Northern Australian businesses rely on interstate and intrastate trade in goods and services.124 These businesses, and their customers and suppliers around Australia, need efficient and resilient supply chains to keep supply costs low, maintain reliable connectivity and support competitiveness.
Instead, there are inadequate road networks, sparse air and rail routes and inefficient intermodal transfer points. This increases input and production costs and slows the transport of supplies and products in and out of the region.
Many issues revolve around the region's remoteness, which make it reliant on interstate suppliers, distributors and customers.
Supply chains relying on transport between the rest of Australia and Northern Australia are vulnerable to many risks, such as:
• disruption by extreme weather
• road and rail incidents
• interruptions to international trade and their impact on domestic supply via southern ports
• disruptions to processing and warehousing in southern capitals highlighted during the pandemic.
Supply chains within Northern Australia are susceptible to disruption too. High-intensity weather events periodically close roads and railways.
In addition, many of the region's road networks are under-developed and regional roads remain unsealed. This makes them impassable for heavy vehicles in the wet season and they can be completely closed when low-level stream crossings flood.
As a result of all these factors, supply chain operators for minerals, commodities and agriculture (which typically rely on multiple operators) often struggle to meet regional needs and are forced to impose additional costs on their customers.
Unreliable supply chains not only increase costs for businesses, households and government agencies in Northern Australia, they compromise liveability, delivery of essential services and national security. Building more efficient and resilient supply chains to, from and within Northern Australia should be a government priority.
For a detailed discussion of this subject, see the Transport chapter.