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Freight taken for granted: Davies

ALC chair foreshadows consequences to supply chain efficiency inaction

 

ALC chair Philip Davies has warned that, unless a more considered and long-term approach to planning and using freight infrastructure is adopted, Australia will be unable to meet the growing freight task relative to population growth.

His comments come in the Committee for Economic Development of Australia (CEDA) November 2018 report, Connecting people with progress: securing future economic development.

Davies’ perspective, in his excerpt titled ‘Business as usual won’t deliver the goods’, contends that, despite representing around 8.6 per cent of Australia’s GDP and employing around 1.2 million people, enhanced supply chain efficiency is not necessarily a top priority for all governments.

He likens freight to IT or energy: an industry not given much appreciation or attention to until problems occur.

“People don’t necessarily make the connection between the truck they see on the road, and the goods they buy on the shelves or online. However, they do notice if there are delays in the receipt of their deliveries, or if increasing shipping costs place upward pressure on consumer prices.”


Read more about ALC’s 12 key priorities for transport and logistics to target through the year


Davies points to research that Australia’s national freight task is expected to double over the next two decades, and that every 1 per cent increase in supply chain efficiency will boost Australia’s GDP by around $2 billion.  

However, freight networks will struggle to meet demand without significant policy changes or addressing regulatory restrictions and inadequate planning processes, and “we need to get away from the idea that building new infrastructure [such as Western Sydney Airport and the Inland Rail] is a cure-all”.

That’s because restrictive policies prevent 24/7 operational flexibility that freight logistics operators need for maximum efficiency. 

Hurdles that are “catching up with us” include:

  • vehicle/noise curfews in major cities or inner-urban communities
  • reduced supply of logistics land around key freight facilities such as ports due to governments re-zoning land previously used for industrial purposes to new residential developments
  • a lack of meaningful data analysing supply chain movement and performance around the country, making it difficult to measure Australia’s performance against international competitors and effectively plan investment in domestic freight infrastructure.  

Davies calls for leaders and policymakers to address “complexities and trade-offs that might be necessary to meet expectations around efficient deliveries and liveable communities” to overcome capacity limits within existing freight networks causing visible road congestion in major cities “driven by rapid population growth and poorly coordinated infrastructure planning”.

The development of a National Freight and Supply Chain Strategy, intended to cooperate with all levels of stakeholders to establish a 20-year national supply chain framework and is due for release in May 2019, is hoped to be key to implementing an effective and consistent approach to corridor protection, land use planning and implementing consistent data standards.

“It is up to governments at all levels to now work cooperatively in making certain it delivers the outcomes the freight logistics industry needs to achieve those ends,” Davies concludes.

CEDA’s full paper can be read here.

 

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