BEYOND LOGISTICS : INVESTING IN NATIONAL SUPPLY CHAINS FOR ECONOMIC PROSPERITY AND ENVIRONMENTAL SUSTAINABILITY
By Kylie Hargreaves
INTRODUCTION The efficiency , or otherwise , of Australia ’ s freight network has a direct impact on our national productivity , economic growth , international competitiveness , and level of consumer choice . An efficient freight network can also contribute significantly to our national decarbonisation objectives .
Given the economic and social importance of moving goods quickly , affordably , and reliably , it is hardly surprising that national and state-governments of all persuasions have regularly released freight-focused strategies aimed at increasing the performance of their respective freight sectors .
But unlike Singapore , a country which consistently ranks highly in the Logistics Performance Index ( LPI ), Australia faces a number of unique challenges when it comes to managing its freight network . Australia is geographically enormous , physically remote from key trading partners , with major urban and regional centres located thousands of kilometres apart , and with many of our key export industries , such as resources and agriculture , located long distances from our ports .
To add to these geospatial challenges , other supply chain disruptions experienced as a result of the COVID-19 pandemic , various geopolitical tensions such as the Russia-Ukraine conflict , as well as more localised challenges such as wide-spread flooding , and the inability for some parts of our road infrastructure to cope with increasing freight volumes , has resulted in an unprecedented national focus on the revitalisation of our freight network .
OUR FREIGHT NETWORK When it comes to overland movement of commodities in bulk ( iron ore / coal / sugar ), rail is by far the dominant and lowest cost option available . The direct connection with production sites , the large and regular volumes , long distances , and considerable cost benefits , all make rail the obvious choice . Nevertheless , where rail infrastructure does not exist , or bulk commodities need to be delivered over small distances ( eg . gravel / sand to sites within 20 - 30km ), then road still plays a small but significant part in a reliable supply chain .
For non-bulk freight the picture is very different . Non-bulk freight includes both containerised freight ( eg . 20 – 40ft shipping containers ) and other non-bulk freight ( eg . machinery , barrels , pallets etc ). Here , despite rail offering a more competitive tonnes-kilometre ( tkm ) 1 price , rail on the east-coast of Australia accounts for a tiny share of the freight task .
To illustrate this , statistics from the Australian Infrastructure and Transport Statistics Yearbook 2023 note that in 2022 , 165 tkm of non-bulk freight was moved by road vs just 29.6 billion tkm was moved by rail .
The Australasian Rail Association ( ARA ) Freight Modal Shift Report 2022 further estimates around 10 -15 % of inter-capital non-bulk freight currently moves on rail . Sadly , this drops to less than 2 % on Australia ’ s busiest route , Melbourne- Sydney .
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