Supply Chain Council of European Union |

Supply chain bosses disappointed by government’s bet on rail and road

“The interesting point I’d make there is, toll roads actually force the transfer of freight from road to rail. Only when a truck goes on a toll road does it pay its true capital cost for the road and the true maintenance cost.

“For instance, to get a truck from Port Botany to Western Sydney is $120 in toll, that’s what they have to pay for the building of the road, the maintenance of the infrastructure and the management of it. A truck pays about $60 to go to Melbourne so who is paying the other part of that? No doubt the taxpayer and the ratepayers are.”

Mr Dalla Valle argued government cannot “invest in rail at the same time as continuing to allow longer, larger trucks on road”, suggesting it is counter-intuitive to building new roads to make transport more efficient for cars.

Re-thinking just-in-time supply chain

Mr James said COVID-19 has also demonstrated the restrictions of the just-in-time supply chain.

“What’s happened is importers in particular are balancing now between just in time supply chains and inventory and inventory management and needing inventory to satisfy customer needs, combine that with online retailing, combine that with the movement to ordering online and very fast delivery to home, the supply chains to our homes are going to change dramatically,” he said.

And for transportation and logistics company Toll, closed borders created difficulties, with truck drivers waiting at borders for hours and drivers struggling to get into rest areas, managing director Thomas Knudsen said.

“It’s not worked as well as we could have hoped for, I think the different rules and regulations between the states have not been helpful for us to be frank.”

COVID-19 had highlighted “previously unknown” limitations of supply chains, he said. “One of the areas that I think we have to rethink is very much the just-in-time supply chain.”

Post pandemic, companies had to diversify and stop relying too much on any one single manufacturer or any single country, he said. “The need for flexibility has increased dramatically”

The boom in online shopping was also driving demand for better “end-to-end visibility” and more agile supply chains, including automation, he said.

Qube Holdings managing director Maurice James has warned of importers reliance on China Renee Nowytarger / AFR

Qube’s Mr James also warned of the risk of supply chain’s dependence on single countries.

“What we’re going to see in supply chains, partially linked to COVID and partially linked to the geopolitical situation between the US and China, is we’re going to see some movement of manufacturing out of China to different locations, so supply chains will change,” he said. “The dependence on China is a risk for some importers in particular so maybe multi source rather than just from China, other countries or relocating manufacturing from China may change supply chains.”

Industrial action exacerbates COVID-19 delays

Industrial action carried out by the Maritime Union of Australia (MUA) at port operations around the country further exacerbated delays caused by the COVID-19 pandemic with all terminal operators entering enterprise agreement negotiations at a similar time.

Mr James, speaking on behalf of Patrick Terminals of which Qube owns 50 per cent, said while it was “part of normal protected industrial action related to enterprise bargain…you’d have to ask the union why they did it all at similar times in a COVID environment”.

“It did have an impact, we’ve seen delays around the country,” he told the Summit. “My experience previously is those enterprise agreements with the operators occur at different times and the action occurs at different times.

“There’s an arrangement that vessels that do get affected by industrial action get serviced at different terminals in a port, that didn’t happen this time. The union made a point of not cooperating with that, that exacerbated the impact, particularly in Port Botany.”

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