Retail growth is stalling

Figures published in the latest edition of the quarterly CHEP Retail Index, which uses transactional data from CHEP pallet movements to provide an indicator of Australian Bureau of Statistics retail trade data, have signalled minimal retail sales growth in Q2 2018.
The modest growth in pallet movements in the first few months of 2018 suggests that retailers expect the trading environment to be soft over the next few months. Retail sales growth has been moderate in the past three months, with solid growth in February following a weak result for December 2017. Yet, in annual terms, retail sales growth has been improving since a low point around September last year.
Looking ahead, the economic environment supports some further modest improvement in retail sales growth in 2018, with recent strong employment growth and a likely pickup in wage growth flowing through to higher consumer spending.
Key figures

  • 2.6% year-on-year retail turnover growth of $26b to the month of March 2018, with year-on-year figures for the month of May static at 2% consistently.
  • On a quarterly basis, 2.6% year-on-year growth for the March quarter and moving to 2.3% year-on-year for the June 2018 quarter.

Providing commentary on the index, partner at Deloitte Access Economics David Rumbens noted: “Retail sales growth remains modest, with consumers experiencing little wages growth, and confidence remaining fragile. However, a particularly weak patch for retail sales in the second half of 2017 appears to be behind us, and the stunning growth in employment that we continue to witness should lend some support to retail spending in the near term.”
 

How to build manufacturing resilience

Australia is currently home to one of the most volatile manufacturing industries in the world. Opportunities for companies to protect themselves against these economic ups and downs is the topic of the Commonwealth-supported Advanced Manufacturing Growth Centre’s most recent report, Building Resilience in Australian Manufacturing.
Resilient firms are defined as those that outperform their industry in a downturn, with higher earnings than average companies. This report identifies three strategies for building resilience and how manufacturing leaders can use these approaches for continuing success.
“The AMGC’s Sector Competitiveness Plan identified ways to drive competitiveness for Australian manufacturers, but there was an ingredient we found that needed to explain long-term performance, namely resilience,” said AMGC’s managing director Dr Jens Goennemann.
“Instead of seeing parts of Australia’s manufacturing base being wiped out in the next downturn, let’s rather learn how some of our manufacturers adapted and survived in such times of contraction.”
From 1996 to 2015, the period examined by the report’s researchers, and even without a recession, the manufacturing sector expanded to above and below 20 per cent of its trend size. This 20 per cent deviation compares to 14 per cent in the UK, 10 per cent in the US, and 8 per cent in Germany.
For one in three Australian manufacturing businesses, the loss of one customer would have a moderate to significant impact on their business. For one in 10 manufacturers, the loss of one customer would force their business to shut down.
Building Resilience in Australian Manufacturing outlines what drives resilience, with 70 per cent of resilient manufacturers exhibiting technical leadership, 64 per cent producing a diverse product range, and 54 per cent having business models that allowed for high flexibility.
The characteristics of resilient manufacturers in this context are highlighted through the report’s case studies. One manufacturer, Sutton Tools, benchmarked itself against the world’s best and decided to bolster its technical leadership through a dogged commitment to research and development.
“We stuck at it, not only for the pride of getting that product to successfully work, but more importantly what it did for all our other products and our manufacturing processes,” explains managing director Peter Sutton on its demanding but rewarding decade-long R&D project.
The report outlines three business factors driving resilience:

  • Superiority: superior firms possess an unassailable competitive advantage by offering technically superior products or services that are unique within the market, and highly valued irrespective of accompanying conditions.
  • Diversity: diversified firms possess a competitive advantage across many product segments, service offerings or geographically diverse export markets. This enables them to respond to shifting consumer tastes or reduced overall demand.
  • Flexibility: flexible firms possess an agile business structure allowing them to manage fluctuations in input costs or change industry focus in the event of a downturn.

The full report can be downloaded here.
 

