Capacity constraints and inefficiencies in the live export supply chain process

Summary

​The Australian livestock industry is a complex set of supply chains between farms, feedlots, processing export deports, ports and export markets. About 20 million head of cattle and 50 million head of sheep are moved between these enterprises each year, with significant differences in supply chain paths by month and by year. The project was able to characterize the nature of the supply chains and the current constraints, bottlenecks and inefficiencies.

Stakeholder consultation and TraNSIT modelling were used to quantify the bottleneck in the supply chain. While there is a long list of issues, many of the constraints identified are commercial considerations and regulatory issues. Actual infrastructure constraints were identified on a number of road and port access areas where investments would improve the movement of livestock from property to export depot and then on to the export port. We calculated that the industry spent nearly $52 million and $14 million on cattle and sheep movements respectively from properties to port between 2016 and 2017, whereas all Australian agricultural industries spend around $5.3 Billion per year (2015).

Supply chains are long and fragmented and the sourcing of animals is geographical spread. Changes on ownership and a lack of vertical integration also leads to inefficiencies within supply chains captured in the observation that inefficiencies and bottlenecks are often "caused somewhere else by someone else". A number of land-side infrastructure investments were identified that could have a significant impact such as improvements in northern beef roads, improving the road between Mt Gambier and Portland and moving the export facilities from the inner harbour at Fremantle to the outer harbor in Cockburn Sound.  However the small-scale of the industry means it is unlikely that infrastructure investments would be made solely on the basis of the savings to the industry.

Ensuring the most efficient pathways to ports are maintained should be a focus for the industry, with the greatest savings to be gained by having guaranteed access to high performance vehicles to the closest port. The northern wet season limits cattle supply from property, with the changing date of Ramadan is an immanent opportunity for northern cattle exporters. There is about 40,000 head per month spare capacity for the wet season (December- January- February) and the development of infrastructure that 'stores' cattle to ensure supply for the Indonesian market should be considered. The likely development of the on-shore (unconventional) gas industry in the Northern Territory could result in the building of roads which provide year round access. If that is the case, the industry could work with companies that are developing gas fields to have roads constructed for mutual benefits.