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It only takes events like the Suez Canal blockage or the COVID-19 pandemic to show that the worst can happen. Putting supply chain resilience in perspective, a poor-functioning supply chain (and henceforth less resilient) can see delays on imports and exports, increases in costs, and reduced fuel security, all potentially resulting in burdening Australian businesses and weakening the economy.
On the flip side, we have a strong-functioning supply chain and that sometimes goes unnoticed because of the standard we’ve become accustomed to as a result of its performance in modern times. We’ve become accustomed to quick delivery times and a strong Australian export market, and that’s good! We should enjoy those luxuries, but if we want them sustained, there are some challenges we must address.
Earlier this year, Ports Australia provided input to the Productivity Commission’s Vulnerable Supply Chains Interim Report. This article will look a little closer at the issues we think are most important to the Australian supply chain’s resilience.
Before anything else, I’d like to take the opportunity to acknowledge and thank the workers across our sector who often go unnoticed despite the criticality of what they do. From the peak body for ports around Australia, your service is appreciated, and we will continue to serve you as best we can.
Potential of coastal shipping
Diversity of transport modes and options will be essential for resilience and its necessity comes in many forms across the ports and supply chain industry. For many years, Ports Australia has loudly pushed the government to review the potential of coastal shipping.
Australia’s freight task is anticipated to increase by 25 per cent to 962 billion tonne-km between 2018 and 2040, which is a staggering number.
We importantly acknowledge that coastal shipping is not the sole answer to securing our supply chain for that increase, as we are not going to secure our supply chain by trying to score points for our own industry.
However, we do not want to see the potential of our Blue Highway overlooked with its undoubtable potential to unlock greater diversity in transport routes with more cost-effective and environmentally friendly outcomes.
The pandemic has lifted awareness of our reliance on shipping to maintain and provide for our nation. The time is right for a broader conversation on how we inoculate our country from the potential for future supply chain disruptions.
If resilience is what we want, we need to foster a holistic approach to planning which embraces diversity in shipping routes and lines that service our nation.
In Australia, we rely heavily on foreign flagged vessels for the bulk of our imports, exports, and coastal shipping. There are now only 15 major Australian-flagged vessels in operation.
If we’re to secure our supply chain, the government’s going to need to consider how we sustain our current model, which relies on international shipping lines, while better incentivising Australians to enter the ring, creating a more diverse landscape of transport modes.
Seafarers are essential workers
At any moment, there are 50,000 vessels and 1.2 million seafarers navigating the world’s waters, making four million port calls per year.
Needless to say, we are no longer resilient without seafarers. International trade has continued over the past 18 months but at what cost?
Hundreds of thousands of seafarers who bear the load of roughly 90 per cent of world trade have been stranded aboard ships throughout the pandemic because of the widespread inability for crew changeovers to occur or for shore leave to be granted.
All seafarers should be deemed as essential workers because that is what they are. What should that mean for them and for resolving this crisis?
This determination is a catalyst for stronger COVID-19 testing regimes, health standards, access to vaccines and crew-changeover regimes for seafarers worldwide, increasing their well-being and securing global trade.
It’s a necessity that should extend far beyond this pandemic and become common practice for the international industry.
Roadmap driven by technology
Technology and the innovation it offers will be integral to carrying our industry into the future. COVID-19 and the crew changeover crisis has highlighted the need for transparent, accessible data which shows the flow of our trade systems.
We’re encouraged by the Federal Government’s investment in a National Freight Data Hub and its rollout will be crucial. The Federal Government cannot allow state and territory jurisdictions to enforce their own protocols on top of what comes from the National Freight Data Hub.
We’ve seen this throughout the pandemic and it has created a myriad of problems for supply chain connectivity. We need strong leadership from the Federal Government developing this roadmap driven by technology and it must be agreed to by all sides of government and industry.
An aging industry presents challenges
The ports sector is host to some incredibly talented, highly skilled people. Every worker is essential to our supply chain, but there are some whose expertise is critical to operations. Pilots, harbour masters and tug masters, are just a few which without, some ports would simply be inoperable.
These roles require highly skilled and experienced professionals with a deep understanding of the port they service. Often, these workers have been in the industry for decades.
Unfortunately, the maritime industry is aging fast. If we do not find a holistic solution to Australia’s maritime skills challenge, this country will struggle to find the skilled personnel to operate its most vital trade and economic infrastructure in the future.
To ensure the sustainability of our current trade systems, those critical roles will need to be filled by young people coming up through the ranks.
Young people are being fostered through institutions like the Australian Maritime College and being welcomed into cadetships by Australian ports, but the challenge is keeping them here for the long haul.
Governments must set their sights on industry reforms designed at keeping these young people in Australia so they can learn the necessary skills to one day fill these critical roles.
Australia’s role as a trading nation
It’s important to remember that many of the challenges we face are flow-on effects of an international supply chain under pressure.
Ports Australia is on the journey of strengthening our ties with international partners like our newest international members across the South Pacific, or other peak bodies like the International Association of Ports & Harbors, or American Association of Port Authorities, to get a closer look at what is happening across the water from our island nation.
We should, and will, analyse these issues from an Australian perspective, but it’s vital that they’re also understood in the context of a complex global system.
The key challenges we’ve addressed with the government, and the ones other supply chain partners have raised, will not disappear with the end of the pandemic, or like the unblocking of the Suez Canal. Our current and future resilience relies on our ability to service the needs of our country’s international role as a trading nation.
Our ports continue to invest in the necessary infrastructure to meet the challenges of the changing freight transport environment. We have introduced best health practices at our facilities to minimize the risks to our people and the wider nation during a time of crisis, and continue to work with the Government seeking ongoing improvements to border and biosecurity protection.
As a maritime nation aware of its vulnerabilities and reliance on the international movement of goods and materials from all parts of the globe, we need a national conversation on our country’s resilience to deal with the challenges exposed during this ongoing pandemic. Failure to do so is simply not an option.
This article first appeared on infrastructuremagazine.com.au
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