Global logistics spending expected to reach $10.6 trillion by 2020

Recent research revealed by Frost & Sullivan finds that global logistics spending is expected to reach $10.6 trillion in 2020, with transportation accounting for the majority at 70%.
Emerging technologies such as cloud computing, big data, and crowd sourcing, coupled with an influx of tech-savvy start-ups, are revolutionising the space of urban logistics.
About two fifths of the overall logistics costs are associated with the last mile that are forcing providers to come up with newer innovative solutions to deliver packages within cities.
The research predicts the logistics market will rapidly move toward mobile freight brokerage-type, on-demand deliveries and autonomous technology, such as the use of drones and delivery bots which are set to solve the last mile delivery challenge by being more cost-effective to end users with lesser regulatory mandates.
“Spiralling last-mile delivery costs and changing customer demands are causing retailers to rethink their strategies and look toward new business models such as click-and-collect, locker boxes, on-demand and autonomous solutions,” said Vijay Narayanan Natarajan, Visionary Innovation Senior Research Analyst at Frost & Sullivan. “Moreover, the influx of start-ups in logistics has enabled innovative solutions that not only provide value-creation customized solutions for the consumer, but also tackle the inefficiencies currently witnessed.”
Further trends and developments driving growth include:

  • Digital freight brokering platforms reducing empty miles by 8% to 10%;
  • Shift toward low-emission and zero-emission solutions, such as use of low-carbon vehicles or bicycles;
  • Fleet operators expanding their strategies by developing urban distribution centers for effective logistics management; and
  • Retailers focusing on compact stores to reduce capital expenditure and bring products closer to a growing urban customer base.

The up-and-down world of retail

Business analysts at IBISWorld have revealed the 2017 list of Australia’s Top 1,000 companies, providing a comprehensive and thorough insight into the corporate landscape in Australia, including the largest firms, growing and declining sectors, and new businesses to watch in 2018 and beyond.
“The firms on IBISWorld’s 2017 Top 1,000 list account for $1.94 trillion in revenue, or approximately 28% of all trade in Australia,” IBISWorld senior industry analyst Jason Aravanis said. “Approximately one-third of companies on the list reported lower revenue for the year, with total revenue for the list declining by 2.0% since IBISWorld’s 2016 Top 1000 companies list.”
Although total revenue across the 2017 list has fallen, this loss has been concentrated amongst a small number of large firms. Notable companies that generated lower revenue include Westpac, Rio Tinto, ANZ, NAB, and Caltex Australia.
In contrast, JB Hi-Fi, BHP, CIMIC Group and other major companies expanded revenue over the year. Overall, the 2017 top 1,000 companies’ performance was mixed. For example, 52% of companies on the 2017 list improved profitability.
Top 10 Company Performers:

2017 Rank 2016 Rank Company (Balance date) Total Revenue ($m)
1 1 Wesfarmers (6/17) 68,732
2 2 Woolworths (6/17) 55,921
3 3 Commonwealth Bank of Australia (6/17) 44,949
4 8 BHP (6/17) 39,164
5 4 Westpac Banking Corporation (9/17) 37,518
6 6 Rio Tinto (12/16) 35,132
7 7 ANZ Banking Group (9/17) 34,221
8 5 NAB (9/17) 32,245
9 9 Telstra (6/17) 28,345
10 10 NSW Health (6/17) 21,296

 
Five newcomers
New entrants in the 2017 Top 1,000 came from a variety of industries. Scentre Group generated significant revenue through the sale of its Westfield shopping centre in New Zealand. Lion expanded its revenue after acquiring New Zealand craft brewing company, Brew Strong Limited. Fulton Hogan created two separate joint ventures with Seymour Whyte and Laing O’Rourke Australia, ramping up its revenue base. Ingham’s generated greater revenue due to rising poultry consumption. WesTrac secured additional construction contracts, delivering strong revenue growth. New entrants and their revenue include the following:

Rank Company (Balance Date) Total Revenue ($m) Main Activity
60 Scentre Group (12/17) 5,536 Real Estate Services
76 Lion Pty (9/16) 4,902 Beverage manufacturing
94 Fulton Hogan Limited (6/17) 3,648 Construction
148 Inghams Group Limited (6/17)
 
