Supply chain report calls for government help

The Freight and Logistics Council of NSW (FALCONSW) has released the long awaited report into "Innovation in the NSW Freight Logistics Industry".

This first phase of work outlines a series of actions that could be taken by (the NSW) government to stimulate innovation and efficiency within the NSW Freight Logistics Industry in both the short and long term.

Beyond the conventional barriers to innovation that affect all organisationssuch as cost, market related issues and skill shortages, the report has found a range of factors that act as particular barriers to innovation within the NSW freight logistics industry.

These were grouped into a three major categories:

– Limited ‘co-opetition’– fragmented and complex supply chains, and unsophisticated end users can often act as a barrier to improving efficiency (e.g. small transport operators and retailers that have basic business processes).

– Limited interfacing – transport operations are often seen as providing a competitive advantage which can prevent firms in different markets working together (e.g., combining transport operations/resources to reduce costs).

– Significant number of transactions along chain, limited utilisation of technology and availability of relevant data can also be an issue.

– Domination of incumbent organisations – high barriers to entry for new players and long term contractual arrangements (e.g. in the provision of infrastructure) can also prevent innovation.

The report found that "three particular supply chains within the NSW, export coal, domestic grocery and export grain supply chains, demonstrated innovative approaches to overcoming these barriers. Other chains appear to be lagging in their efforts to take advantage of the drive for innovation within their chain primarily due to a larger number of barriers present. Consequently these chains are unable to leverage cooperation or clustering into effective solutions."

The authors call for an agenda to be developed for actions that can be taken by government to help increase innovation in this vital sector. They recommend that the following actions be considered as early priorities:

– Gather improved and additional data on the NSW freight logisticsindustryIn particular developing a strategic vision and agenda for next steps and taking steps to establish a freight database for Sydney.

– Focus on integrated infrastructure planningProgressing AusLink projects.

–  IPART recommendations for Port Botany and addressing issues surrounding Sydney Airport.

– Help industry make more informed decisions.

– Development of toolkits, case studies and reviews of new products and technologies to encourage greater take up of industry best practice.

– Establish benchmarking programs for the sectorDevelop indicators and programs to benchmark the sector against other jurisdictions and industries to gauge the relative success of any actions.

The report is available on the FALCONSW website (formerly Air Freight COuncil of NSW) at www.airfreightnsw.com.au under ‘Council Projects’, Innovation Report.

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