), he sees trade being down closer to 10 to 20 per cent.

"I think panicking at this stage is a little bit over the top," Mr Park said.

"I think if we plan properly, the majority of our businesses will survive, will come out the other end of it in good shape."

But he does see Australian manufacturers and companies reliant on imports spreading their suppliers more, in future.

"I think off the back of the issue, [we] will see some of the larger importers, and maybe even some of the smaller ones, start to look for other sources of supply and just to balance their risks moving forward," he said.

Cash-flow problems

The trade industry — the circulation system of business — is worried about the impact on its businesses now, with many operators already complaining of cash-flow problems.

Its problems mirror their customers.

"It's also a delay in our job," Mr Sunito said.

"Because if windows aren't coming on time, if the delay is two to three months, that has to be factored into the building price or the apartment price towards the end."

Container industry advocate Mr Chambers agrees, likening the impact to the global financial crisis of just over a decade ago.

"It's unavoidable," he said.

"We'll have some real economic pain."