2,438 Poultry Processing
171 WesTrac Pty Ltd (6/17) 2,218 Construction

 
Top performing industries
Superannuation funds in Australia
The superannuation funds industry was one of the fastest growing industries in 2016-17. Revenue in this industry is made up of the investment income of various funds, which are highly exposed to equity markets, interest rates and property yields. The All Ordinaries index, which comprises the 500 largest companies listed on the Australian Securities Exchange, appreciated strongly in 2016-17. This has contributed to greater revenue amongst several superannuation funds in the Top 1000, including AustralianSuper, Q Super, and the Commonwealth Bank.
Mining in Australia
The mining sector posted significant growth in 2016-17, as rising output volumes and higher commodity prices boosted revenue. Curtailment of Chinese commodity production since 2016 has benefited Australian mineral producers, as lower supply has led to higher global prices. As a result, BHP Billiton increased revenue and returned to profitability in 2016-17, after posting a massive loss in 2015-16.
“BHP Billiton’s recovery has been driven by strong performances in the Oil and Gas Extraction, Black Coal Mining, and Iron Ore Mining industries. Rio Tinto posted lower revenue over the year through December 2016, but recent results have shown a strong recovery over the year through December 2017,” said Mr Aravanis.
Electricity retailing
Revenue across the electricity supply chain increased sharply in 2016-17, as higher purchase costs were passed on to customers.
Rising gas costs, the closure of power stations, and uncertainty regarding investment in replacement power plants has led to a significant increase in wholesale electricity prices in eastern and southern Australia. Electricity retailers such as Origin and AGL increased revenue in 2016-17 due to this trend. EnergyAustralia posted lower revenue over the year through December 2016 due to the shutdown of aging power stations, but generated greater revenue over the year through December 2017 due to higher power prices.
Petroleum product wholesaling
The petroleum product wholesaling industry posted a strong recovery in 2016-17, as the world price of crude oil surged. The increased crude oil price fed through to higher local wholesale and pump retail prices for petroleum and diesel. The industry is dominated by four major players, Caltex, Viva, BP Australia and ExxonMobil. Revenue declined for all of these companies over the year through December 2016. However, these players are expected to post a significant turnaround over the year through December 2017.
Weaker performers
Consumer goods retailing
The growing trend towards bargain hunting has negatively affected the consumer goods retailing industry. Consumers have become more informed about purchases and the value of the products they buy. The industry’s revenue declined in 2016-17, as lower household discretionary income led to a cutback in household expenditure.
“Despite the overall decline in industry revenue, the industry’s major players, Wesfarmers and Woolworths, were able to grow their revenue as consumers sought out cheap prices at these large establishments. These large firms have been able to succeed in a difficult operating environment due to their economies of scale, which have enabled them to gain market share from smaller competitors,” said Mr Aravanis.
Telecommunications services
The telecommunications services industry posted lower revenue in 2016-17, as intensifying price competition among wireless telecommunications service providers and declining revenue from fixed-line businesses hindered the industry’s performance. Both Singtel Optus and Vodafone posted significant revenue declines due to lower equipment sales (as customers increasingly shift towards SIM-only plans), and strong price competition from the mobile telecommunications resellers market. Telstra’s retail segment has also been affected by these trends. However, Telstra’s overall revenue increased in 2016-17 due to rising revenue from leasing infrastructure to NBN Co.
IBISWorld’s Top 1,000 company listing was compiled using IBISWorld’s Company Database, covering the Top 2,000 companies in Australia.

TPP agreement reborn, without US

The Trans-Pacific Partnership (TPP), a major trade deal that has been almost a decade in the making, has been reborn as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Eleven of the original countries involved in the TPP negotiations are set to sign the agreement in Chile in March – Japan, Canada, Australia, Mexico, Malaysia, Singapore, Chile, Peru, Vietnam, New Zealand and Brunei.
The notable exception to the new agreement is the US, which pulled out of the agreement after Donald Trump’s election as President.
“This is a multibillion-dollar win for Australian jobs,” Prime Minister, Malcolm Turnbull and Minister for Trade, Tourism & Investment, Steven Ciobo said in a joint statement. “Australian workers, businesses, farmers and consumers will benefit.
“The Government took a leadership role and worked hard to deliver the TPP because it will generate more Australian exports and create new Australian jobs.”
“The TPP will eliminate more than 98 per cent of tariffs in a trade zone with a combined GDP of $13.7 trillion. The agreement will deliver 18 new free trade agreements between the TPP parties. For Australia, that means new trade agreements with Canada and Mexico, and greater market access to Japan, Chile, Singapore, Malaysia, Vietnam and Brunei.”
Significant wins for Australian exporters under the deal include:

