SEVERAL new submissions to the Productivity Commission’s interim report on supply chain vulnerability have highlighted the fact that the maritime sector is largely absent in the report.
The inquiry into Australia’s supply chain vulnerabilities began in February. The commission released an interim report in March, calling for submissions. The report focused more on the sourcing of goods rather than logistics – particularly maritime logistics.
The Maritime Union
The Maritime Union of Australia said the commission’s approach did not address ships as critical pieces of infrastructure.
“We submit that no matter how diverse the sourcing and availability of a product, no matter how substitutable a product, no matter how long or short the supply chain is, if the timely availability of a suitable ship or ships (that are competitively priced) to transport the product to or from Australia is disrupted or withdrawn, then the supply of that product is also immediately disrupted,” the union’s submission reads.
“We say that ships are the overwhelming or critical vulnerability point that underpins all other supply chain vulnerabilities. Regrettably, in our view, the interim report has severely underestimated this vulnerability. Indeed it has largely ignored the role of ships. It is the elephant in the room and must be given far greater attention in the final report.”
The union put fourth four recommendations to the commission:
- That the Productivity Commission acknowledge that ships are the overwhelming or critical vulnerability point that underpins all other supply chain vulnerabilities and that the role of ships be given far greater attention in the final report.
- That the Productivity Commission undertake a specific stakeholder engagement on the supply, suitability and pricing of ships, and to undertake more detailed research on the vulnerability of the shipping component of supply chain policies that could mitigate that vulnerability, prior to releasing an Interim Report on exports and prior to issuing a final report.
- That the Productivity Commission review its decision to not include food, given that food production is critically dependant on fuel, fertiliser and chemicals, largely imported and transported by ships.
- That the Productivity Commission recommend in its final report that the government commit to supporting a strategic fleet as a key mitigation strategy to improve Australia’s supply chain security.
Maritime Industry Australia’s submission said the initial report from the commission falls short of comprehensively identifying and considering sea transport vulnerabilities as part of the supply chain.
“Australia is exposed in terms of ensuring that adequate ships would be available to the nation should the global market fail,” MIAL’s submission reads.
It goes on to point out that the ultimate control of commercial ships is determined by the nation in which they are registered, or where the owner is domiciled.
“We are utterly exposed and reliant of foreign ships under foreign government or corporation control to service our trading needs,” the submission reads.
“Australia has allowed our national merchant shipping capability to reach the point where there is no vessel that we could direct to deliver liquid fuel or chemicals (for say water treatment) and very, very few suitable for the carriage of other essential products such as fertiliser or medical supplies. We are at the point where the skilled mariners this nation has relied upon to ensure safe passage of vessels to and from the country has been so eroded that it will take decades to rebuild.
“Relying on the market to take care of supply of essential goods ignores historic events where ships have been required on government terms – that is requisitioned. Further, a reliance on open registries to not requisition (thereby leaving the vessels in the market) fails to understand the relationships between ownership and registration.”
All submissions to the report on supply chain vulnerability can be read in full on the Productivity Commission’s website.
This article is a continuation of yesterday’s coverage of industry submissions to the Productivity Commission’s inquiry into vulnerable supply chains.