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FREIGHT LOGISTICS in AUSTRALIA an AGENDA for ACTION May 2002

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FREIGHT LOGISTICS in AUSTRALIA an AGENDA for ACTION May 2002 FREIGHT LOGISTICS IN AUSTRALIA AN AGENDA FOR ACTION May 2002 Prepared for the freight logistics industry by the Industry Steering Committee of the Freight Transport Logistics Industry Action Agenda Endorsed by the freight logistics industry and its stakeholders on 26 March 2002 VERSO LETTER OF TRANSMITTAL FREIGHT TRANSPORT LOGISTICS INDUSTRY ACTION AGENDA INDUSTRY STEERING COMMITTEE The Hon. John Anderson MP Minister for Transport and Regional Services Parliament House CANBERRA ACT 2600 Dear Minister On behalf of the Industry Steering Committee for the Freight Transport Logistics Industry Action Agenda, I have pleasure in presenting you with our final report. The Action Agenda process provided the freight logistics industry and the users of its services with an invaluable opportunity to examine the factors most critical to the industry’s future. It enabled the industry to be pro-active in proposing a comprehensive suite of actions to improve the competitiveness of one of the most influential parts of the economy, and establish a new basis for effective relationships across the industry and with governments. Developing the Action Agenda involved wide consultation with industry representatives (both providers and users of logistics services), governments at all levels, stakeholders such as education providers and professional experts in the field of logistics. The circulation of a Consultation Draft of this report in October 2001, and a further draft for the Industry Leaders Roundtable in March this year, resulted in further inputs which are reflected in this report. To prepare the Action Agenda, a substantial commitment was required from Steering Committee members, the secretariat provided by your Department and the many other participants from industry, the education and training sector, and governments. As Chair of the Steering Committee, I record my thanks for these significant contributions. Yours sincerely John Bowdler Chair, Industry Steering Committee 30 May 2002 INDUSTRY STEERING COMMITTEE CHAIR John Bowdler Director, John Bowdler and Associates Pty Ltd MEMBERS Julian Barson Managing Director, Australian Personnel Solutions Tony Boll Chief Executive South Pacific, Danzas AEI Tony Bonett National Transport Manager, Nestlé Keith Campbell Executive Manager, Logistics Association of Australia Geoff Christopherson Director Higher Education, School of Marketing, Royal Melbourne Institute of Technology Robert Coode Administration Manager Export & Industrial Sales, Murray Goulburn Cooperative Co Ltd Greg Gibbins Director, FCL Interstate Transport Jeff Hastings Managing Director, Xylem International Pty Ltd Brian Jeffriess President, Tuna Boat Owners Association Charles McLaughlin National Transport Manager, Woolworths Ltd Neil Matthews Director, Strategic Design + Development Troy May Chairman, Importers Association of Australia Stephen Morris Executive Director, Customs Brokers & Forwarders Council of Australia Inc Tom Pinder Operations Manager, Perkins Shipping Llew Russell Chairman, Sea Freight Council of New South Wales Greg Smith General Manager Operations, Port of Brisbane Corporation Andrew Stewart Director, Publishing Services Australia John Strang Chairman, Strang International Pty Ltd Andrew Young Group Manager Logistics, Sinclair Knight Merz CONTENTS LETTER OF TRANSMITTAL........................................................................................................ v INDUSTRY STEERING COMMITTEE........................................................................................ vi STATEMENT OF INDUSTRY COMMITMENT ......................................................................... ix EXECUTIVE SUMMARY.............................................................................................................. x RECOMMENDED ACTIONS ..................................................................................................... xvi 1 INTRODUCTION ............................................................................................................... 1 1.1 THE ACTION AGENDA RATIONALE ............................................................... 1 1.2 THE DEVELOPMENT OF THIS ACTION AGENDA......................................... 1 1.3 WHAT THIS ACTION AGENDA SEEKS TO DO............................................... 3 1.3.1 Objectives................................................................................................... 3 1.3.2 Structure of the report ................................................................................ 3 2 THE FREIGHT LOGISTICS INDUSTRY ......................................................................... 5 2.1 DEFINING FREIGHT LOGISTICS....................................................................... 5 2.1.1 Logistics management................................................................................ 5 2.1.2 Supply chain management ......................................................................... 6 2.1.3 Logistics chain management ...................................................................... 6 2.2 LOGISTICS ACTIVITIES ..................................................................................... 7 2.3 FREIGHT LOGISTICS AS AN INDUSTRY....................................................... 10 2.3.1 The outsourcing trend............................................................................... 10 2.3.2 The development of the industry.............................................................. 12 2.3.3 The industry and the profession ............................................................... 16 2.4 CHALLENGES FOR THE FREIGHT LOGISTICS INDUSTRY....................... 17 2.4.1 Industry culture ........................................................................................ 17 2.4.2 Freight logistics infrastructure ................................................................. 17 2.4.3 Recruiting and developing people............................................................ 18 2.4.4 Demonstrating environmental awareness................................................. 18 2.4.5 Freight security and integrity ................................................................... 18 3 THE FREIGHT LOGISTICS TASK................................................................................. 20 3.1 CURRENT AND PROSPECTIVE DEMAND..................................................... 20 3.1.1 An example of a logistics challenge—the sea container task .................. 21 3.2 THE FUTURE FOR FREIGHT LOGISTICS SERVICES................................... 22 3.2.1 Air freight services................................................................................... 22 3.2.2 Rail freight services.................................................................................. 23 3.2.3 Road freight services................................................................................ 24 3.2.4 Shipping freight services.......................................................................... 24 3.2.5 Non-transport logistics services ............................................................... 26 3.3 FREIGHT LOGISTICS PERFORMANCE IN AUSTRALIA ............................. 27 3.3.1 Benefits of improved performance........................................................... 27 3.4 THE PERFORMANCE OF IN-HOUSE LOGISTICS SERVICES ..................... 28 3.5 THE LACK OF INDUSTRY DATA.................................................................... 30 3.5.1 Australian Bureau of Statistics data ......................................................... 31 3.5.2 The need for better data............................................................................ 31 4 BOOSTING INDUSTRY PERFORMANCE ................................................................... 33 4.1 BEST PRACTICE AND BENCHMARKING...................................................... 33 4.1.1 What is best practice in freight logistics?................................................. 33 4.1.2 The importance of best logistics practice................................................. 33 v 4.2 ACHIEVING BEST PRACTICE LOGISTICS .................................................... 33 4.2.1 Moving towards best practice .................................................................. 34 4.2.2 Adopting the right strategy....................................................................... 36 4.2.3 Performance monitoring and benchmarking ............................................ 36 4.3 QUALITY ASSURANCE STANDARDS (QAS)................................................ 38 4.4 INNOVATION, RESEARCH AND DEVELOPMENT....................................... 40 4.4.1 Industry practice....................................................................................... 40 4.4.2 Dissemination of innovation .................................................................... 41 4.4.3 Financing innovation................................................................................ 41 4.4.4 Stimulating innovation ............................................................................. 42 4.5 e-LOGISTICS ....................................................................................................... 43 4.5.1 Taking the opportunities........................................................................... 43 4.5.2 Intelligent transport systems (ITS)........................................................... 46 4.5.3 Connectivity of systems ........................................................................... 48 4.6 WORKPLACE
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