CEO UPDATE
Australian governments each report fuel supply conditions remain stable with the Australian and State Governments maintaining there is no diesel shortage and contracted volumes continue to be met.
Diesel stocks on 17 March were 8% above the Minimum Standard Obligation (MSO).
The road transport system is under pressure and freight rail transportation continues to be under-utilised. Priority industries including health, defence and agriculture all rely on the freight logistics and freight transport industry – a point we continue to push. Every import, export and domestic supply chain relies upon this industry.
This goes to the core of ALC’s position. Fuel security is a freight system issue, not simply a supply question. Headline stock levels provide limited comfort if the logistics network is not operating at full potential. For operators, availability is determined by how well the system performs end-to-end. At the same time, diesel prices remain well above both pre-war levels and previous peaks, placing sustained pressure on margins and sharpening the focus on cost recovery across the supply chain. The current price spikes for diesel are unprecedented.
There is a clear opportunity to improve the response as it evolves. Greater focus is now being placed on lifting utilisation across the existing freight network, particularly the role of freight rail in moving non-bulk volumes easing pressure on fuel use. This aligns directly with ALC’s long-standing advocacy. Getting more out of the infrastructure already in place is one of the fastest and most practical ways to strengthen resilience and keep fuel moving efficiently across the country.
UPCOMING MINISTERIAL & GOVERNMENT MEETINGS
UPDATES ON PREVIOUS SIGNIFICANT MEETINGS
POLICY SUBMISSIONS
WORK IN PROGRESS
POLICY SUBMISSIONS
LODGED
UPCOMING ENGAGEMENTS | 21 MARCH - 2 APRIL
- The 2026 agenda will shift toward a more discussion-led format, giving members greater space to share operational insights and on-the-ground perspectives.
- This is aimed at better drawing on the collective expertise of the group, while providing the Office of Supply Chain Resilience with more timely, sector-specific input.
- The overall intent is to keep discussions practical and targeted, with clearer two-way value between industry and government.
- Lessons learned from a cyber incident exercise involving those systems SoNS.
- Vulnerability assessments.
- Incident response planning with the government.
- Closer oversight and support from the Department.
Industry Workshop: Low Carbon Liquid Fuels Knowledge Lab
- Low-carbon liquid fuels as a transition pathway for heavy freight.
- Scaling supply and distribution through the logistics network.
- Aligning decarbonisation with supply chain resilience and cost competitiveness.
For further details or to contribute to these discussions, please email Samantha.leighton@austlogistics.com.au
PREVIOUS ENGAGEMENTS
Recent Commonwealth roundtables maintain that there is no national fuel shortage. Ships are arriving, contracts are being honoured, and supply is moving into the system. The focus of discussion has shifted to how effectively existing supply is being utilised across the network, particularly as demand has lifted in certain locations. The government has established a central coordination point (fuelresponse@infrastructure.gov.au) and is focused on managing system performance rather than stepping into allocation or control measures. The overall tone was steady, but with a clear acknowledgement that utilisation across the network is now the critical variable.
The more immediate pressure is commercial. Diesel prices doubled (80c to $1.60 per litre) above pre-war prices, and roughly 40 cents higher than the spikes seen during the height of the Ukraine conflict. That is now flowing to freight operators. The discussion was direct. Companies will be “absorbing” costs until they can pass them onto customers via contractual revision of the fuel price – or price hikes. Neither is sustainable over any period of time. There was a clear view that how cost recovery is handled across the supply chain over the coming weeks will be critical, particularly for smaller operators and those relying on the spot market.
Operationally, the constraints are familiar but becoming more exposed. Driver shortages continue to limit how far the system can stretch, and there is very little slack left in parts of the road freight task. Stock levels were referenced, roughly 37 days of petrol, 29 jet, 30 diesels. The point consistently made was that availability is shaped by how the network is used, not just by how much fuel sits in storage. This is where ALC has continued to focus. There is capacity in the broader freight system, particularly in freight rail corridors, that can play a greater role in moving bulk volumes and relieving pressure on road-based distribution if utilised more effectively. And electric vehicles are exceptionally important for shorter journeys.
