There is no doubt Australia’s supply chains are under pressure – not from a single event, but from a convergence of ongoing disruptions that are increasingly structural in nature. Geopolitical instability, economic uncertainty, infrastructure gaps, and a deepening workforce crisis have made unpredictability the norm rather than the exception.
We’ve moved beyond isolated shocks. We’ve entered an era where volatility is the baseline – and supply chains need to be rebuilt around that reality.
Globally, the rules of trade have never shifted faster and are changing in real time. Exemptions are floated and then repealed. As global trade flows become more reactive, Australian operators, even at a distance, are impacted. Delays, congestion, and route changes are placing pressure on importers and exporters alike, complicating logistics planning and undermining reliability in freight timelines.
The impact has been evident in recent months in Australia. The great thing in our land of droughts and flooding rain, particularly the latter, is bumper agricultural exports. Being an island, our farmers and regional exporters rely on incoming container trade to capitalise on the current boom in regional exports. The disparity between seasonal container demand and container supply continues to be a challenge in the Australian marketplace.
The global climate is the great disruptor but has also seen some positives for the Australian businesses.
It has spurred the government in fast tracking the Fair trade agreement with the EU.
Australian agricultural exporters are experiencing more demand from our Asian trading neighbours as they swing away from US agricultural imports.
New trade opportunities are emerging for some Australian agricultural industries.
The $2.5 billion US Beef export market to China ground to a halt during April.
Australia's cattle industry is enjoying a surge in demand from China for grain-fed beef and is filling the gap.
Statistics from Meat and Livestock Australia (MLA) show Australian grain-fed beef exports to China have ramped up significantly, with 21,885 tonnes shipped in February and March – up nearly 40 per cent on the same period last year. Australia exported more than 127,000 tonnes of beef, a record for April.
The biggest customer was the US (37,213 tonnes), followed by China (21,572 tonnes).
Australia's almond export to China has burgeoned as well, from 0.77 per cent of Chinese almond imports a few years ago to nearly 70 per cent this year.
The Chinese market had been the source of the majority of grower revenue for the last few years and this the expectation is that Californian growers, who hold 80 per cent of the world's almond export market share, will see a decline.
Likewise, there is an opportunity for any Australian export commodity that does not have a tariff attached, to take advantage of international market opportunities.
Exporters need to be mindful that these opportunities and growth are occurring in a volatile international market. The old saying “don’t put all your eggs in the one basket” remains even more relevant now, than it did during Covid. The outcomes of the Prime Minister's July visit to China is to build closer economic and business to business relationships. This is ties. China has recently pulled back from Australian iron ore and steel imports as it continues to focus on greener energy opportunities.
During the China visit, Anthony Albanese held high-profile meetings with top business leaders in Shanghai and praised the Australian-Chinese economic relationship, while promising to back industry efforts to decarbonise China's huge steel sector.
Australian exports of coal and iron ore have been critical to China's massive construction boom and poured hundreds of billions of dollars into Australian government coffers.
But China is now trying to turn to other iron ore suppliers, while also cutting steel production and moving to decarbonise industrial production.
Over time, those shifts threaten to blow a massive hole in Australia's exports to China and the budget bottom line unless Australian businesses can adapt.
Any slowing of the Chinese economy will also have repercussions.
Whist we cannot control the global volatility, the question remains on how Australia will increase freight efficiency domestically to retain competitiveness?
Locally, policy ambition hasn’t yet translated into operational change. Earlier this year, the Federal Budget’s focus on local manufacturing and freight strategy is acknowledged as important, but real-world outcomes remain elusive. Freight diversification, particularly the shift from road to rail, has been a consistent government talking point, but continues to lack fast-tracked delivery… sorry, not sorry for the pun. Rail freight and Intermodal transport remains underutilised, despite being an obvious lever for congestion relief, emissions reduction, and resilience.
Without decisive infrastructure and policies favouring modal integration, operators are left relying on increasingly fragile road corridors and grappling with rising labour and compliance costs. For small to medium businesses in particular, this landscape creates compounding challenges. Many are now operating in survival mode, adapting reactively rather than planning proactively. That’s a risky position in an environment where cost blowouts and scheduling volatility can’t be easily absorbed.
The road freight market continues to experience mergers, acquisition or outright business collapse in the wake of global and local cost pressures and demand volatility. Contracts negotiated for a period of years become commercially unviable in a matter of months. Cashflow imbalance pressures, where some freight supply chain service providers impose short credit trading terms and shippers are increasingly requesting 60 and sometimes up to 90-day credit terms, is untenable for the majority of freight carriers. Only the largest are able to survive. We all know what lessening of competition means to our industry.
This is not just an infrastructure or freight issue. It’s an issue of imbalance and disparity across the freight supply chain.
But, it’s also a capability issue.
Technology is advancing at pace – from automation to predictive analytics and AI-enabled logistics tools – but implementation is still inconsistent. Many businesses simply aren’t ready to unlock the potential of these systems. It’s not the tools that are lacking, but the human capability to embed and use them effectively.
This brings us to what is arguably the defining issue of our time in supply chain: workforce readiness.
The labour shortage we face isn’t just about numbers. It’s about strategic capability. It’s about whether the people leading our freight, procurement, warehousing, and planning systems are equipped to think differently, lead change, and work across evolving platforms and processes. Warehouse and distribution centre operators have embraced the available automation and predictive technology much more so than others. Transport carriers in particular, all too often rely on the dreaded excel spreadsheets and legacy systems rather than exploring current market capabilities or focussing integration of data rather than duplication.
Too often, career development in this sector is undefined. There’s a lack of clarity in progression pathways. There’s a mismatch between training systems and the actual demands of modern logistics roles.
Australia’s talent pool is deep, but under-supported. We must move away from treating skills development as a reactive fix and start viewing it as core infrastructure.
That means:
- Strengthening partnerships between industry and education;
- prioritising training that adapts to emerging technologies and methods; and
- providing clearer, modular career paths that support long-term leadership growth.
Supply chain leadership isn’t confined to the boardroom. It lives in planning teams, shift supervisors, freight coordinators, and analysts. It’s the ability to make confident, informed decisions under pressure, to adapt, recalibrate, and keep goods moving even when conditions change without warning.
The State of Supply Chain in Australia today is one of tension, transition, and potential. Our systems are stretched but not broken. Our people are capable but in need of support. And our national ambition is real – but it needs sharper execution.
This isn’t about getting back to stability. That may no longer be realistic.
It’s about building supply chains that can function without it. That can absorb pressure, adapt fast, and move forward in the face of uncertainty. Because in today’s world, resilience is no longer a competitive edge, it’s the baseline.
This article was written by Sue Tomic, chair of The Supply Chain & Logistics Association of Australia and board advisor to the University of Sydney Business School Institute of Transport & Logistics Studies. It first appeared on its website.
