By Sal Milici, general manager – trade policy & operations, Freight & Trade Alliance
The last few years have underscored the vulnerabilities of global supply chains. Once considered robust and reliable, they were exposed as fragile systems susceptible to disruption.
Covid-19 was the first major shockwave, sending ripples across industries as manufacturing hubs shut down, ports clogged with backlog and businesses scrambled to secure goods. If that wasn’t enough, geopolitical tensions and regional conflicts continue to pressure supply networks, reinforcing the need for resilience.
Today, supply chains remain under strain. The ongoing war in Ukraine has led to fuel price volatility, sanctions and disruptions in raw material flows. Meanwhile, conflict in Gaza and Houthi attacks on Red Sea shipping lanes have forced vessels to take longer routes, driving up freight costs and transit times. The subsequent congestion in Singapore – a vital transhipment hub – further exacerbated delays.
Closer to home, industrial action at Australian ports, as seen with the prolonged dispute at DP World in late 2023, demonstrates how domestic labour disputes can also grind trade to a halt.
Adding to the challenge is the issue of port congestion at key Australian gateways, particularly on the east coast. Since the pandemic, schedule integrity has remained a persistent issue, with vessel arrivals frequently delayed, impacting supply chain predictability. Furthermore, the rising terminal access charges levied by east coast stevedores have introduced significant additional costs for importers and exporters. These charges continue to climb, increasing the overall landside logistics burden and making cost-effective solutions more crucial than ever.
As terminal access charges grow, landside costs become an increasingly dominant component of total international freight expenses, compelling businesses to explore alternative logistics strategies.
Alternative solutions
Freight forwarders and cargo owners have long sought ways to insulate themselves from these disruptions and escalating costs.
While air freight offers an alternative, it comes with significantly higher expenses, making it impractical for many industries. Coastal shipping is another option, but it remains hampered by domestic regulatory complexities, limited capacity, and the same congested port infrastructure that afflicts international sea freight.
What is needed is a viable alternative that enhances both speed and reliability while mitigating exposure to bottlenecks and cost escalations.
Given these challenges, the imperative for resilient supply chain strategies has never been greater. Businesses cannot afford to rely solely on traditional routes and methods. Agility, diversification and contingency planning are now central to mitigating risks. In this landscape, innovative solutions are emerging to provide alternatives to the traditional shipping pathways – one such development being the Singapore-Darwin-Australian rail corridor.
The land-bridge
A pioneering initiative between Aurizon and ANL has brought to life a land-bridge solution that offers businesses an alternative trade route, reducing exposure to maritime disruptions. This service enables cargo to move from Singapore to Darwin before being transported via Aurizon’s rail network to Adelaide, with potential connections to other key Australian ports.
This model not only delivers significant transit time savings but also acts as a strategic insurance policy against unexpected disruptions.
The beauty of this approach lies in its flexibility. Should congestion worsen in South East Asian transhipment hubs or should further geopolitical disruptions occur, this alternative route ensures the continuity of supply chains. Additionally, this model helps mitigate exposure to the escalating terminal access charges imposed by east coast ports.
What is needed is a viable alternative that enhances both speed and reliability while mitigating exposure to bottlenecks and cost escalations.
By bypassing heavily congested terminals, businesses can avoid mounting landside costs while maintaining efficient transit times.
Conversely, this model is equally beneficial for Australian exporters. In the face of shipping constraints, it provides a reliable means of maintaining access to international markets, securing Australia’s economic interests. Whether it’s agricultural products, manufactured goods or raw materials, having a dependable alternative ensures that Australian businesses remain competitive in global trade.
Beyond its immediate operational benefits, this land-bridge concept highlights the broader shift needed in Australian logistics. Investment in multimodal transport solutions – integrating sea, rail, and road networks – can enhance supply chain resilience while reducing reliance on any single transport mode. By doing so, industry stakeholders can future proof their operations against both foreseeable and unforeseen disruptions.
A fundamental rethinking
Resilience in supply chains requires more than just operational tweaks; it demands a fundamental rethinking of logistics strategies.
Businesses must proactively assess vulnerabilities and build redundancy into their networks. This means diversifying freight routes, securing alternative suppliers and investing in infrastructure that enhances connectivity. It also necessitates stronger collaboration between industry players and government policymakers to ensure that regulatory frameworks support, rather than hinder, innovative supply chain solutions.
The lesson from recent history is clear: disruptions will happen. The difference between success and failure lies in preparation. By embracing innovative solutions like the Singapore-Darwin-Australian rail corridor, industry can safeguard against future shocks, ensuring the movement of goods remains uninterrupted regardless of global challenges.
In an era where supply chain resilience is no longer a luxury but a necessity, strategic partnerships and alternative pathways are key to staying ahead of the curve.
