Industry, govt must work together to end supply chain crisis: ALC

By: Jason Whittaker


The laidback approach of the transport and logistics sector coupled with the reactive nature of governments is fuelling bottlenecks and

The laidback approach of the transport and logistics sector coupled with the reactive nature of governments is fuelling bottlenecks and threatening the future of the supply chain industry, according to Australian Logistics Council (ALC) Chairman Ivan Backman.

During the Chairman’s Address to the ALC’s annual forum, Backman accused the industry of lacking initiative by sitting back and waiting for governments to instigate reforms.

He said the industry, unions and individuals "must recognise reform is not solely the responsibility of governments". Rather, he said the sector must take the lead when it came to reforming supply chain bottlenecks.

The bureaucracy is adding to the problem, according to Backman, as it is ignoring bottlenecks for as long as possible.
"Governments have traditionally only responded when the infrastructure and regulatory bottlenecks become undeniable," he said.

And, as Backman told the forum, the situation can no longer be tolerated. He said current practices had led to a "supply chain crisis", with bottlenecks strangling the $150 billion industry.
"If we don’t take up the challenge of reform our industry will become a drag on the economy," he said.
"Without major reform the current bottlenecks we are already seeing will become intractable clots."

He called on the industry to work together with governments in addressing supply chain deficiencies, adding the current political climate afforded an "unprecedented opportunity" to work cooperatively with Labor governments, which are in power everywhere at a state, territory and federal level.

Failure to grasp this opportunity could, in Backman’s opinion, result in mining stockpiles being unable to reach the ports and no new houses being built due to an inability to deliver resources.

While noting these were "doomsday predictions", he said they "may not be far from the truth" if the supply chain continues on its current course.

In calling for governments and the industry to work proactively in partnership, Backman noted seven areas that had to be addressed.

Firstly, Backman told attendees the safety record, which is below the national average, must be improved upon as workers were four times more likely to die in the transport and logistics sector as opposed to other industries.
"This is unacceptable and cannot continue," he said.
"The central priority of our industry must be the safety of our people."

He said the industry must aim for "zero fatalities and injuries and zero tolerance of unsafe behaviour and practices."

Secondly, the industry and governments must prioritise infrastructure investments "in order to deliver the most efficient use of Australia’s supply chain".
"Planning and investment decisions should be taken from a whole-of-system view and industry is best placed to give such advice," he said.

Next came the issue of regulatory reform, with Backman chastising governments for their role in burdening the industry with red-tape and inconsistent rules.
"Governments must truly commit to implement nationally consistent rules – an area they have failed in for too long," he said.
"As an industry we must not accept 20th century regulations in the 21st century."

He wants the industry to take the lead by developing a national transport and logistics code as well as logistic supply chain teams to streamline regulations and standards.
"Industry must tell them [governments] where the problems are and how to fix them."

Backman also noted the skills shortage crisis, which is currently crippling the industry.
"Unless T&L (transport and logistics) as a whole identifies and strategically addresses crucial skills shortages, for both now and into the future, our supply chains will grind to a halt," he said.

The industry must also adopt new and innovative technology to combat climate change, according to Backman. He said the industry needed to diversify their energy use by looking at sustainable fuels.

To do this, as well as to remain competitive, Backman listed as his sixth area of importance investment in research and development in technological solutions.

Finally, he raised the issue of leadership, urging the industry to work together and "take responsibility for our future".
"If we are to truly address the inefficient links in our supply chains we must recognise we are one industry."
"If industry, individuals, associations, unions and governments commit to real action on the agenda set forward today we can succeed."

You can also follow our updates by joining our LinkedIn group or liking us on Facebook