24 May 2016

Supply Chain Management Conference Michael Kilgariff, Managing Director, Australian Logistics Council

Getting it right: ALC action plan for safety, innovation and efficiency in the supply chain

• Getting the Structure Right • Getting Planning Right • Getting Rail Right • Getting Road Pricing Right • Getting Road Safety Right • Getting Technology Right

Infrastructure Australia 15-year Plan – recommendations

• National Freight and Supply Chain Strategy

• Freight corridor protection

• Integrating land use planning and transport planning

• Progressing road funding reforms

Economic Importance of the Supply Chain

• 1%=$2 billion – For every 1% increase in supply chain

efficiency, there is a $2 billion boost to Australia’s GDP.

– Forestry, manufacturing, processed food, wholesale and retail trade and construction would benefit most.

• Australia’s Freight task to increase 80% between 2010 and 2030 – At this rate, the freight task will triple by

2050.

Getting the Structure Right

• A Freight Policy Division within the Australian Government needed to progress reforms – Responsibilities:

• to work with logistics industry to drive positive economic reforms;

• to progress recommendations of Infrastructure Australia’s 15 year Plan;

• to work with Infrastructure Australia to develop a National Freight and Supply Chain Strategy.

National Freight and Supply Chain Strategy

As part of this strategy, Infrastructure Australia would:

• map nationally significant supply chains and their access to supporting infrastructure and gateways;

• evaluate the adequacy of the institutional framework supporting freight networks and recommend reforms and investments that will move the efficient movement of freight;

• facilitate the mapping of nationally significant supply chains and their connections across ports, airports, roads, rail and coastal shipping;

• identify the key bodies overseeing their efficient operation; and

• recommend a series of reforms and investments to enable the more efficient movement of freight.

Getting the Planning Right

• Poor planning one of the biggest inhibitors to improved supply chain efficiency.

• Lack of buffer zones impedes efficient use of infrastructure.

• Co-locating sensitive uses and freight infrastructure is poor long term thinking.

• Freight-related activities inevitably generate traffic, noise and air quality impacts on nearby areas and communities, and they are likely to increase as trade volumes grow.

• These failings restrict industry’s ability to operate 24 hours, 7 days a week, which is needed to manage the predicted freight growth over the next few decades.

• The flexibility of infrastructure operations and the preservation of freight corridors are critical to fulfilling the future Australian freight task.

Getting Rail Right • Imperative to shift more freight to rail.

• Inland Rail has been added to Infrastructure Australia’s Priority Project List.

• $594 million budget commitment to fund land acquisitions.

• Efficient linkages to the ports critical to efficiency of the national freight effort.

• Short haul rail to play an important role in improving supply chain efficiency.

Getting Road Pricing Right

• ALC supports reform that improves long term funding sustainability of key freight routes in a transparent and equitable manner.

• It is critical that funds collected are invested in the infrastructure used by the vehicle.

Getting Safety Right • Statistics show heavy vehicle

safety is improving

• Greater gains can be made through technology, an ‘operating licensing’ scheme, greater compliance with Chain of Responsibility obligations

• These measures are far superior to the Road Safety Remuneration Tribunal

• The RSRT caused significant confusion, inefficiency and costs across the industry

Getting Technology Right

• Technology also has an important role to play in supporting a more

efficient rail freight sector.

• Technology has an important role to play in improving safety, enhancing efficiency and boosting productivity.

• This is especially the case with heavy vehicles, with on-board

telematics systems recording speed data and driver break times.

Conclusion

• Freight efficiency matters for all Australians

• Without a long term plan for Australia’s freight future, we will miss an opportunity to build a stronger economy

• Thank you