Australian logistics, the road ahead

Attributed to Geoffroy Henry, CEO and Founder, Ofload

Supply chains have been vital to Australia getting through the COVID-19 pandemic; however, they have been disrupted in many ways, both large and small.

Essential medical supplies, food and other necessities were available throughout the various lockdowns and border closures due to the strength of Australian supply chains. Leaders in the industry have been forced to adapt to changes in the environment to keep the country running, with technology playing a key role.

Despite the robust Australian logistics industry, the COVID-19 pandemic was not something that anyone had planned for. The supply chain disruptions caused by lockdowns and virus infections amongst key personnel combined to create a crisis that eclipsed anything most supply chain leaders had seen before. The unprecedented times challenged operators to adapt at a pace like never before.

Potholes ahead and behind

The pandemic is not a short-term crisis, and it will have long-lasting implications for how people work and how supply chains function. Businesses need to build long-term resilience in their value chains for managing future challenges.

A range of factors made the lockdowns more challenging for every supply chain step. The most obvious of these was the number of infected people within the supply chain, causing unexpected delays as deliveries that were confirmed could be disrupted without notice. The Australian logistics industry has been challenged by a shrinking driver pool for years. With health issues further impacting the availability of drivers, supply chains were stretched to their limits.

Finally, the rail system connecting east and west has been down, shifting long haul freight into trucks that would normally be moving products within a single state. This resulted in a decrease in the availability of already scarce trucks, as a single train needs many trucks to carry the load.

International speedbumps

It became the perfect storm, challenged further by international supply chain disruptions that have impacted the industry’s ability to operate. Shortages of diesel additives and replacement tyres have resulted in trucks being unable to run as normal. Our supply of the seemingly simplest resource of wooden pallets, used to load every product in Australia onto a truck at some point, have reached critically low levels. Without pallets, trucks cannot be efficiently loaded so goods cannot be transported.

Disruptions in international shipping have seen many products move to air freight, a more expensive option that is only made worse by the increasing fuel cost.

With almost every step of the logistics journey more expensive, consumers have felt the sting with increased prices. Not only this, but a lack of available trucks resulted in farmers and producers throwing out stock for lack of available transport despite the being food shortages in some parts of the country.

Technology to upend every aspect of the supply chain

Business as usual is over for the industry. Australia has built a robust supply chain network, however the methods that have driven success in the past are no longer viable. Instead, operators need to be embracing new technologies that can provide real-time insights and solutions. By shifting towards a more agile approach to logistics planning, companies can quickly manage last-minute changes and adapt to challenges more smoothly.

A digital brokerage enables carriers and shippers to connect in real time to pick up loads that would otherwise be stranded, in one centralised solution.

Ironically, it is the largest players in the industry that need to make this change the most, as larger shippers have been impacted disproportionately when COVID-19 swept through their team. Adopting agile practices enables these shippers to redirect loads to available carriers without the need to change their operations on the fly.

The road ahead

The Australian logistics industry has long since carried the country’s economy on its flatbeds. The challenges it faces will impact every person living in Australia, and they are not expected to be resolved for at least another three years.

With this in mind the industry needs to be prepared to face these potholes and speedbumps. Technology has created the industry and gotten us through the pandemic, it is only by embracing new technologies that we can plan our route to future success.