Key stakeholders are calling for a renewed focus on better infrastructure and strategic investment to create more efficient supply chains.
Strengthening the resilience of Australian transport infrastructure and addressing high freight costs remains a top supply chain priority for food and grocery manufacturers, according to a survey at the Australian Food and Grocery Council’s (AFGC) Supply Chain Summit.
Frequent failures of transport infrastructure, due to natural disasters and other factors, have hindered industry productivity through congestion and delays.
In addition, rising energy, freight, and input costs are putting pressure on food and beverage manufacturers, impacting profitability, and future national capability.
AFGC stakeholders have called on the government to implement recommendations from its recent National Freight and Supply Chain Strategy.
The National Freight and Supply Chain Strategy was designed to enhance the safety, productivity, and resilience of freight and supply chains as demand continues to grow.
The strategy outlines a national plan for government and industry to follow across all freight modes until 2040 and beyond, with a review scheduled every five years.
Some key points included:
- A new goal on ‘decarbonising the freight and supply chain sector’.
- An updated goal of ‘safe, secure and resilient supply chains’ and for resilience to be strengthened in the body of the refreshed strategy.
- An updated goal of ‘a skilled, portable and adaptable workforce’ and for skills and workforce to be strengthened in the body of the refreshed strategy.
- An updated goal of ‘improved efficiency, productivity and international competitiveness’.
Another recommendation was to reflect the National Urban Freight Planning Principles in the new strategy, and interoperability to be expanded and strengthened in the refreshed strategy.
The seven principles are:
- Understand the value, needs and characteristics of freight movement and incorporate in strategic and statutory transport and land use planning.
- Safeguard the resilience of all major freight handling facilities and freight corridors within and between neighbouring jurisdictions, including local government areas.
- Identify and plan areas for new freight facilities and freight-intensive land uses.
- Plan for efficient freight movements and complementary land uses around freight facilities and precincts, including intermodal terminals.
- Promote building and precinct design and usage that considers freight needs.
- Realise the importance of rest and refuelling facilities.
- Respond to changes in freight movements, including smaller scale freight movement and emerging technologies.
It also urges government investment to fortify the East-West freight rail line and East Coast freight rail network, critical arteries for delivering food and groceries to consumers nationwide.
“The vitality of the food and grocery industry hinges on efficient supply chains to ensure uninterrupted access to food for Australian households,” said AFGC CEO Tanya Barden said.
“Yet the industry is constantly dealing with disruptions and preparing for future threats.”
When the strategy was released in 2019, it marked the first time that government and industry had come together to create a national plan aimed at boosting the efficiency, effectiveness, and reliability of Australian supply chains.
Australia’s economy relies heavily on efficient freight transportation across long distances and international borders.
The country’s supply chains are essential to handling the increasing freight demand, which is expected to rise by 26 per cent from 2020 to 2050.
This means freight movement will grow from 756 billion tonne-kilometres in 2020 to 964 billion tonne-kilometres by 2050.
Meanwhile, domestic supply chains are necessary for supporting international trade by connecting trade gateways like ports and airports with the wider economy.
Without resilient infrastructure, the industry has been forced to divert resources away from activities that increase innovations and productivity to cope with infrastructure issues.
A separate survey of AFGC members conducted in February revealed an average increase of 49 per cent in freight costs due to infrastructure-related challenges.
The industry is adapting where it can, with all survey respondents leveraging technology to navigate persistent supply chain disruptions.
The survey results also confirmed that COVID-19 pandemic-related disruptions were still impacting the flow of goods.
Government initiatives, like 2023’s National Disaster Preparedness Summit, have also enabled successful collaboration across the supply chain, using past experiences with floods, bushfires, and the COVID pandemic for future planning.
Despite some uncertainty, there has been positive changes in the sector since the pandemic, such as a renewed focus on decarbonisation and emerging technologies.
These changes have also played a key role in bringing forward the 2024 strategy review by a year, to 2023.
And now, a year on, the AFGC is calling for the strategy recommendations to be implemented.
Coupled with this, the AFGC is also calling on the Federal Government to include the largest manufacturing sector in its Future Made in Australia policy following the release of its annual industry snapshot for 2022/23.