  • accelerated reductions in Japan’s import tariffs on beef, where Australian exports were worth $2 billion in 2015–16 – under TPP-11, even better access;
  • elimination of a range of cheese tariffs into Japan, covering more than $100 million of trade not covered by the Japan-Australia Economic Partnership Agreement;
  • new quotas for wheat and rice to Japan, and for sugar into Japan, Canada and Mexico;
  • elimination of all tariffs on sheep meat, cotton, wool, seafood, horticulture, wine and industrial products (manufactured goods);
  • eleven separate deals – legally enforceable market access to all these countries; and
  • investment meaning strong, legally enforceable commitments on the way countries regulate foreign investment.

Manufacturers set for growth

Confidence in the manufacturing sector is at its highest level since June 2003 with the sector investing for growth on the back of healthy profits and sales, according to the illion (formerly Dun and Bradstreet) Business Expectations Survey.
The latest analysis reveals business confidence across all sectors rose 13.7 percent compared to the prior corresponding period, primarily driven by expectations for profits, sales and employment. The Business Expectations index is now at its highest level since late 2015.

illion Economic adviser Stephen Koukoulas said the broad nature of the result bodes well for the economy in the near term. “Manufacturing firms that were able to withstand the global financial crisis and the Australian dollar above parity are now in a healthy financial position, buoyed by a stronger global economy and a lower Australian dollar.”
illion CEO Simon Bligh said capital investment is crucial for sustained economic growth. “Capital investment planning is showing signs of growth, which is crucial for sustained momentum.”
“The Manufacturing and Construction sectors appear to be in particularly good spirits as we start the year, which is another positive sign of the underlying strength of the economy.”
The illion Business Expectations Survey full report for Q1 2018 is available here.
 

Business profit expectations highest in seven years

Business profit expectations for 2018 are the highest they’ve been since 2011, with companies set to boost employee numbers in the first quarter on the back of the positive outlook, according to illion’s (formerly Dun and Bradstreet) latest Business Expectations Survey.
Data from the survey indicated businesses operating in the Finance, Insurance and Real estate sector had the highest profit expectations approaching the new year, followed by the Transport, Communications and Utilities sector.
The survey shows that overall, the Business Expectations Index is up 25.7 percent on the same period last year and the actual performance of businesses across all sectors is at a 13 year high.

Stephen Koukoulas, illion economic adviser, said there were a number of factors driving the positive outlook for 2018. “Corporate profits are getting a boost from lower costs, which are being driven by record low interest rates and on-going low wages growth – which is all occurring at a time of solid gains in the ASX.
“In terms of the inflation outlook, the still very well contained level of expected selling prices suggests price pressures are low. This is consistent with the persistently low inflation rate that has been evident in recent years. It also fits with the benign inflation outlook recently forecast by the Reserve Bank and is consistent with official interest rates remaining low until well into 2018 and perhaps beyond,” he said.
illion CEO Simon Bligh said the profit outlook indicated the underlying foundation of Australia’s corporate landscape remains strong. “The data shows that businesses across a variety of industries are set to close out the year on a confident note,” he said.
“This bodes well for the beginning of 2018, which, judging by the latest Business Expectations results, is set to be an active year for business growth.”
 