The clearest takeaway is that this is not a traditional supply issue-m although ongoing driver shortages continue. It is becoming a system utilisation issue. When demand shifts or parts of the network are operating close to capacity, pressure shows up quickly and unevenly. That has been a consistent theme in ALC’s advocacy. The resilience of the fuel system is directly linked to how well the freight network as a whole is used. For now, things are holding, but attention is squarely on whether the system can continue to utilise available capacity, including rail, to keep fuel goods moving efficiently across the country.
ALC met with the Shadow Treasurer to underline that industrial land is now a binding constraint on freight performance and, increasingly, on the cost of living. Well-located sites near ports, airports, intermodal terminals and key corridors are being rezoned or displaced, pushing logistics further from demand centres. This adds distance, time and cost into supply chains, and those costs flow through to prices. Freight depends on proximity and access, and both are being eroded.
The discussion highlighted that this cannot continue to be treated as a local planning issue. Decisions made in isolation are reducing national freight capacity without a clear view of the cumulative impact. A more deliberate approach is needed, recognising freight precincts and corridors as economic infrastructure, with stronger protections and clearer intent for their use. Without this, investment in roads, rail, and ports will not deliver full value, as surrounding land use undermines network efficiency.
There is also a direct link to sovereign capability. In any disruption, the system’s ability to move essential goods at scale depends on having the right footprint in the right locations. Once industrial land is lost, it is effectively unrecoverable. The central point is that resilience is shaped well before a crisis, through planning decisions that determine how the freight system operates.
ALC facilitated an online member briefing on current fuel supply conditions and their implications for the freight transport and logistics sector.
While there is no national shortage, pressure is emerging in how fuel is moving through the system, not whether it exists. The briefing unpacks the implications for operators, including cost pressures, distribution constraints and emerging risks. It also outlines ALC’s advocacy focus, including fuel excise, Tier 1 recognition for freight transport and logistics, and better use of the national network.
GEOPOLITICAL & TRADE UPDATE
Development
Shipping markets have continued to reprice risk across the Gulf as carriers adjust routes and insurers reassess exposure. Reuters reported that inbound vessel traffic into Dubai’s Jebel Ali port has dropped, with some shipping lines avoiding the Gulf entirely and diverting cargo to Red Sea terminals such as Jeddah and Sokhna.
War risk insurance premiums have also increased sharply. In some cases, the cost of cover for vessels entering Gulf waters has risen more than tenfold since the conflict escalated. The result is fewer vessel calls, more rerouting and higher spot freight rates on several Asia–Europe and Asia–Middle East trade lanes.
Why it matters
This is how geopolitical shocks start showing up in supply chains.
Rerouting cargo away from Gulf hubs adds time, fuel and operational complexity. Cargo that would normally discharge at Jebel Ali may now be routed through Jeddah or Sokhna and then transhipped onward. That means longer transit times and higher costs.
There is also a capacity constraint. Jebel Ali handled about 15.6 million TEU last year, far more than the nearby ports to which vessels are now diverting. When a hub of that scale is squeezed, the pressure quickly flows through global shipping schedules and container availability.
For Australian importers and exporters this typically shows up as higher freight rates and less reliable shipping schedules.
Implication for ALC advocacy
For ALC, this is a practical example of why supply chain resilience needs to be considered at the system level.
Global trade relies heavily on a small number of large hubs and strategic shipping corridors. When one of those becomes constrained, the effects spread quickly.
For Australia, the lesson is about strengthening the resilience of our own integrated freight logistics system. Port capacity, intermodal connections and protected freight corridors become more important when global shipping routes are under pressure.
Development
With cargo being diverted to alternative ports, pressure is shifting inland. Rail corridors from Red Sea ports such as Sokhna are seeing increased volumes, while inland terminals are managing more uneven cargo flows as shipments arrive in surges rather than steady patterns.
Why it matters
Rail and intermodal systems are designed around predictable volumes. When flows become uneven, congestion builds at terminals, container dwell times increase and turnaround efficiency drops. Even when cargo is successfully rerouted at sea, delays can still occur once it hits inland networks.
Implication for ALC advocacy
This reinforces the need for integrated freight network planning across ports, rail and intermodal infrastructure. It also supports ALC’s focus on freight rail as an important mode and utilisation tool, particularly when global disruptions shift freight into different corridors and increase pressure on inland networks.
