Government & Defence Supply Chain Management

APS Has Grown Up: What Planning Platforms Like GAINS Can Now Do, and Why It Matters

Ten years ago, two things in a supply chain lived in different buildings. The planning system sat with the planners: it forecast demand, set reorder points and pushed purchase and production proposals into the ERP every night. The network model sat with a consultant: a one-off study, every four or five years, that decided how many distribution centres you had and where, and was out of date by the time the slides were printed.

That separation is why so many Australian networks have drifted. The planning system optimised stock inside a structure nobody had looked at since the last acquisition. The structure was only ever revisited when a lease expired or a board got nervous.

The useful thing that has happened to advanced planning systems in the last decade is that the two buildings have merged. The network model, the inventory policy, the demand forecast and the disruption scenario now sit in one system, on the same data, and the answer from one flows into the other. We are going to use GAINS as the example, because it is the platform we use hands-on and because it is a clear case of the shift. We work with GAINS in Australia and New Zealand, and we rate it for a particular kind of business, so read this knowing that, and read the section on what it still will not do for you with the same attention as the rest.

What changed in ten years, in plain terms

From a nightly batch to a living model. The old APS ran overnight and produced a plan you reacted to in the morning. Modern platforms hold a continuously updated model of the network and let you ask it questions during the day. That sounds small. It is the difference between a report and a tool.

From a point forecast to a range. Statistical forecasting assumed demand was knowable. Machine learning changed the forecast from one number to a distribution, and the better platforms now predict supplier lead times the same way, which matters more than the demand forecast for most Australian importers sitting at the end of a ten-week ocean leg.

From safety stock by location to inventory across the network. Single-location reorder points gave way to multi-echelon inventory optimisation, which decides how much to hold centrally versus regionally as one question rather than site by site.

From planning only to planning plus design. This is the big one. In May 2023 GAINS acquired 3 Tenets Optimization, a supply chain design specialist whose customers included The Home Depot and Newell Rubbermaid, citing Gartner’s observation that more frequent design reviews were making analytical tools critical. Other vendors have made similar moves. The result is that network design is now a capability inside the planning platform rather than a project outside it.

From “what if” in a spreadsheet to scenarios with decisions attached. Scenario planning used to mean a fortnight of spreadsheet work and a slide. It now means a library of scenarios run through a simulation of the actual network, each with a trigger and a pre-agreed response.

From recommendation to action. The newest shift is that the platform does not stop at a recommended order. It can place it, within rules you set, and tell you why. Call it agentic if you like. In practice it means fewer manual overrides and a planner who spends the day on exceptions.

What GAINS looks like now

Stripped of vendor language, GAINS today is five things on one data model.

Demand prediction, including lead-time prediction. Multi-echelon inventory optimisation, which is where GAINS made its name with inventory-heavy distributors, manufacturers and service-parts businesses. Supply and replenishment planning that generates the orders. Sales and operations planning on top. And Supply Chain Design, which is the capability this article is about.

The design capability is where the merger shows. GAINS models the supply chain using discrete-event simulation, covers network optimisation and long-range scenario planning, and uses what it calls a Decision Engineering and Orchestration layer to connect design, planning and operations to cost, service and risk priorities. It handles greenfield analysis, network optimisation, scenario modelling and full network simulation under what-if conditions. The model itself is built and run in an environment GAINS calls Supply Chain Architect, where its design team translates a client’s network and historical data into model inputs and runs network and inventory scenarios. An independent analyst, QKS Group, placed GAINS as the leader in its Q2 2026 SPARK Matrix for supply chain network design, highlighting continuous design, inventory optimisation integration, simulation-based scenario validation, tariff and cross-border cost modelling, and a design-as-a-service model.

Two points of honesty. First, GAINS is a packaged planning suite with design built in, not a build-your-own optimisation environment for a team of PhDs. For most Australian mid-market businesses that is a strength, because the design work gets done rather than engineered. Second, the simulation and the optimiser are only as good as the costs, lead times and constraints you feed them, which is where most of the work actually is. More on that below.

What this now lets an organisation do

This is the pragmatic part. Each of these is something we could not do with a planning system ten years ago, and each is something we have watched Australian organisations need this year.

Redesign the network every quarter, not every five years

What we see: a distributor’s network was designed in 2019, before the company bought two competitors and before diesel went up by two thirds. Nobody has re-run it because re-running it was a six-month project.