Air freight continues on its way up

The International Air Transport Association (IATA) has released data for global air freight markets showing that demand, measured in freight tonne kilometres (FTK), rose 5.9% in October 2017 compared to the year-earlier period. This was a slowdown from the 9.2% annual growth recorded in September 2017 but still exceeded the average annual growth rate of 3.2% over the past decade.
Freight capacity, measured in available freight tonne kilometres (AFTK), rose by 3.7% year-on-year in October. This was the 15th consecutive month in which demand growth outstripped capacity growth, which is positive for load factors, yields, and financial performance.
While cargo demand remains strong, several indicators show that we may have passed the growth peak. The inventory-to-sales ratio in the US is tracking sideways, indicating that the period when companies look to restock inventories quickly — which often gives air cargo a boost — has ended. The new export orders component of the global Purchasing Managers’ Index (PMI) is stable. And the upward trend in seasonally-adjusted freight volumes has moderated.

Freight volumes are still expected to grow in 2018, although at a slower pace than in 2017.
“Demand for air freight grew by 5.9% in October.  And tightening supply conditions in the fourth quarter should see the air cargo industry deliver its strongest operational and financial performance since the post-global financial crisis rebound in 2010,” said Alexandre de Juniac, IATA’s director general and CEO.
Regional performance
Airlines in all regions reported an increase in total year-on-year demand in October. However, in contrast, international freight growth slowed in all regions except Africa.
Asia-Pacific airlines saw freight volumes increase by 4.4% and capacity expanded by 3.9% in October 2017, compared to the same period last year. Demand for freight is now around 3% higher than the peak reached in the post-financial crisis rebound in 2010. The region’s manufacturers continue to enjoy buoyant order books. And the major exporters in China and Japan are reporting growing backlogs supported in part by stronger economic activity in Europe.
North American carriers posted an increase in freight volumes of 6.6% for October. This was a slowdown from the 7.4% recorded in September but still ahead of the five-year average pace of growth. Capacity increased 3.8%. The strength of the US economy and the US dollar has boosted the inbound freight market in recent years. Data from the US Census Bureau shows an 11.6% year-on-year increase in air imports to the US in the first nine months of 2017, compared to a slower rise in export orders of 6.5%.
European airlines posted a 6.4% increase in freight demand in October 2017. This was a marked slowdown from the 10.6% growth in demand in September, however it was still above the five year average of 4.9%. Capacity increased 2.5%. Concerns that the recent strengthening of the euro might have affected the region’s exporters have not materialized yet. Europe’s manufacturers’ export orders are growing at their fastest pace in more than seven years. Freight demand remains very healthy on transatlantic routes and is strong on routes to and from Asia – having received a boost in trade from the economic stimulus measures put in place by China.
Middle Eastern carriers’ year-on-year freight volumes increased 4.6% in October and capacity increased 3.4%. During the same period international freight volumes slowed to 4.7% from 9.2% the previous month. The recent volatility produced by the region in the year-on-year growth rate for international freight volumes is due to developments in demand in 2016 rather than a marked change in the current traffic trend. In fact, seasonally-adjusted international freight volumes have continued to trend upwards at a rate of 8-10% over the past six months.
Latin American airlines experienced a growth in demand of 7.2% in October and a capacity increase of 4.4% compared to the same period in 2016. International freight volumes rose by 7.7% over the same period. This is nearly nine times the five-year average rate of 0.9%. The pick-up in demand reflects signs of recovery in the region’s largest economy, Brazil. Seasonally-adjusted international freight volumes are now back to the levels seen at the end of 2014.
African carriers posted the largest year-on-year increase in demand of all regions in October, with freight volumes rising 30.3%. Capacity increased 9.2%. During the same period international freight volumes grew by 28.5%. This is more than three times the five-year average growth pace of 9.4%. Demand has been boosted by very strong growth on the trade lane to and from Asia, which increased by more than 67% in the first nine months of the year.

