Logistics giants Aurizon, Brambles and Qube say infrastructure investment, productivity crucial

The chief executives of three major logistics companies want money pumped into underinvested infrastructure and a renewed focus by government on improving the nation’s productivity.

The chief executives of some of Australia’s largest logistics businesses believe economic and geopolitical uncertainty may hit operations in 2024 and want more investment in the country’s infrastructure.

Qube Holdings chief executive Paul Digney said he viewed the year with some caution.

“While the recent cooling in inflation in Australia was welcome, inflationary pressures remain both in the domestic economy and internationally and we expect they will continue for some time,” he told The Australian’s 2024 CEO survey.

“Uncertainty in the geopolitical landscape could further exacerbate that, and of course there is the small matter of a significant election in the US next year.”

Qube is Australia’s largest integrated provider of import and export logistics services and Mr Digney said labour shortages were biting.

“We continue to struggle to fill roles in remote and regional locations and that weighs on our forestry and resources operations particularly,” he said.

“We’re working through those challenges and have a range of programs and initiatives in place to demonstrate the value of Qube as an employer of choice.”

Qube chief executive Paul Digney.

Mr Digney said it was vital governments addressed Australia’s low productivity levels.

“It’s the key to further alleviating pressure on inflation and interest rates, and it will be key to unlocking business investment,” he said.

“And it will be key to driving non-inflationary wage growth. It used to be that wage negotiations were accompanied by negotiations over productivity offsets but that seems to have fallen by the wayside.

“Indeed, there is almost nothing about productivity in the government’s proposed labour reforms, which run the risk of skewing the other way. We have to start restoring that balance and refocusing on unlocking productivity as a driver of our economy and of our future prosperity.”

Aurizon boss Andrew Harding said despite some geopolitical risk in 2024 that had the potential to disrupt supply chains, the Australian economy was generally resilient.

“It requires discipline in spending and targeted investment, and policy settings that do not impose further costs and unnecessary regulation and roadblocks for business,” he said.

“Australian resources and agriculture will continue to support export earnings and government revenue, with outstanding opportunities for the economy as the energy transformation continues.

“The labour market remains tight in the rail and transport sector, with key challenges in securing roles such as electricians and engineers. This has the potential to be a constraint on business growth.”

Aurizon chief executive Andrew Harding.

Mr Harding, who runs Australia’s largest rail freight operator, said investment to improve the efficiency and resilience of core rail freight transport infrastructure should be prioritised, especially with climate change and more frequent extreme weather events.

“Targeted investments to improve the capacity, as well as resilience and reliability of key interstate rail corridors, will unlock significant productivity benefits for the economy – for exports, imports and domestic freight for consumers,” he said.

Brambles CEO Graham Chipchase

Brambles chief executive Graham Chipchase said the company had the advantage of being weighted towards consumer staples which were always in demand.

However, for Brambles which manages the world’s largest pool of reusable pallets, crates and containers, Mr Chipchase said he was approaching 2024 with some caution.

“Our conversations with large retail and manufacturing customers paint a clear picture that macroeconomic conditions are creating a softer demand environment and they have already begun adjusting inventory levels accordingly, particularly for discretionary items,” he said.

Mr Chipchase called for large-scale investment in areas like intermodal transport – shifting from road to rail or sea – which was needed if the logistics and transport sector was to move to a lower emissions environment.