What you can now do: hold the network as a living model, with current freight and fuel costs, demand by customer and inventory policy by item, and ask it a structural question in a week. Should the Sydney DC close now that Melbourne is the manufacturing origin. Should Perth stock come direct through Fremantle. Does rail for the Melbourne to Brisbane leg pay at current diesel prices. GAINS’s own framing is that design stops being a one-time project and optimisation a separate function, so the network evolves as the business changes. In our experience the real change is behavioural: once the model exists and the data feeds are live, the executive team asks the question every quarter because the answer costs days, not months. gainsystems

Decide your disruption responses before the disruption

What we see: in March, when the Strait of Hormuz closed, most planning teams spent three weeks working out what it meant for them. By the time they knew, the April supplier was signed and the air freight bill was in.

What you can now do: build a short library of scenarios that matter to your business and run each through a simulation of your actual network, with inventory, transport and sourcing responding. A six-week closure of a trade lane. A key supplier down for a month. A major customer bringing a promotion forward. A 10 per cent tariff on a category. GAINS describes its approach as a scenario library tied to triggers and pre-decided actions, with the design, demand, inventory and agent capabilities connected so a scenario’s operational impact flows straight into planning. The practical result is a one-page response plan per scenario: what we stop, what we switch, what we hold, and who presses the button. When the trigger fires, the fortnight of analysis has already been done. gainsystems

Test a sourcing move with the whole network in the model

What we see: a manufacturer onshores a product family, the unit cost looks fine, and distribution cost rises because the network was built for product arriving in containers at Port Botany, not on pallets from Dandenong. We wrote about this in our recent piece on onshoring after the fuel shock.

What you can now do: put the sourcing change into the model before you sign. Scenario modelling in GAINS tests facility locations and roles, sourcing strategies and supplier changes, transport flows and inventory positioning, and compares options across cost, service and risk. So the nearshoring case for a product line comes with its network consequences attached: the inbound materials leg that did not exist before, the Perth leg that now starts in Melbourne, the safety stock that should fall, and the port of entry that should change. The sourcing decision and the network decision get made together, which is the only way they should be made. gainsystems

Reposition inventory when the structure changes

What we see: safety stock parameters set at go-live, overridden by hand ever since, and never reset when a DC was added, a supplier was switched or a lead time changed.

What you can now do: because the inventory optimiser and the network model share a data set, a change to the structure reprices the stock. Close a DC and the central safety stock adjusts. Add a backup supplier with a longer lead time and the items it covers get the longer leg in their policy. For an Australian business carrying $40 million of stock with a C-range at 20 weeks of cover, this is where the money is, and the network question and the inventory question stop being two projects.

Put fuel in as a band and watch the cheapest network move

What we see: network models built with a single diesel price, usually whatever it was when the model was built.

What you can now do: run the network at high, base and low fuel, and at this year’s and next year’s ocean rates, and see which structural decisions are robust across the band and which only work at a point. The redesigns that survive a 20 per cent swing in diesel are the ones worth funding. The ones that only work at the peak are the ones to park.

Plan capacity and fabrication alongside inventory

What we see: a distributor with a fabrication step (cut-to-length, kitting, assembly, finishing) planning that step in one tool and the stock that feeds it in another, with the two disagreeing weekly.

What you can now do: hold the fabrication capacity, the component stock and the finished-goods targets in one plan. We have used GAINS hands-on for fabrication and inventory planning with a large Australian distributor, and the practical gain was not a clever algorithm. It was one set of numbers that the fabrication supervisor, the inventory planner and the branch manager could all see.

Combine networks after an acquisition, or design one from scratch

What we see: two acquired businesses still running two networks four years later because nobody has done the combined design.

What you can now do: greenfield and combined-network analysis is a standard capability. GAINS lists creating combined network synergies among its network optimisation uses, alongside long-range scenario planning aligned to growth, M&A and sustainability targets. The integration business case that used to take a quarter of consulting time can be built in weeks on the platform, and more importantly it can be kept alive as the integration proceeds. gainsystems

Let the plan reach the order

What we see: planners overriding 60 per cent of system recommendations because they do not trust the number and cannot see why it moved.

