The value and contribution in terms of jobs, outputs and pure exports of regional businesses and industries to our nation’s economic recovery has never been more important.
As Australia quickly shifts focus to regaining our momentum, empowering these sectors, and supporting them with efficient, safe and reliable freight and logistics services becomes paramount.
It’s well documented that almost two-thirds of Australia’s $475bn worth of exports emanates from our regions. In a pre-Covid world agriculture, resources, manufacturing, and tourism did the heavy lifting with education also gaining prominence.
In the future, the mix of economic drivers, the size of their contribution, and where they come from within our borders may indeed change, and the entry of new industries should not be discounted. But the base demand for services such as freight and logistics that have profound impacts on productivity and can be a competitive advantage, will only increase.
A prime example of the impending surge in demand in NSW alone is reflected in the Audit Office of NSW October report into rail freight and Greater Sydney which says 288 million tonnes of freight volume is predicted to pass through Greater Sydney in 2036. That is a staggering 48 per cent increase on the 194 million tonnes from 2016. It’s worth noting, too, that two thirds of all freight in NSW moves through Greater Sydney.
At a higher level the volumes and values the agriculture sector produces, and in turn the support it needs now and into the future, is on the up. Agri exporters remain prominent players as the sector continues its National Farmers Federation-led pursuit of becoming a $100bn industry by 2030. Fuelled by surging global demand for Australian produce, the Australian Bureau of Agriculture and Resource Economics and Sciences (ABARES) is forecasting agri exports will reach $54.7bn in 2021-22.
“Figures and projections such as these have LINX Cargo Care Group excited for the future and are continuing to invest in key road, rail, port and sustainable forestry assets that better connect our regional customers to the domestic market and global opportunities.”
Looking at the plantation forestry logistics industry, a key sector within our own LINX Cargo Care Group stable, we’re also seeing the beginnings of a recovery following last year’s trade bans and Covid-related global weakness. Domestic demand for softwood is surging from residential construction while innovation around engineered wood products, such as cross-laminated timber, highlights the potential of Australian wood products as attractive and sustainable alternatives to steel and cement. The global appetite for Australian hardwood chips for everything from packaging to paper is also continuing to rise.
Our resources sector is another that will require more support with the September 2021 edition of the Resources and Energy Quarterly flagging Australia’s resource and energy exports hit a record $349bn in 2021-22, up from $310bn in 2020-21. In terms of volumes, the Office of the Chief Economist’s (OCE) Resources and Energy Export Volumes Index increased by 6 per cent in the September quarter 2021 compared to the June quarter, and was 3 per cent higher than a year before. Furthermore, the OCE expects export volumes to grow over the next 18 months as key trading partners recover.
At the same time, the pandemic has brought about changes on the home front with ample anecdotal evidence of Australians making the move to the regions bringing their jobs, incomes, and skills, lifting local property prices and populations. This will simultaneously create more demand in these communities but could also facilitate even more growth coming out of our regions.
Figures and projections such as these have LINX Cargo Care Group excited for the future and are continuing to invest in key road, rail, port and sustainable forestry assets that better connect our regional customers to the domestic market and global opportunities.
The support for regional operators can’t stop at the physical infrastructure and services. To back businesses and help them achieve their goals, we must also continue to build a diverse workforce that is skilled, agile, and future focused.
As an employer of more than 1900 skilled freight and logistics specialists, many of whom live and work in regional Australia delivering for customers of all sizes, it’s a challenge we’re up for because we know our regions have a bright future and an important role to play.
We’re in it for the long haul.
This article first appeared in The Australian Newspaper’s 2021 Logistics report.