Development
As carriers continue to adjust services away from Gulf ports, early signs of container imbalance are emerging across Asia and the Middle East. Equipment is starting to pool in secondary ports while repositioning cycles are disrupted, particularly for reefers and higher-value cargo.
Why it matters
Container imbalances tend to build quietly before hitting quickly. When boxes are not where they need to be- (e.g. when shipping routes are longer), exporters compete for available equipment, which pushes up rates and delays shipments. For Australian exporters, particularly in agriculture and food, this can show up as reduced access to containers and less flexibility in forward bookings.
Implication for ALC advocacy
This reinforces the importance of end-to-end supply chain visibility and coordination. It also supports ALC’s focus on efficient container flows through ports and inland networks, particularly where global imbalances start to translate into local bottlenecks.
Development
Air freight has also been affected. Reuters reported this week that cargo rates have jumped by as much as 70 percent on some routes, with major Gulf hubs such as Dubai and Doha operating under heavy pressure.
Why it matters
Air cargo carries around one third of global trade by value, so disruptions here show up quickly in supply chains – e.g. healthcare products, pharmaceuticals, electronics and aircraft/machinery parts. Reduced cargo capacity means higher costs and less reliability for time-sensitive shipments.
Implication for ALC advocacy
This reinforces that air freight infrastructure matters. Airports are not just passenger gateways; they are critical logistics assets that support high-value exports and time-sensitive supply chains.
Development
The Commonwealth Government has started intervening domestically. Reuters reported that the government will release around 5 million barrels of petrol and diesel from emergency reserves and temporarily relax fuel standards to maintain supply, particularly in regional areas. On March 18th 20% of the Minimum Standard Obligation stock of diesel was released – the MSO is now below the pre-war minimum whereas petrol and jet fuel remain above the minimum.
Why it matters
This signals that the government sees the risk as real. While the immediate goal is to stabilise supply, it also highlights Australia’s structural exposure. The country now operates with only two active refineries and remains heavily dependent on imported refined fuels, and we import nearly all crude.
Implication for ALC advocacy
From an ALC perspective, this directly aligns with our advocacy on fuel security and freight productivity. Diesel availability is central to the freight task, particularly in agriculture, mining and regional transport. Events this week make that connection much harder to ignore.
Development
Alongside the immediate disruptions, there has also been a change in longer-term strategic supply chains. Lynas has reworked its rare earths supply agreement with Japan, while Australia is also moving closer to the G7 critical minerals alliance.
Why it matters
This is part of a broader shift to rebuild trusted supply chains for critical materials among allied economies. Rare earths sit at the centre of defence systems, clean energy technologies and advanced manufacturing. As these supply chains evolve, the freight task that supports them will grow.
Implication for ALC advocacy
For ALC, the lesson is that supply chains need to be planned end-to-end. Freight corridors, port capacity, industrial land, and logistics infrastructure all need to keep pace with future growth.
Development
As vessels divert away from the Gulf, bunkering demand has shifted towards ports in the Red Sea and East Africa. These ports are seeing increased demand for marine fuel as shipping lines adjust longer and less predictable routes.
Why it matters
Bunkering is a core input to shipping operations. When demand concentrates in fewer locations, fuel availability tightens and prices increase. Longer routes combined with higher bunker costs push up voyage costs, which flow directly into freight rates and ultimately landed costs for importers and exporters.
Implication for ALC advocacy
This highlights how closely fuel logistics and freight costs are linked. It reinforces ALC’s position that fuel security should be considered alongside freight policy, particularly given Australia’s reliance on long-haul shipping routes.
ALC IN THE NEWS
SUBMISSIONS LODGED
OPEN SUBMISSIONS FOR ALC MEMBER INPUT
Energy Crops in
Product Guarantee of Origin (PGO)
Position Paper
2027 Occupation Standard
Classification for Australia (OSCA)
update
National Hydrogen
Regulatory Guidebook:
Pipelines
Rail Safety National Law –
Consultation Regulatory
Impact Analysis
Consultation Regulatory Impact Analysis Statement (C-RIS) on implementing a forward-looking cost base for heavy vehicle charges
For further details or to contribute to these discussions, please email: policy@austlogistics.com.au
Issued by:
Samantha Leighton,
Head of Government and Industry Affairs
Period:
07 March 2026 – 20 March 2026
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