What you can now do: with a platform that explains its recommendation and can act within rules you set, the override rate falls and the planner’s day changes. Reducing manual overrides and reactive planning is one of the outcomes GAINS claims for connecting design to execution. We would put it more carefully: the override rate falls when the planners have been trained on why the number moved and when forecast value added is measured. The tool enables it. The process delivers it. gainsystems

What it still will not do for you

It will not fix your data. Lead times that have not been updated since go-live, freight costs by lane that live in a forwarder’s invoice, minimum order quantities nobody has checked, bills of materials that do not match the factory. The model will run on all of it and produce confident nonsense. The data build is the first workstream of any design or planning implementation and usually the longest. We budget for it up front because the clients who did not are the ones who stalled.

It will not own the scenario library. A library nobody maintains is a slide deck with a login. Someone has to own the scenarios, refresh the triggers and run the quarterly network review. In the organisations that get value from this, that person exists and has the authority to move volume between suppliers and sites.

It will not run your S&OP. It makes the monthly meeting possible at scale by giving everyone the same numbers and letting the room run a scenario live. If the executives do not turn up and decide, it is an expensive reporting layer.

It is not every tool. GAINS is strongest where inventory is the problem: distribution, manufacturing with a distribution tail, service parts, retail replenishment. If your core problem is deep finite-capacity scheduling across a process plant with allergen sequencing and clean-in-place windows, look hard at the scheduling depth before you assume one platform does everything. We say this as a firm that likes GAINS.

It will not make the decision. It makes the trade-off visible in a week rather than a quarter. The executive still has to choose between cost, service and risk, and someone still has to sign the lease.

How organisations are actually using it

The most practical change we have seen is in who does the design work and how often. Instead of commissioning a network study every five years, a business keeps the model live and has someone run it quarterly, either internally or through a design-as-a-service arrangement where a partner maintains the model and brings the scenarios to the S&OP meeting. That is the model we run with clients: we build and maintain the model in Supply Chain Architect, keep the fuel, freight and demand inputs current, and bring the network and disruption questions to the table on a schedule rather than in a crisis.

The second change is sequencing. The businesses that get value start with the inventory optimisation, because that is where the measurable money is in the first six months, and switch on design once the data and the planners are ready. Starting with a grand network redesign on day one, before the data is clean and before anyone trusts the forecast, is the fastest way to end up with a sophisticated model nobody uses.

How Trace Consultants Can Help

Trace Consultants is an Australian supply chain, procurement and operations advisory firm. We work with distributors, manufacturers, retailers and large precincts on planning and network decisions, with senior people who have run these systems and these processes before.

Deciding whether and what to buy. Through our technology practice we run decision-led selections: the decisions that cost you money become the requirements, vendors demonstrate on your data, and we cost it over five years. We are platform-literate across the ERP suites, the large platforms and the specialists, and we have hands-on experience with GAINS. We tell you where it fits and where it does not.

Network design, continuously. Our strategy and network design team builds and maintains the network model, runs the quarterly design review and the disruption scenarios, and brings the answers to your executive team. We have built the case to open facilities and to close them, so we are not attached to either answer.

Getting the data and the planners ready. Our planning and operations work cleans the master data, sets inventory policy by segment, designs the S&OP process the platform will run, and trains planners on why the number moved so the override rate falls.

Scenario planning that is owned. Our resilience and risk management team builds the scenario library, defines the triggers and the pre-decided actions, and puts a named owner behind it.

Implementation from your side of the table. Our project and change management team runs the business side of the implementation: process design, data build, planner adoption and benefits tracking against the baseline we set before the project started.

We do this across FMCG and manufacturing, retail and property, hospitality and services, where the inventory and the network are the operation.

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Where to begin

If you already run a planning platform, find out whether its design capability is switched on and whether anyone has run a network scenario in the last year. Usually the answer is no, and the capability you are about to buy is one you already own.

If you are choosing a platform, write down the five structural questions you wish you could answer in a week, and make every vendor answer them on your data in the demonstration. A platform that cannot show you the Perth leg at two diesel prices is not the one.

If you are starting from spreadsheets, start with the inventory, get the data clean, and switch on design once the planners trust the forecast. Build the scenario library for the three disruptions that would actually stop you, and give it an owner.

And whichever of those you are, book the first quarterly network review in the calendar now. The capability is only worth having if the question gets asked on a schedule.

