Making Tracks

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-By John Boley

It is just coming up to ten years since the formation of the Australian Logistics Council (ALC). Michael Kilgariff, Chief Executive and Managing Director, told Business in Focus the council represents the major and national companies participating in the Australian freight transport and logistics supply chain.

Its mission is “to influence national transport and infrastructure regulation and policy to ensure Australia has safe, secure, efficient, sustainable and internationally competitive supply chains. Council members and associate members are major companies, associations, government agencies and organisations participating in the Australian freight transport and logistics supply chain.”

Originally ALC was formed as a group to represent those players in the logistics industry “who did not regard themselves specifically as road or rail operators but as logistics providers,” Michael explained. It was formed as a body to advise and lobby government in the areas of major logistics challenges facing Australia such as national regulation and national infrastructure. “It’s been through a few changes over the years and probably at one stage even moved away from that objective, but has gone back to representing the major players in the Australian freight and logistics industry. Its purpose is to lobby and influence government on behalf of members on major regulation infrastructure issues.”

The ALC came about as an initiative from government rather than the industry, which nonetheless welcomed it. “It was formed by John Anderson when he was the deputy Prime Minister and Minister for Transport, because he wanted to be able to talk to an organisation that could speak on behalf of the larger operators. In more recent years the major operators took the view that this was an organisation they wanted to support and now it’s fully industry-funded.”

Michael took up his position in mid-2009, his background being in government relations and industry associations. “My previous role to this was working with energy networks and the relevance of that is that energy, like transport, is moving from state-based regulation and state infrastructure to a focus on nationally consistent regulation and national infrastructure. It’s about building [networks] in New South Wales that actually have a benefit in Queensland too.”

Current full ALC members are Qantas Freight, Linfox, Coles, Toll, Startrack Express, Woolworths, Brookfield Rail, QR National, Asciano and the Australian Rail track Corporation. Companies of this stature (including the 30-odd associate members) have business plans that – of course – require them to make money but also require that they move goods and people around the nation effectively. So they need some certainty that certain infrastructure will be provided in the longer term that will enable the most efficient movement of freight.

Michael’s view is that ALC has already contributed substantially towards that goal. “By January 2013 we should have a national heavy vehicle regulator, a national rail safety regulator and a national marine safety regulator. We haven’t got there yet, there are all sorts of things that could happen, but that’s quite a significant achievement.

“Our desire for infrastructure in Australia is that they [the regulators] become almost like a ‘productivity commission’ for the infrastructure industry and that they apply quite rigorous cost benefit analysis against government spending decisions that really measures what the impact on the national economy will be. So governments will always spend money on projects but if there is a rigorous cost benefit analysis policy in place it’s more likely to have a greater economic benefit as a whole.”

Current full ALC members are Qantas Freight, Linfox, Coles, Toll, Startrack Express, Woolworths, Brookfield Rail, QR National, Asciano and the Australian Rail track Corporation. Companies of this stature (as well as the 32 associate members) have business plans that – of course – require them to make money, but also require that they move goods and people around the nation efficiently. So they need some certainty that certain infrastructure is going to be provided in the longer term that will enable the most efficient movement of freight.

Michael’s view is that ALC has already contributed substantially towards that goal. “By January 2013 we should have a national heavy vehicle regulator, a national rail safety regulator and a national marine safety regulator. We haven’t got there yet, there are all sorts of things that could happen, but that’s quite a significant achievement.

“Our desire for infrastructure in Australia is that they [the regulators] become almost like a ‘productivity commission’ for the infrastructure industry and that they apply quite rigorous cost benefit analysis against government spending decisions that really measure what the impact on the national economy will be. So governments will always spend money on projects but if there is a rigorous cost benefit analysis policy in place it’s more likely to have a greater economic benefit as a whole.”

But surely more regulation means more layers of administration and bureaucracy? “That’s a very good question. We have been at pains – and this is where ALC has done a lot of work behind the scenes – to make sure that in fact what we’re not getting is ‘just another regulator’.” There are currently approximately 23 regulators looking after rail, heavy vehicles and marine. “We need to reduce them to three regulators. The productivity commission has estimated there will be about a thirty billion dollar benefit if we can do that. We’ve been quite focused on making sure that we’re not just creating another layer of regulation – it has been our constant mantra with state and commonwealth governments in everything they do, to ensure that we get national consistency of regulation, not another layer of regulation.”

There has been a suggestion that the ALC is just a ‘big boys’ club’ that carves up the business between them, but Michael rejects this. “Every board meeting is preceded by a statement on competition by the ACCC and we take that very seriously. We don’t discuss issues that may have a bearing on prices or competition, we discuss issues to do with regulation and infrastructure that all companies [large or small] ultimately will be the beneficiaries of. It looks like that when you look at our membership; we even say it in our mission statement, that we are an organisation that represents the major and national companies in the freight transport and logistics sectors. But that doesn’t necessarily mean that what we’re advocating is somehow ‘anti’ the smaller freight forwarders.”

Infrastructure, after all, benefits everybody in the industry and the customer at the end of the day as well. “It’s about delivering supply chain efficiencies so consumers are not paying exorbitant prices for their products. If at the end of the day the benefits aren’t flying through to the consumers then somehow the whole thing is not quite right.”

There are some self-evident issues that face the industry and challenge ALC as its advocate – perhaps the most obvious of them being carbon footprints and taxation thereof. However, Michael selects a surprise issue as the one he would put top of the list in terms of importance.

“We believe that the development of the national heavy vehicle regulator is probably one of the most important issues that this government or any government has dealt with in the logistics industry. It might be the most significant development and – dare I prophesise to say – success, although it isn’t over yet, since the development of the common rail gauge. To me that’s the benchmark. In fact we would probably say the development of the single national heavy vehicle regulator is on par with the common rail gauge. It’s not sexy, and probably a lot of people out there don’t even know we’re labouring behind the scenes on all of these laws, but that’s the significance that we attach to it. If you asked Paul Little (Toll Logistics’ representative on the council) how important he thought it was, I guarantee that’s how he would picture it.”

Getting a cohesive transcontinental system remains a priority. “The development of the national freight strategy by Infrastructure Australia should be released in June. We would certainly consider that to be, from an infrastructure perspective, one of the most important things that this government is working on. We need to look at the freight industry as one national market, not seven or eight markets that every now and then are linked. We need a national freight strategy, rather than just state-by-state strategies, all of which may or may not have common objectives. We are looking forward to making sure that it reflects our concerns from both a regulation point of view and also an infrastructure point of view.”

One other important issue is that under the national heavy vehicle regulator “for the first time we will have a national approach to chain of responsibility. This is probably one of the big issues that is emerging. Every business in Australia is part of the supply chain in some way, and as part of the chain of responsibility, every employer or business not only has a responsibility for safety for their employees but also for what happens in the supply chain elsewhere. As part of that we’re developing something called the national logistic safety code which is a risk-based code to assist people to deal with their chain of responsibility obligations.” This too is not sexy, Michael concedes, but it is “going to be an issue that will probably escalate in terms of public awareness. Everybody in the industry knows about chain of responsibility, but not many people outside are aware of the changes that are taking place.”

The issue is imposing obligations on people that they may not necessarily want or even think about at this time. “But under the national law there will be a national approach to chain of responsibility and people will be prosecuted.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

June 19, 2018, 10:45 AM AEST