Report underscores economic significance of logistics

By: Brad Gardner

A 1 per cent increase in productivity in the logistics sector will increase Australia’s GDP by $2 billion, new report says.

Report underscores economic significance of logistics
Michael Kilgariff says government and industry must focus on improving national supply chain efficiency.


Lifting the productivity of the logistics sector by as little as 1 per cent has the potential to deliver a significant boost to the Australian economy, a new report has found.

The report, The Economic Significance of the Australian Logistics Industry, details the importance of the logistics industry to Australia and has revealed it as a key contributor to the nation’s wealth.

It says the industry adds $131.6 billion (or 8.6 per cent of GDP) to the economy annually, is responsible for employing 1.2 million people and that improving its productivity will reap dividends.

"A 1 percent increase in the productivity of Logistics adds $2 billion to Australia’s GDP," the report from consultancy firm ACIL Allen Consulting states.

"The efficiency of logistics is important to Australia’s productivity because the industry affects all of Australia’s other industries."

The report charts areas it believes are essential to improving the running of the logistics sector, such as certainty around land and infrastructure planning, a whole-of-supply chain focus, removing regulatory overlaps, using high productivity vehicles and making greater use of railways.

The Australian Logistics Council (ALC), which commissioned the report, has used the findings to urge policy makers to act.

"The industry faces multiple threats to efficiency which cry out for action, including nationally significant logistics infrastructure, greater certainty on planning for freight, eliminating overlapping regulations which affect productivity and ensuring there is a whole-of-supply chain focus on strategic corridors," ALC managing director Michael Kilgariff says.

"Australia’s rising freight task makes it essential that government, industry and the community put aside sectional and regional interests and focus on improving national supply chain efficiency for the greater national good."

The report says challenges to industry efficiency include high fuel prices, over-regulation and urban congestion.

"Urban congestion is slowing the nation’s roads and hindering pick up and delivery activities for all modes of transport," it says.

"Urban encroachment is hindering planning approvals and development of necessary infrastructure, including: railways, roads, airports, port expansions and intermodal facilities."

It also says Australia’s system of national accounts does not capture all of the logistics activities undertaken because it only focuses on transport, postal and warehousing, excluding many other activities undertaken to deliver goods.

"The Transport, Postal and Warehousing industry definition fails to capture these logistics activities except the physical movement of goods," the report states.




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