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Inquiry into National Freight and Supply Chain Priorities – final report

National Freight and Supply Chain Strategy

Ahead of the expected release of the National Freight and Supply Chain Strategy in November 2018, the Federal Government has released its final report from the Inquiry into National Freight and Supply Chain Priorities.

Why is this important?

Although it might not immediately apparent, the freight and logistics industry touches the lives of all Australians. As outlined in the report’s introduction:

Whether you live in a city or a regional or remote setting, all Australians rely on efficient and reliable freight movement. A truly liveable city is one that has freight systems and freight needs embedded within it.

Globalisation, international competition and fast-paced technological change mean that Australia cannot afford to be complacent in relation to freight and the physical and social infrastructure that delivers it. Failure to act will lead to loss of international competitiveness, loss of market share and higher cost of goods.

Then there’s the compelling case of the numbers. ACIL Allen Consulting have the Australian freight and logistics sector accounting for just under 10% of Australia’s Gross Domestic Product, contributing around $130 billion to the Australian economy. And this. It is estimated that “… a 1% increase in total factor productivity in the logistics industry would yield a $2 billion increase in national GDP.”

All of which demonstrates that optimising the nation’s freight and logistics sector is of high importance.

Priorities and critical action areas

The Inquiry into National Freight and Supply Chain Priorities final report contains 54 recommended priorities, across five critical action areas:

  1. An integrated approach: A nation-wide, consistent and integrated approach to freight and supply chain issues is needed to enhance the efficiency of the movement of freight.
  2. Measurement of freight performance: Supply chain activity and performance must be measured to monitor domestic and global competitiveness over time and identify areas where action is required to maintain and improve productivity.
  3. Planning for current and future needs: The conduct of freight supply chains needs to be properly integrated into land, sea and air use planning systems in states and territories.
  4. Act to deliver the priorities: Freight precincts need to have adequate capacity to handle expected future freight volumes, and there needs to be sufficient capacity in the associated land, maritime and air connections.
  5. Communicate the importance of freight: There needs to be a social licence for freight, and education and expectations that freight is a valued system contributing to community well-being and prosperity.

Listening to the industry

“The Inquiry Report released is comprehensive, and sets out priority actions for governments to take in relation to investment, reform and governance of Australia’s freight industry,” said ALC Managing Director Michael Kilgariff.

It is pleasing that so many of the Inquiry Report’s key recommendations closely align with those put forward in ALC’s submission. This means the government has clearly heard the industry’s message.”

“The Report articulates the challenges that are hampering greater supply chain efficiency and safety – a lack of data, antiquated planning practices, poorly coordinated infrastructure investment and poor appreciation of freight’s economic importance.”

“This Report now gives all governments the opportunity work cooperatively to develop a coherent and effective Strategy that addresses each of these priority areas.”

“Given the complexity of the interjurisdictional cooperation that will be required, it may be prudent to pursue an Intergovernmental Agreement to facilitate implementation, as occurred with other key economic reforms,” Mr Kilgariff said.

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