Views from industry
Freight Industry Reference Panel Report
The main message we wish to give governments and industry in this year’s progress statement is – “stay the course” and continue to work together to deliver the National Freight and Supply Chain Strategy which is so vital for Australia’s future prosperity. In saying this, we recognise that significant investment is being made by all levels of government in transport infrastructure projects to deliver greater efficiency, productivity and safety for our freight sector.
To make the most of these investments and ensure we are all incentivised to “stay the course”, we strongly encourage industry and governments to continue improving their collection and use of freight data, particularly where there are currently gaps, and use this to set clear indicators or targets with which to measure progress against the Strategy. We welcome initial steps in this regard and fully support the proposed engagement with industry to refine the Strategy’s key performance indicators. In the coming year our focus will be firmly on how the activities being undertaken in each jurisdiction contribute to the outcomes that the Strategy seeks to achieve.
We also call on the freight industry to look at how they can support governments’ efforts in this space - data being the foundation for everything else. Data sharing helps both government and industry to direct their efforts to where it is most needed, and builds the case for regulatory or administrative reform to improve freight productivity and efficiency. There are already businesses doing their part and we congratulate Australia Post, Toll Group, Russell Transport and DGL Australia Ltd, among others, for their ongoing leadership in this space.
As we approach two years of living with COVID-19, ongoing and systemic freight issues are being drawn more into the spotlight affecting the lives of all Australians. Disruptions have been exacerbated by lockdowns, increased mandatory testing and vaccination efforts across the country, impacting the movement of people and goods. The industry is also grappling with international trade shocks and delays, such as those caused by the MV Ever Given in the Suez Canal and the COVID-19 outbreak in Yantian Terminal in southern China. The cost of international shipping and ongoing delivery delays due to disruptions in supply chains, upon which Australia is so dependent, has increased and is expected to persist and may become the new norm for the medium term. There is no immediate relief in sight.
Consequently, businesses are increasingly moving from a ‘just in time’ to a ‘just in case’ supply model to adapt to these influences. This will result in greater demand for warehousing, incurring both an actual cost in storage fees and hidden cost in pressure on urban planning systems. Likewise, the need to consider building local manufacturing capability in some sectors to address supply chain disruption will become increasingly important. This is one reason why the Freight Industry Reference Panel was pleased to see all Australian governments endorse the National Urban Freight Planning Principles in May 2021 and welcomed the Productivity Commission’s inquiry into Vulnerable Supply Chains.
But there are other environmental, social and governance challenges emerging in the global freight scene. International mandates to lower pollution and decarbonise transport, and the increasing skills shortage brought about by a reduction in overseas migrants are presenting new challenges which governments and industry are yet to formulate adequate responses to. This is the reality of what the freight industry is facing.
While this may seem a gloomy outlook, Australia is well placed to meet these challenges. The National Freight and Supply Chain Strategy is very timely and gives us a solid foundation on which to build our future. Furthermore, it is important to acknowledge that real progress is being made.
- The transport infrastructure pipeline continues to deliver, with projects being completed (such as Adelaide’s North-South Corridor Darlington Upgrade and Northern Connector Projects, and the Adelaide – Tarcoola Rail Upgrade) and new projects started (such as the Western Australian Regional Road Safety Program and the third tranche of the Tasmanian Freight Rail Revitalisation project);
- Governments and industry are working together to improve supply chain efficiency, including through the National Rail Action Plan and completion of Stage One of the Advanced Train Management System;
- Governments are planning and setting aside funding for intermodal terminals, such as a new terminal in Melbourne to leverage off the Melbourne to Brisbane Inland Rail project, showing they recognise the importance of efficient transfer of freight across modes and using the ‘right mode for the right load’;
- Ongoing work by the National Cabinet and Transport Ministers over the pandemic to streamline and update the Freight Movement Protocol and Code to ensure a more consistent approach to COVID-19 testing and vaccination in line with advice from the Australian Health Protection Principal Committee;
- The Australian Government’s 2021-22 Budget commitment of $16.5 million to establish a National Freight Data Hub is a welcome ‘shot in the arm’ for the freight sector, who have long called on governments to improve collection of freight data to inform policy decisions;
- Ongoing programs are continuing to support resilient and efficient transport networks, such as the Bridges Renewal Program, with an additional $140 million in funding for 205 projects announced under Round 5; and
- The Australian Government continues to invest in telecommunications infrastructure, with $380 million committed to date to the Mobile Black Spot Program, which, so far, is providing new and improved mobile coverage to more than 8,000km of major transport routes.
- The Panel congratulates governments on this progress and acknowledges the close industry partnerships that have helped get these ‘on the ground’.
Call to further action
However, we also see a real risk that divergent approaches to managing COVID-19 outbreaks and political pressure to address immediate issues could see efforts fragment or be counter-productive. We are calling on governments to stay the course with the Strategy, adapting it as necessary but only in pursuit of the end goal – a safe, reliable and efficient freight and supply chain system that supports Australia.
Finally, the Panel encourages governments to see the progress they’ve made as a stepping stone, not a destination. For example, the National Urban Freight Planning Principles will only be as valuable as the real impact they have on planning systems. Our freight networks continue to grow, and so does the need for targeted government action
The Panel would like to thank those that completed the ‘freight industry feedback survey’ over July and August 2021, which helped inform this statement.
The survey highlighted that, of the four Strategy Action Areas, industry was most aware of government action to improve freight performance and location data. Respondents believed it was important for government to have timely data to inform decisions, and this was reflected in their willingness to share historical data with government provided appropriate protections were in place.
Industry had mixed views on the level of innovation within the sector, with some respondents urging governments to consider current and future administrative or regulatory processes to make sure they achieve their intended outcome without preventing innovation.
The survey also noted that community sentiment towards the freight sector had improved over 2020-21, as the COVID-19 pandemic has really highlighted how critical our freight networks are to the quality of life we enjoy in Australia.
The Panel would like to encourage everyone to contribute next year to ensure industry voices are heard.
Industry plays a critical role in helping implement the National Freight and Supply Chain Strategy. In recognition of this, Infrastructure and Transport Ministers agreed to set up a Freight Industry Reference Panel to provide industry a clear line of sight on implementation of the Strategy.
The Panel has an important role driving ambition for the Strategy. It acts as a vital conduit for industry views and provides independent advice on progress made.