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					         Michael Sutton’s Speech to APEC First Workshop
                  Oakes on Collin’s, Melbourne
                       9.00am, 5 April 2011

Australia’s Project ‘Compendium of Best Practices and Benefits of National
Logistics Associations in Selected APEC Economies’ - First Workshop


1.   I would like to thank the organisers for inviting me here to address this, the
     first of the three planned workshops of the APEC logistics project.

2.   It is a pleasure to be invited to address you at this forum; I welcome
     delegates to Australia and to Melbourne.

3.   Some of the characteristics which make Australia such an amazing country
     also necessitate the need for our freight transport to be efficient and

4.   As an island nation we rely on shipping for our imports and exports.
     Australia has 71 ports.

5.   Australia has a small highly urbanised population. In fact, 87 per cent of
     our population currently lives in our major cities and other urban areas.

6.   Our cities are separated by vast distances. For example, the most direct
     route from Perth to Sydney, by road, is over 3,900 km. This is the
     equivalent of travelling from Singapore to Kuala Lumpur ten and a half
     times or from Bangkok to Beijing.

                         Department of Infrastructure and Transport
7.    The Australian transport and logistics industry - defined broadly - is the
      lifeblood of our nation’s economic well-being, generating up to 14.5% of
      Australia’s Gross Domestic Product and providing more than one million
      jobs across 165,000 companies.


8.    The Australian Government recognises that there are fundamental
      challenges facing the transport and logistics sector and that the task ahead
      for policy makers and industry will be complex. Governments are
      responsible for the road and rail networks and container ports. The private
      sector is responsible for operating the trucks, ships and freight rail
      corridors. Having good partnerships between government and industry is
      essential to address the national challenges ahead.

9.    Despite the global financial crisis, Australia is a growing economy with a
      population that is expected to grow from 22 million today to 35 million by
      2030. Most of this growth will occur in the major cities – especially
      Sydney, Melbourne and Brisbane.

10.   Key challenges include:
         (a) urban congestion, bottle necks and limited land for port expansion;
         (b) reducing costs and red tape;
         (c) securing sufficient skilled workers;
         (d) improving efficiency and safety outcomes;
         (e) how best to invest limited resources; and
         (f) encouraging the uptake of new technologies.

11.   All these challenges will be intensified by the anticipated doubling of
      Australia’s freight task by 2030.

12.   Efficient and effective Government action is required to address these
      challenges. The Government has a multifaceted approach to doing this,

      which includes big investment, strategic planning and regulatory reforms.
      These constitute the key themes of the Government’s land transport

13.   There is a fourth theme - technology – through intelligent transport systems
      and smart infrastructure – that plays an increasingly critical role as an
      enabler in driving progress across all of the other themes.

14.   On the Government’s side, the Australian Government is investing a
      record $37 billion over six years to 2013-14 on capacity building projects
      to modernise and maintain the nation’s road, rail and port infrastructure.

15.   Strategic Government planning in relation to transport and logistics
      includes the development a National Freight Strategy. Additionally, A
      National Urban Policy and a Sustainable Population Strategy will be
      released later this year. Furthermore, State Government’s are currently
      developing strategic city plans for all major Australian cities.

16.   The Australian Government’s reform agenda includes the development of
      single national regulators for rail safety, maritime safety and heavy
      vehicles. Historically these sectors have been managed by each state. This
      has led to inconsistencies and unnecessary red tape, especially for freight
      companies that operate in multiple states. Single national regulators mean
      that one regulatory body and a single set of laws will prevail nationally.
      Put simply, this will cut red tape and increase productivity.

17.   There is an increasing recognition that technology needs to play a critical
      role in bringing investment, planning and regulatory reforms together.
      Singapore is recognised as a city where ITS has made possible integrated
      service delivery that is improving transport outcomes for all Singaporeans.
      We are in the process of developing a policy framework for ITS and smart
      infrastructure is a term that is gaining increasing prominence.

18.   This multifaceted approach to addressing the key transport challenges
      facing policy makers requires all levels of Government and industry to
      work cooperatively together.


19.   Australia is a federation of federal, six states and two territory
      governments. The third tier of government is local government.

20.   To be frank, that complicates things for us quite a lot.

21.   Transport is primarily the responsibility of state and territory level
      governments, while international shipping and aviation is the responsibility
      of the federal government – also called ‘the Commonwealth’ or Australian

22.   I and a lot of my colleagues spend much of our time working with the
      states to try and get improved national outcomes. That isn’t being critical
      of the states – indeed, there is usually a lot of goodwill in our discussions –
      it is just a reflection of the complications caused by a federal system.

23.   We need to work very hard at getting genuine national approaches, and for
      this purpose there are regular meetings of our transport ministers and
      Premiers to drive reform processes.

24.   It is critical to understand the benefits that can be derived from reforms, to
      overcome the natural tendency to leave things as they are – ‘If it ain’t
      broke, don’t fix it’.

