Into the thick of it: Australia’s much-needed strategy to ease cost of living pressures

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The importance of having a resilient supply chain has been heavily emphasised as skyrocketing costs of essential items are showing no signs of slowing down in Australia and across the globe. 

One does not need to be an expert economist to realise how global supply chain disruptions are impacting the cost of living in Australia when it is plagued with problems such as reduced sailings, shortage of empty containers, and port congestion.

RMIT University Professor Vinh Thai said these factors, which indirectly increase costs of food and other commodities, are not expected to improve any time soon considering given the uncertainty of the ongoing war in Ukraine, skills shortage, congestion in some of the world’s major ports, and unpredictable geopolitical events, such as the conflict between China and Taiwan. 

According to Thai, businesses need to develop and enhance their supply chain resilience capabilities in order to ensure that the costs of transporting essential items, such as food and other commodities, are not being shouldered by the public. 

The Australian government has partnered with Japan and India to implement the Supply Chain Resilience Initiative. The program is intended to promote best practices, attract foreign investments, and back buyer-seller matching events for supply chain diversification. 

However, more needs to be done if Australia is serious about easing the cost of living pressures in the country, Thai said. 

The RMIT professor highlighted the need for policies that support the development of the national supply chain capability by building key infrastructure in logistics, particularly maritime, given Australia’s dependency on maritime trade. 

On a global scale, Thai said governments need to collaborate and offer incentives for cross-border supply chain collaboration, especially in the South East Asia region. 

Furthermore, states should also take a more proactive role, diving into the thick of logistics and supply chain manpower development. 

Professor Vinh Thai is a logistics and supply chain expert in the School of Accounting, Information Systems and Supply Chain of RMIT University. He is also the founder of the Australian Maritime Logistics Research Network (AMLRN).