Trans-Australian railway reopens but supply chain strain continues

The ARTC says hundreds of freight rail services run every month from state capitals and regional centres. The record flooding effectively cut the rail connection to the NT and WA.

“We know a significant volume of goods, particularly perishable items and foodstuffs use the rail links. So obviously in terms of supplying the people in those parts of Australia – it’s critical,” said Morrison.

About 100 ARTC staff worked to repair the line using more than 50,000 tonnes of ballast and rock. The flooding that cut the rail line in South Australia (SA) was described by meteorologists as a one-in-200-to-300-year event. More than 200mm of rain fell in one day.

Morrison said the cutting of the rail line presented real difficulties to their customers and brokers because finding an alternate source of transportation comes with its own set of obstacles.

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“We’re in a challenging period in terms of logistics, nationally and internationally,” he said.

“We’re challenged as well by a shortage of truck drivers at the moment and, obviously, COVID is having an impact on some parts of logistics supply chains,” added Morrison.

Shipping goods to WA or the NT is also an option under these circumstances, he said, but is obviously much slower and not suitable for perishable goods.

“If you’re used to shipping by train, and you pack things for that purpose, if you look for an alternate method you’ve got to make sure that the goods are then packed and prepared appropriately for the different methods of transportation,” he said.

Morrison said that while the packing methods are different, the insurance policies offered by NTI for transporting goods by train and truck are actually the same.

“So, for example, our inland policy for cargo covers the goods for the journey and as a standard we can cover goods by truck, or a train, or sea, or air. So, it’s not a problem with the policy, the coverage would be the same,” he said.

Despite the severity of the rail line cut, Morrison said, managing its impact and providing advice to customers and brokers about it is part of their day-to-day job.

“We have goods going across Australia and around the world and when you have that level of diversity in the portfolio you’re always going to have floods and fires and hurricanes and various things going on all around the world that can have an impact,” he said.

Supply line issues and transport costs have been challenging for many months.

In September, Insurance Business reported that the cost of freight had reached extreme levels. Brokers told IB that clients were losing profit margins just paying extra freight costs, or “COVID tax” as one called it.

“It’s a perfect storm and it’s an example, in some ways, of globalization. You have a unique situation with these COVID related impacts all around the world,” said Morrison.

The situation was unique because a world pandemic intersected with peak Christmas shipping season. From September until Christmas, companies all over the world were rushing to fill their stores with stock.

Read next: Coronavirus prompts shipping industry to take a hard look at supply chains

The cost of shipping a 40ft container from China to Australia was costing between $5,000 and $7,000 said NIT’s logistics risk engineer, Kurt Herron.

Months later, the shipping and transport situation remains very difficult. However, the repair of the Trans-Australian railway reopens a vital connection.

Simon Ormsby, the ARTC’s group executive interstate network said all of Australia owed a debt of thanks to the crews and contractors who had worked extremely hard to bring the interstate network back online.

“ARTC crews from Port Augusta led the charge with support by teams from Kalgoorlie, Adelaide and Port Augusta. Contractors and staff from other areas were also called in to assist due to the overall scale of the operation,” Ormsby said.