The Iran conflict and ensuing global fuel crisis has once again shone a spotlight on the critical importance of both developing and maintaining secure and resilient supply chains.
Largely overlooked by the public, Australia’s vast network of rail, road, sea, and air supply chains are the foundation blocks of our island trading nation’s economic prosperity and national sovereignty.
Prior to the latest crisis, the COVID-19 pandemic exposed the criticality of supply chains and essential freight workers, but understandably most people outside of the sector are unaware of the sheer size, scale and complexity of daily freight movements and interactions.
As a case in point, according to the Bureau of Infrastructure and Transport Research Economics (BITRE), approximately 447 billion tonne kilometres of freight was hauled by rail alone in Australia in 2024-25. These freight operations were conducted on 31,000 kilometres of rail track networks.
In a post-pandemic world dealing with heightened geopolitical tensions and conflicts, domestic and global energy transitions and shocks – and associated inflationary pressures – major economies like China and the United States are investing heavily in freight-related infrastructure, technology and operations to enhance the structural stability and robustness of their supply chains.
China’s latest five‑year plan points to approximately US$3–5 trillion being allocated to transport and supply‑chain networks and systems. Over the next five years across all levels of government, the USA is likely to invest roughly US$1–1.5 trillion in freight‑related infrastructure.
Supply chains which suffer from bottlenecks, pinch points, poorly maintained and degraded infrastructure, obsolete technology, and a lack of government and private sector investment encounter delays and higher costs which throw fuel on the fire of the cost-of-living crisis.
Fragmented and fragile supply chains directly contribute to Australian households paying more at the supermarket checkout and dent the competitiveness of exporters like farmers, manufacturers, and miners operating in cut-throat global markets.
Missing a scheduled delivery window at a port to load commodities onto a chartered cargo vessel destined for an overseas market can cost a regional exporter tens of thousands of dollars in demurrage charges.
Primary producers are already paying historic prices for fuel and fertiliser without also having to fork out extra money to offset the cost of substandard freight networks and operations. Budget blow outs occur on big construction and home builds when the flow of supplies of cement, steel, masonry, timber or glass are jammed up due to disrupted logistics.
Time is money, and when the supply chain is slow and clunky, we all pay a price as consumers. When you click online to order an imported household item, there can be more than a dozen steps across both global and domestic supply chains to deliver that product to your front door.
The movement of many goods and products also involves every mode of freight transport and logistics – from cargo vessels and port stevedoring operations, to planes, trains, and trucks, to intermodal terminals, warehouses and distribution centres, to domestic white vans, to the postie bike servicing your street. For your family or business to receive a product intact and on-time, each link in the supply chain must mesh.
Inefficient freight movements also have an adverse impact on the community and environment by contributing to increased transport and traffic congestion and associated higher operating emissions.
Strong supply chains also play a crucial strategic role in protecting the self-sufficiently and therefore sovereignty of a nation, not to mention helping to maintain social cohesion. Who will ever forget the scenes of people fighting over toilet paper in supermarkets?
More broadly speaking, for a middle maritime power like Australia dependent on sea trade and commerce with our Indo-Pacific neighbours and allies, efficient domestic freight and logistics networks and operations are crucial to help bind together a rules-based order in our region.
The economic and social stakes are high.
Australia’s freight and logistics sector supports approximately 1.2 million jobs in total and generates more than $160 billion each year, representing about eight per cent of national GDP.
There are also massive benefits of a resource rich exporting country like Australia enhancing the productivity of its supply chains. This includes freight networks acting as the foundation to our nation becoming a global powerhouse in the production of critical energy transition minerals like copper. With a battery electric vehicle requiring about 70 to 80 kilograms of copper, and some estimates indicating global annual sales of 30 million EV units by 2030, the opportunity for our country is enormous.
Importantly, significant foundation blocks have been laid to further improve interstate rail freight networks and operations.
The Australian Government’s $2.8 billion Network Investment Program to boost upgrades to the ARTC’s 9,600-kilometre national rail network and the $400 million private investment by the Intermodal Terminal Company to develop the country’s largest intermodal facility in Melbourne are two recent examples of major long-term capital commitments in the sector.
The ongoing collaboration between federal, state and territory infrastructure and transport ministers to enhance the interoperability (harmonisation) of digital train control technology is another smart and timely initiative to improve the future safety, efficiency and productivity of both passenger and freight rail operations and services.
Someone with a deep understanding and appreciation of the foundation blocks of freight, including the role of rail as a keystone, was Australia’s 24th Prime Minister Paul Keating.
In a speech celebrating the launch of the so-called “One Nation Train” in 1995 – the first service to operate on the standard gauge ‘rail highway’ between Brisbane and Perth – he said:
“We devised One Nation to get Australia moving. One element of that was to make the railways run more smoothly. But the commitment also required that we improve air, sea and road transport, and dovetail them all together.”
Truer words have never been spoken.
Andrew Huckel is a Partner at advisory firm Ideia Partners.