25.   I would suggest that having a strong analytical capacity in the bureaucracy
      – together with what we call ‘gatekeeper’ processes to ensure that only
      rigorously thought-through proposals for regulation – are absolutely

      essential to ensuring that Government is a help, not a hindrance, to the
      transport and logistics sector.

26.   Having a transport and logistics sector that is a strong advocate - through
      bodies like National Logistics Associations – for reform helps a lot.

Industry and government relations

27.   As stated in my introductory paragraphs the Australian transport and
      logistics industry comprises 165,000 companies. The carriage of goods
      and services is primarily handled by them, and Governments must be in
      partnership with industry to achieve national transport outcomes and
      address the challenges. As advisers to Government, we see our job to
      ensure that our private sector can do its stuff in as competitive, fair and
      efficient a manner as possible. Our regulatory frameworks are needed to
      ensure this happens, but we must also take care to ensure that we do not
      stifle innovation that can drive better performance and lower costs for
      Australian industries.

28.   Our economy is driven by the private sector, but there are some things that
      Government can usefully do to help business along. Ensuring there is a
      transparent two-way interface between government and industry has
      proven to be beneficial for everyone. I am going to focus on four industry
      bodies that help define that interface and which could be useful models in
      your economies:

      - the Australian Logistics Council
      - state based freight councils
      - the Transport and Logistics Industry Skills Council; and
      - Transport and Logistics Workforce Advisory Groups.

Australian Logistics Council

29.   The Australian Logistics Council began in September 2002 as a partnership
      between the Australian Transport and Logistics supply chain and the
      Government. I won’t say much on this as Michael Kilgariff will provide
      this information in his speech.

30.   Initially the Australian Government provided funding and secretariat
      support and that may be a useful model. However, since 2009 the Council
      has operated as an independent company, funded by industry.

31.   The Australian Logistics Council and the Australian Government share the
      vision of an efficient and effective Transport and Logistics sector. Their
      relationship is mutually beneficial.

Freight Councils

32.   Freight Councils operate within most States of Australia. These Councils
      are jointly funded by Australian and State Governments with support from
      the Australian Logistics Industry. They provide a unique, industry driven
      forum bringing together all players within Australia's freight logistics

33.   A key role of the Freight Councils is to identify and address constraints
      and impediments to the efficient operation of supply chains and Australia's
      Transport and Logistics industry generally.

34.   Freight Councils add value to industry and governments by facilitating the
      exchange of information and raising industry awareness of government
      initiatives and regulations. They are also well placed at the operational
      level to conduct specific research projects involving small and medium
      enterprises and freight forwarders in regional areas.

Transport and Logistics Industry Skills Council

35.   The Transport and Logistics Skills Council is a specialised organisation
      that advises government on national industry skill requirements, and
      provides advice to industry around national workforce planning initiatives,
      training package development and the national vocational education
      training system.

36.   The Skills Council receives funding from the Australian Government,
      through the Department of Education, Employment and Workplace
      Relations, as well as from other Government projects, non Government
      projects and through industry sponsorship.

37.   Adequately skilled workers are a fundamental necessity to a successful
      transport and logistics industry. Like the Skills Council, the Australian
      Government is concerned about the shrinking number of qualified people
      in this field, the aging workforce, attraction and retention issues and the
      additional workforce that will be required as the freight industry grows.

38.   Each year the Skills Council produces an environmental scan. The scan
      provides contemporary and projected advice on the condition of the
      transport and logistics sector, their workforce planning and, in particular,
      their projected reliance on the national training system in the next 12

39.   Government and Industry use the findings of the environmental scan to
      guide research work, planning and discussions.

Transport and Logistics Workforce Advisory Groups

40.   Transport and Logistics Workforce Advisory Groups are state/territory
      based groups which provide a mechanism for industry communication,
      consultation and collaboration to assist with identifying and addressing
      industry workforce priorities at the state level.

41.   The groups draw together government agencies, industry and union
      representatives from all modes and sectors of the transport and logistics
      industry from within each state.

42.   In October 2010, this Department organised the National Transport and
      Logistics Workforce Forum. This Forum was attended by the Advisory
      Groups. It strengthened networks and facilitated information sharing
      between the state based Groups and with the Australian Government.


43.   To summarise, the Australian Government recognises that the challenges
      facing the transport and logistics sector are complex. The Government is
      increasing investment and undertaking strategic planning and regulatory
      reform to address these challenges.

44.   The continued prosperity and productivity of the Australian transport and
      logistics industry is dependent on maintaining, and indeed strengthening,
      the relationships between all levels of government and between
      government and industry.

45.   The role of industry partnerships with Government is vital to the success of
      Australia’s market economy, and I am very pleased that we are able to
      share our experience and lessons with you.

46.   We don’t pretend that everything that works here will work for you, but
      hopefully there may be some lessons for you.

47.   Thank you.


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