ARA unveils report heralding benefit of rail

At the AusRAIL PLUS 2017, held this week in Brisbane, Australasian Railway Association (ARA) CEO Danny Broad launched the Value of Rail Report, a report prepared by Deloitte Access Economics.
“It is my absolute pleasure today to launch the Value of Rail Report, which highlights the contribution of rail to Australia,” said Danny Broad, CEO, ARA.
“We know that Australia’s population increases at a rate of 370,000 people every year. By 2060, both Sydney and Melbourne will have grown by approximately three million people each.”
He noted that improved transport solutions will be needed to deal with congestion experienced as Australia’s population increases.
“To manage these challenges, Australia will have to develop its multimodal transport solutions with light and heavy rail as its spine to provide the solutions that Australia needs in shaping our cities and our regions into the future.
“The story with growth in freight traffic is even greater – a potential 88 per cent increase in kilometres travelled by 2050, and an increase of some 2.5 million trucks and light commercial vehicles on our roads,” he added.
“This growth in freight underscores the need for an efficient supply chain and for a heavy vehicle pricing framework that accurately captures the cost of road infrastructure provision and the negative externalities of road usage, such as congestion, vehicle emission and accidents – a point which is reinforced in the report.”
He added that rail makes a significant contribution to the Australian economy, injecting around $26 billion into the national economy, contributing 1.6 per cent of GDP and acting as a key enabler of exports.
“We create over 140,000 jobs in our cities and our regions, provide safe, efficient, environmentally and socially beneficial modes of transport,” he said.
“We ask governments to get on board and implement our National Rail Industry Plan to provide the rail industry and the broader Australian community with long-term certainty of improved transport solutions for the benefit of all.”

We can't delay the hard decisions

This article first appeared in the August/September issue of Logistics & Materials Handling.
By Michael Kilgariff, Managing Director, Australian Logistics Council.
In the lead-up to the 2016 Federal Election, the Australian Logistics Council (ALC) urged the development of a comprehensive National Freight and Supply Chain Strategy to address these challenges.
The Federal Government subsequently agreed to undertake the development of such a strategy during the Prime Minister’s Annual Infrastructure Statement to the Parliament in November 2016.
Throughout the months of 2017, the ALC has been working closely with its members, supply-chain participants and other interested parties to catalogue the unique challenges faced by the transport and logistics sector, and to craft recommendations for appropriate policy responses from the Government.
The ALC believes the development of a National Freight and Supply Chain Strategy presents an ideal opportunity to establish a high-level framework that will facilitate the safe and efficient operation of Australia’s supply chains, which will:

  • provide an integrated and efficient freight transport and supply chain network for Australia’s international and domestic supply chains;
  • to the fullest extent possible, ensure that policy settings and regulation are competitively neutral between the different freight transport modes;
  • allow freight operators to innovate and increase the productivity of the freight logistics services they provide, in order to improve outcomes for consumers, Australia’s industries and the wider economy; and
  • contribute to continuous improvement in the safety of all freight logistics operations, as well as improved societal and environmental outcomes.

