The Strait of Hormuz may have technically reopened, but its brief closure exposed a much bigger question for WA’s regional businesses.
What happens when the equipment keeping your operation running can’t be repaired, replaced or supported when you need it?
For years, buying decisions were largely driven by performance, efficiency and upfront cost.
Today, they’re increasingly driven by different questions.
Who do we call?
How quickly can someone get here?
What happens if a replacement part is sitting on a ship that can’t transit one of the world’s busiest shipping routes?
New ABS data, released last month to capture the commercial impact of the Hormuz closure, found 72 per cent of Australian businesses negatively impacted by fuel costs or availability.
There was one in six experiencing active supply chain disruptions, and three in five already changing how they operate in response.
Farmers have always understood the value of planning for uncertainty.
Weather, commodity prices and seasonal conditions are all outside their control.
Increasingly, global supply chains belong on that list.
As a result, purchasing decisions are increasingly being viewed through the lens of risk management as much as price.
For businesses across regional WA, where operations are often hundreds of kilometres from the nearest service centre, those disruptions are amplified.
Waiting days for technical support or weeks for replacement parts can quickly turn the cheapest purchase into the most expensive decision when operations grind to a halt.
Nowhere is this more visible than in how businesses evaluate power infrastructure for remote and off-grid applications.
There are diesel generators sitting on regional sites across WA that are burning fuel not needed — usually because operators made the comparison on a two-year horizon.
This made sense when fuel was cheaper, freight was reliable and lead times were predictable.
That’s no longer the case.
Extend that window to four or five years and the economics of hybrid systems, integrating solar, battery storage and backup generation, look fundamentally different.
The cheapest quote only looks cheap until the project stops.
Once equipment is sitting idle, workers are waiting and replacement parts are weeks away, the purchase price becomes largely irrelevant.
This is particularly acute in regional and remote WA, where distance compounds every supply chain assumption.
Equipment used on remote agricultural, construction or mine sites is exposed to extreme heat, dust, corrosion and conditions that stress both hardware and the humans maintaining it.
Heat management systems need to be designed around WA’s extremes, not adapted from products built for different climates.
The knowledge that comes from years of deployments across Australian conditions is hard-won and imported alternatives, however well-engineered, don’t have it.
Across regional WA, from the Pilbara and Kimberley to the Wheatbelt and Great Southern, operators increasingly want to know who will answer the phone when something goes wrong.
They want to know replacement parts are already in Australia, that technical expertise understands local operating conditions, and that support isn’t dependent on an overseas help desk.
When a breakdown can halt harvest, stop irrigation, delay grain handling or stall a construction or mining project, responsiveness becomes every bit as valuable as the equipment itself.
The supply chain dimension follows the same logic.
In the renewables sector, the conversation is less about Australian-made as a point of pride and more about a practical question — is the stock here, are the parts available, and is the support local?
For some organisations, this is renewing interest in suppliers with local inventory, local manufacturing capability and simpler, more reliable supply chains.
None of this is an argument against global supply chains.
Australian businesses will always be connected to international markets, and that’s a strength.
But recent events, from COVID to the global energy crisis and now the Strait of Hormuz, have exposed the cost of assuming supply chains will always work as planned.
For regional businesses, resilience isn’t an abstract business strategy.
It’s what keeps harvests moving, infrastructure projects on schedule and essential services operating when global events disrupt supply chains.
Access to Australian expertise, Australian support and, where possible, Australian manufacturing is increasingly part of how the smarter operators are building that resilience in.
Local capability, properly valued, is a source of competitive advantage.
The businesses that thrive over the next decade won’t simply be those that bought equipment at the lowest upfront price.
They’ll be the ones that can keep operating when the unexpected happens.
That’s why resilience has become the new return on investment.
Rory Kennard is managing director of Makinex Renewables
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