2019 Audit takes aim at roads and regulations standards affecting productivity
Infrastructure Australia’s (IA) 2019 Audit has warned of the growing challenges facing the freight industry over the next 15 years and beyond if infrastructure shortfalls and inefficient regulation are not adequately addressed.
The audit highlights that Australia’s freight task is expected to continue growing at a faster rate than population growth, “as our exports grow and consumers demand not only more goods, but increasingly expect goods to be delivered quickly and to their door”.
While it acknowledges Australia is “home to some world-leading supply chains”, particularly around the transport and export of minerals, the biggest difficulties lie in agricultural, non-bulk and urban supply chains, where “markets are hindered by inconsistent regulation between jurisdictions and levels of government”.
“Due to the variable standards to which roads are constructed or maintained, road operators in particular face restrictions on the weight, height, width and axle configuration of vehicles they use on different roads. This means access to routes can be inconsistent, confusing and can increase their administrative burden,” the report adds.
A productivity shortfall only serves to “increase costs across our supply chains, ultimately reducing our competitiveness”, with costs also passed on to consumers.
The solution, it notes, must involve nuanced policy, regulation and strategic infrastructure investment to ensure different supply chains can operate effectively.
INDUSTRY REACTION
In its response, the Australian Trucking Association (ATA) says governments must take action to boost trucking productivity by cutting red tape, improving access and addressing road bottlenecks, with the key to unlocking Australia’s freight productivity being reforms to truck laws and utilising high-productivity freight vehicles.
“Governments have allowed significant challenges to accumulate, which are now holding back our economy,” ATA chain Geoff Crouch says.
The Audit found supply chain costs account for around 10 per cent of the cost of a final product – which is ultimately borne by consumers, Crouch notes.
“Our current truck laws are an amalgamation of highly prescriptive laws that vary between jurisdictions. It is critical the current review of the national truck laws produces real change.
“Meanwhile, although high-productivity freight vehicles have been proven to lower costs, improve safety and reduce emissions, their uptake has been discouraged by the time-consuming and costly access permit decision-making process.
“There is a wealth of untapped productivity potential that will not be realised unless governments consult with industry and take serious action.”
Read IA’s projects priority list from last year, here
The ATA says its upcoming submission to the Heavy Vehicle National Law (HVNL) review on access will provide governments with clear recommendations on the need for a national reform program to deliver a modern, more productive and better-connected road freight network.
“New investment should be targeted to key freight routes and we need to plan for future freight needs, as recommended by the Expert Panel inquiry into freight and supply chain priorities, which included past ATA chair David Simon.”
The Australian Logistics Council (ALC), adding its weight to the debate, says the audit strengthens the case for immediate action.
“The audit released by Infrastructure Australia today is a timely reminder for all governments that the provision of quality freight infrastructure is essential to maintaining Australia’s economic position in the world and enhancing our quality of life,” ALC CEO Kirk Coningham says.
“ALC particularly welcomes the emphasis this audit places on addressing fragmented access conditions in our freight network.
“Although ongoing investment in freight infrastructure such as Inland Rail, Western Sydney Airport and improving on-dock rail facilities at ports will be critical, building new infrastructure will not solve every problem.
“Regulatory reform that delivers greater cross-jurisdictional consistency in access arrangements, operational matters and safety is essential to reducing delays in freight movement for customers and reducing costs for freight logistics operators, across all modes of freight transport.”
It notes the audit correctly identifies Australia’s regulatory regimes are inhibiting the take-up of technology that can deliver measurable improvements to the efficiency, safety and environmental performance of our supply chains.
“This includes technology that can capture data about freight movement, allowing for more effective route-planning and infrastructure investment, as well as the adoption of high productivity vehicles, electric vehicles and autonomous vehicles in the freight sector.”
“As all governments prepare their National Freight and Supply Chain Strategy Implementation Plans ahead of the November meeting of the Transport and Infrastructure Council, ALC will be encouraging all jurisdictions to commit to action that will address these fundamental challenges.”
The full outlook on freight can be found here.