“Pretty poor record”: Former Aus Post boss highlights supply chain issues affecting trade

Boosting trade and investment with Southeast Asia has been a key topic of conversation at the ASEAN special summit, but some members of the logistics community have questioned whether Australia’s supply chains can accommodate the 2040 investment plan.

Global Express CEO and former Australia Post boss Christine Holgate said Australia was overdue for a transport infrastructure upgrade.

“Our country is extremely unsophisticated in its understanding of this incredibly important part of our economy,” she said.

“We have some big issues in terms of infrastructure, lack of connectivity — it’s a good idea if all the infrastructure joins up … we also need a core workforce.

“I’d say we’ve got a pretty poor record, and I think we really need to think about how we’re doing things and maybe bring a really good bit of Southeast Asian knowhow into Australia to help.”

Discussions about an inland rail link from Brisbane to Melbourne have been part of the Australian policy landscape for decades, but successive governments found the business case didn’t warrant the cost of such a large infrastructure project.

Despite this, the previous government committed to building a 1,600km inland rail link as part of a coalition deal to keep net zero on the agenda.

The resulting project has become one of Australia’s great white elephants: over budget and well behind schedule.

Kerry Schott’s review said the project costs had doubled to $31 billion and the timeline blown out to 2031 in just two years between 2020 and 2022. Nonetheless, the current government has committed to continuing the rail line.

Promoters of inland rail — including Schott — say this is not just about macroeconomics. The localised economic and wellbeing benefits of inland rail to key agricultural communities on the route could barely be overstated.

A more mature technology than electric heavy-road vehicles, it is likely rail will need to take a larger role in Australia’s logistics networks in the future.

As with other forms of investment, diversity is a strength, and the addition of more rail to existing freight networks could act as a hedge against the natural disasters the CSIRO thinks could threaten Australia’s supply chains.

CEO of Linfox Peter Fox said rail freight in Australia was comically inefficient.

“Not only do we need an inland rail, but it’d be handy if we had common gauges across our rail lines as well. That’s the joy of having a Scottish and an English engineer define it for us back in the 1800s.”

Holgate agreed, using the example of COVID-19 supply chain blockages to illustrate the need for diverse and resilient logistics networks.

“Before COVID, supply chains, freight and logistics were the hidden enablers,” she said.

“Then we had this extraordinary period where the hidden enabler was suddenly centre, front of stage. Every news channel, every day we heard about supply chains, freight and logistics … then the crisis ended and we all went back to normal.

“It’s what we’re calling ‘COVID amnesia’. Now we’re in a situation where I think Australia doesn’t understand the complexity of the systems.”

Like many of Australia’s more intractable problems, the ability to create resilient supply chains is tied to Australia’s broader socio-political context. Holgate pointed to skills shortages in the industry that would be tough to fill with domestic workers because of the lack of domestic skills pipelines.

The historical solution of attracting migrant workers is no longer as effective as it once was due to Australia’s high cost of living, difficult-to-navigate visa system, and lack of affordable housing.

Fox said Australia’s administrative infrastructure was also creating friction in supply chains because of a simple lack of digitisation.

He said governments across the region — including Australia — would not be able to take full advantage of AI and automation until they moved on from the idea of manual paperwork as a necessary part of public administration.

“From a digitisation point of view, unless you remove your manual processes of doing things and take information off personal computers and put it into one complete network, the whole concept of digitisation has a long way to be played out,” he said.

“The whole benefit of artificial intelligence that’s coming at us, that will allow enormous advantage, will not be captured.”

This article was first published by The Mandarin.