IPA calls for freight body to tackle national decline


Trade competitiveness at Third World levels means action is urgent

IPA calls for freight body to tackle national decline
IPA chief executive Adrian Dwyer

 

Australia’s freight ignorance and dearth of policy application is biting the economy, Infrastructure Partnerships Australia (IPA) argues.

Noting the nation’s decline in trade competitiveness, the infrastructure construction industry body has released a report that urges the federal government to tackle it by establishing an independent, world-leading freight body called Freight Performance Australia.

"Australia’s freight network is the backbone of our competitiveness. It contributes $170bn to our economy, yet we lack clarity on why we do freight badly compared to our international peers," IPA chief executive Adrian Dwyer says on the launch of Fixing Freight: Establishing Freight Performance Australia.

 "Despite innovations in automation in recent years, over the last decade Australia has fallen from 23rd to 95th in the World Bank’s rankings for trade across borders.

"On these rankings, Australia is now trading behind Albania, Nicaragua, and Swaziland.

"This rapid fall in our trade competitiveness comes at the same time that Australia’s freight task is going to grow by 26 per cent over the next decade – we simply aren’t prepared for the task ahead.

"While we have an array of macro trade indicators, people would be stunned to know that we have no idea about the cost or time it takes to get goods to market or even the final destination for our goods. We have no data at all to measure how we drive costs down for businesses and consumers.

"In short, we can’t diagnose what we can’t see. That’s why our major recommendation is the creation of a single, statutory national body called Freight Performance Australia."

The performance body would draw on lessons from Australia’s international peers and independently measure and publish detailed analysis of congestion on our roads, bottlenecks and the overall performance of our logistic and supply chain networks.

"Freight Performance Australia will use data and information to engage freight industry, political and community stakeholders on key freight policy, regulatory reform and priority projects," Dwyer says.

"This would be done by using data that is currently held across all levels of government and private companies such as logistics providers, infrastructure companies, and major freight customers such as supermarkets.

"Bringing all this data together will give Australia the visibility needed to drive efficiencies in the system to improve Australia’s trade competitiveness, ultimately driving down the costs consumers pay at the checkout."

The new report calls on the Council of Australian Governments (COAG) to support the establishment of the independent performance body, with a board and management committee appointed by 2020.

The Australian Logistics Council (ALC) approved of the intervention saying it supports ALC’s long-held view that Australia must do more to capture data about the operation and performance of national supply chains.

"As was clear from many of the discussions that occurred at ALC Forum 2018, the lack of data about supply chain performance is a major frustration for industry participants, for investors and for governments wishing to plan more effective infrastructure investment," ALC MD Michael Kilgariff says.

"It is a truism that what is measured can be managed – and the absence of meaningful data around supply chain performance hampers Australia’s ability to quickly identify and rectify problems in our freight networks. This affects our international competitiveness."

"The problem is further compounded by the fact that freight data which is collected is often not coordinated or shared effectively, limiting its usefulness and ability to contribute to  improvements in freight network performance."

As argued in its submission to the Inquiry into National Freight and Supply Chain Priorities, the ALC wants the Federal Government, through the Bureau of Infrastructure, Transport and Regional Economics (BIRTE), to establish a National Freight Performance Framework monitor and measure key indicators relating to freight network performance.

It recommends that regulatory impediments to effective data sharing be addressed, and that the Australian Bureau of Statistics (ABS) should develop a Transport Satellite Account.

"It is pleasing that this report from IPA supports these ideas by recommending the establishment of an independent statutory body with the mandate and resources to close the data gap," Kilgariff says.

"This should be a key focus for the National Freight and Supply Chain Strategy [NFSCS] which is now being developed by the Federal Government and is expected to be finalised around November this year."

"Making more effective use of data in our supply chains will also be the major focus for industry discussions at the ALC Supply Chain Technology Summit 2018, being held in Melbourne on 10 May."

The IAP report can be found here.

 

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