In early August, the ALC released Freight Doesn’t Vote – its final submission to the Inquiry Into National Freight and Supply Chain Priorities. This comprehensive document sets out a pathway that will equip the nation’s supply chains to deal with the economic needs of the future.
The reality is that Australia’s economy is being transformed by population growth, by technological change and by the changing behaviour of ever-more-discerning and empowered consumers. Like all other industries, the freight logistics sector must adapt to an economy in transformation.
Moreover, given the exponential growth of the middle class throughout Asia, and thus the importance of exports to Australia’s continuing economic performance, becoming a world leader in supply-chain efficiency and safety is not merely desirable, but essential.
The lived experience of Australian society over recent decades points to increasing levels of urbanisation. Effectively, this means we are trying to do more in a limited physical space.
In particular, resurgence in the desirability of inner-city living coupled with rapid rates of population growth present some urgent challenges for our freight logistics industry.
The essential items that most Australians take for granted in everyday life – food to eat, household appliances, clothing, medications and vehicles to name just a handful – are generally not grown or manufactured close to the places where most of us live.
These commodities must be transported from their point of origin to the retailers from which we purchase them, or otherwise delivered directly to our doorsteps from ports, freight depots or warehouses.
Yet, as we create more populous cities, it is fast becoming apparent that our existing planning regimes and approaches to development fail to adequately prioritise the movement of freight.
The congested state of many major freeways and key arterial roads – as well as traffic gridlock within cities themselves – is a constant source of annoyance for many Australians. However, more than simply being an irritation, these problems are symptomatic of a far deeper issue.
Capacity constraints in the road network are not only a problem for motorists – they also impose significant costs on the freight logistics industry.
The disruption to the supply chain that occurs because of road congestion as well as capacity issues afflicting ports, airports and rail freight facilities all have an impact on the cost of moving freight – and ultimately, the prices paid for goods by Australian consumers.
Australia’s supply chains do not stop at state borders. Our economy is national – and accordingly a nationally consistent approach to infrastructure and the regulation of freight movement is required.
In an ideal world, a national economy should be managed by the national government. This includes the responsibility for the development of the infrastructure and regulatory settings necessary for the nation’s supply chains to operate safely and efficiently.
In many circumstances, the Australian Government has encouraged the development of individual pieces of infrastructure through financing. However, many of the decisions relating to the planning and delivery of such projects are made by state and/or local governments.
This is the reality of Australia’s federal structure. Like all other industries, the freight logistics sector must work within the restraints imposed upon it by the Australian Constitution.
The unfortunate by-product of this constitutional reality can often be duplication and delay in achieving the sort of policy reform that industry – and the entire economy – badly needs.
Freight Doesn’t Vote makes a total of 41 specific policy recommendations, dealing with challenges faced by all modes of freight transport, as well as the inefficiencies that are acting to curb growth, and regulations that fail to adequately account for a changing economic environment.
Unless freight movement is given far greater consideration when planning decisions are made, business and consumer expectations about rapid and efficient delivery of goods will be difficult to meet in the future.
This is particularly true of CBD freight delivery, where competition for road space between passenger and commercial vehicles is already adding to business costs and consumer prices.
Continuing investment in infrastructure that permits deliveries from freight distribution centres to CBDs is critical if we are going to successfully meet our increasing freight task.
Some form of freight-only infrastructure should be considered by governments to improve freight delivery and decrease congestion and emissions in high-demand environments.
This may include the establishment of urban consolidation centres for freight delivery, as well as the adoption of ‘reverse curfews’, which would provide freight vehicles with the right of access to parts of the road at non-peak times, in order to improve efficiency of deliveries.
In its submission, the ALC contends that this is one area where the Federal Government can play a leadership role, by incentivising the incorporation of such measures in urban planning systems, and commissioning a formal review of practices such as curfews that inhibit efficient CBD freight delivery.
Freight Doesn’t Vote also urges the Federal Government to prioritise greater use of technology enhance the efficiency and safety of our freight networks.
This includes assisting small and medium providers with the adoption of global data standards to enhance supply-chain visibility, and moving towards the mandatory use of telematics in heavy vehicles as a means of improving driver safety and establishing a fairer, more effective model for road pricing.
Blunt instruments such as fuel excise charges and registration fees are no longer raising sufficient revenue to support the road network of a 21st-century economy.
As such, it is imperative that we move to a fairer, more efficient road pricing and investment model, under which users pay according to where and when they travel.
Technological enhancements, such as GPS tracking, now make it easier than ever to monitor vehicle use.
It is time to use these technologies as the basis of a fairer, more responsive approach to road pricing which delivers investment where it is most needed – not where it is most politically expedient.
This measure will undoubtedly produce its fair share of controversy.
In its submission, the ALC recommends that in order to manage that, it will be important to have a respected, independent umpire in charge of making pricing decisions. The ALC suggests that the Australian Competition and Consumer Commission (ACCC) is the most appropriate body.
To ensure its effectiveness as an independent economic regulator for the transport sector, it may be prudent for the ACCC to appoint a specialist Commissioner to deal with transport and logistics issues.
Further, the ACCC should establish a specialist unit to identify regulatory issues in the transport sector, working closely with industry stakeholders and state and local governments to ensure a pricing approach that delivers the right investment outcomes.
Freight Doesn’t Vote does not shy away from recommending initiatives that may prove to be politically challenging in the short term – particularly when it comes to having greater Commonwealth involvement in planning, as well as road pricing and investment reform.
The political challenges associated with pursuing difficult reforms now, however, will be as nothing compared with the political and economic pain that will be the lot of future governments if we fail to get the policy settings right today.

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