Western Roads Federation seeks nation supply chain strategy

Western Roads Federation chief executive Cam Dumesny said as seasonal impacts put pressure on Australia's already stretched transport routes and soaring freight costs continued to hit the back packets of producers, leadership was needed at a national level to help deliver supply chain resilience across the country.

"We need our road, rail, sea and air working as a symphony - not a cacophony," Mr Dumesny said.

"It's time to get serious about hardening our logistics and supply chains around the nation to weather events such as fires, floods, cyclones etc.

"Due to the east coast floods, the rail system between Adelaide and Sydney is out and probably won't be back online until mid-January, so that's putting extra pressure on our roads and we simply don't have enough trucks to pick up the volume.

"We have no coastal shipping that we can flick over to in the event of a disruption to our land-supply links and we already have restricted air freight capacity within Australia, which is sitting at about 60-70 per cent of what it was pre-COVID.

"Meanwhile, our ports are completely inefficient, with trucks held for up to three hours and there is no accountability for those delays.

"We are in desperate need of a national supply chain strategy rather than the fragmented approach we have now for our road, air, rail and ports, where policies conflict with one another."

While acknowledging the work of transport and infrastructure ministries around the country, Australian National University Strategic and Defence Studies Centre professor John Blaxland said there was an urgent need for those government departments to co-ordinate on a much greater scale, at both a State and Federal level.

"We have to take a more visionary approach that looks to mitigate the risks we face and make the system more able to sustain disruptions and interference," professor Blaxland said.

"National cabinet has a responsibility to co-ordinate and drive that process."

With the sheer land size of Australia also contributing to the vulnerability of its road and rail infrastructure, professor Blaxland said State governments and Australian industries needed to be provided with more incentive to play a constructive, leading and long-term role in infrastructure development.

"We see this at the State levels around cities and a little bit in Sydney and Melbourne, but we're not seeing it on a transcontinental scale yet and that's where I think we need to go," he said.

The prospect of some kind of environmental disaster or a great power confrontation, contestation or conflict would promptly highlight the weaknesses in Australia's infrastructure and supply chains and the urgent need for these to be addressed.

With most of Australia's heavy trade occurring around its coast, professor Blaxland said interference of the country's ports could happen fairly easily.

"It's not something a potential adversary would struggle to do, so while we need to address the efficiency of our ports, we also need to think about the security and vulnerability of our country in terms of our supplies," he said.

The absence of internal water freight routes in Australia also highlights the significance of Australia's cross-country road and rail lines, including rail lines to Darwin and across the Nullarbor, which have been disrupted by floods and fires multiple times over the years.

"We are unlike Europe where they have internal rivers so they don't necessarily have to go around the coast to trade with other countries or the United States which has the major Mississippi River Delta going right through the middle of it," professor Blaxland said.

The nation's lack of onshore energy reserves also adds to the vulnerability of its industries, with Australia extremely dependent on refined oil from Singapore and South Korea, and only having about 14 days of supply ashore and less than that for the country's diesel.

Taking this into consideration, professor Blaxland said it was important that Australia somehow found greater ability to sustain a disruption at its ports and "hedge its bets".

"It would not stretch the imagination to see a range of scenarios, human made or a natural disaster like a tsunami, earthquake or some other catastrophe that could see that flow of oil and diesel interrupted," he said.

"What happened in Tonga last year, which saw its undersea cables disrupted, or another Krakatoa eruption in Indonesia would have a major disruptive effect - not only on the transit of refined oil but probably also the interim disruption of satellite communications and flights because of the ash cloud."

As the pandemic and its aftershocks continue to highlight Australia's reliance on its imports, professor Blaxland said the country's "just in time" business practices needed to move more towards a "just in case" mindset for our industries.

"That means having stockpiles of spare parts, it means having industry with the potential to redirect its efforts into the manufacturing of other things and it also means exploring the opportunities arising from 3D printing and other modern cutting edge technologies that are potentially transformative," he said.

These sentiments were echoed by Mr Dumesny who said policies aimed at aggressively moving manufacturing bases back onshore were desperately needed, and not just limited to our energy reserves.

"A diversity of energy sources and a move away from diesel to alternative fuel sources is also needed but, besides that, we also need to bring our other manufacturing capabilities back onshore," Mr Dumesny said.

"Things like farm machinery should be manufactured here in Australia and it's just crazy that it isn't."

Mr Dumesny said more resilient supply chains across the country would also support a shift to more onshore manufacturing.

"If we cite the United States, they have brought back 356,000 manufacturing jobs to the US under a plan accelerated by President (Joe) Biden," Mr Dumesny said.

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"Manufacturing today isn't like the old days of Henry Ford, where they owned the coal plant, the iron ore plant and everything right through to the final production of the car.

"These days, one part of a console might be made in Brisbane, some other part might be made in Melbourne and then the final assembly might be done in Adelaide or Perth, so we need efficient supply chains to be able to move those products around, because if they aren't ready to go it will be too expensive to manufacture things here within Australia.

"The US has identified the need to get their supply chains working and they've done that job a lot better than us."