The bottom line

The planning system and the network model used to be two different things done by two different people on two different timescales. In platforms like GAINS they are one model, and that changes what an Australian business can do: redesign the network as often as the costs move, decide disruption responses in advance, test a sourcing move with its network consequences attached, and reposition stock the moment the structure changes. What it does not change is the need for clean data, a process with an owner, and an executive team willing to decide. The tool makes the trade-off visible in a week. The organisation still has to act on it.

If you want a plain view of whether your planning platform could be doing this already, or which one would, we are easy to talk to.

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Onshoring After the Fuel Shock: What We’re Seeing in Australian Businesses, and What Actually Works

Since March, almost every supply chain conversation we have been in has had the same sentence in it somewhere: we need to bring supply closer. BSI’s August survey put a number on it, with 79 per cent of Australian businesses either nearshoring already or planning to within a year. The instinct is right. The execution, in most of the organisations we see, is not.

We wrote about the economics of reshoring in February and about nearshoring to Southeast Asia in March. This piece is different. It is about what has actually happened inside Australian businesses in the eight months since, the five patterns we keep walking into, and what works instead. It is written for the operations director, the supply chain lead and the CFO who are being asked to make this call before Christmas.

What we’re seeing

The April supplier is still on the books

In March and April, with fuel surcharges arriving weekly and containers being deferred, procurement teams did the sensible thing in the moment: they found whoever could ship and signed them up. A second packaging supplier in Thailand. A contract manufacturer in western Sydney who had capacity. A distributor who could get resin.

Most of those arrangements are still running, on the terms agreed when there was no alternative, and nobody has gone back to ask whether they are now the primary source, the backup or a mistake. In one business we worked with recently, the April supplier was 18 per cent dearer than the original, had never been through a proper quality qualification, and was carrying 40 per cent of the volume because the planner had never been told to switch it back. That is not a resilience strategy. It is an unfinished emergency.

The business case was built at the peak

When the case for onshoring a product line lands on the CFO’s desk, the freight number in it is from July, the diesel number is from the worst week of the year, and the exchange rate is from 2025. Domestic manufacturing wins everything.

The problem is that two of those numbers are already turning. The dollar climbed to around US$0.71 by mid-2026 from 0.64 a year earlier, which makes every imported unit cheaper. Every major shipping analyst now expects container overcapacity and lower contract rates in 2027 as new ships arrive and services return to the Suez Canal. A case that only works at the 2026 peak will be underwater by the time the plant is commissioned. We ask one question of every onshoring case we see: does it still work with freight at 2024 levels and the dollar at 0.71? If the answer is no, the product is not an onshoring candidate. It is a dual-sourcing candidate. ‍

The product moved, the network didn’t

This is the expensive one, and it gets noticed last. A manufacturer shifts a product family from a supplier in Guangdong to a contract manufacturer in Melbourne. Unit cost looks fine. Twelve months later, distribution cost is up and nobody can explain why.

Here is why. The distribution network was built for product arriving in containers at Port Botany and the Port of Melbourne, with regional stock positioned from there. Now the product leaves a factory in Dandenong on pallets. The Sydney distribution centre is still receiving it, still holding it and still shipping it, even though direct dispatch from the plant to NSW customers would be cheaper. Perth and Brisbane now get a long road leg from Melbourne at today’s diesel prices instead of a direct port call. The raw materials, which used to be the overseas supplier’s problem, now arrive through the Port of Melbourne on the business’s own account, into a store that was never designed for them. And the safety stock, which was sized for a ten-week ocean lead time, is still sitting in the system because the planning parameters were never reset.

Every sourcing change is a network change. In our experience, onshoring one significant product family is usually enough to justify re-running the whole network model.

Nobody owns the backup

Dual sourcing sounds like two suppliers. In practice it usually means one real supplier and one name in a spreadsheet. The second supplier has not been qualified at volume, has no contract with allocation priority, is not set up in the ERP, and its lead time is not in the planning system. The procurement team, which was already stretched managing the first supplier, now has twice the supplier management load and no extra people. When the next disruption comes, the backup takes eight weeks to activate, which is about how long the disruption lasts.

The board wants the story; the numbers want something smaller

“Made in Australia” is a good story, and in some sectors it is now worth money: the government fast-tracked $6.15 billion of concessional National Reconstruction Fund finance in April specifically to strengthen critical supply chains, and if you sell to government, Australian content now carries weight in evaluations. But when we run the numbers on a full manufacturing move for a finished consumer product, the answer is almost always that it costs more than the disruption it avoids. The answer that usually does stack up is smaller and less glamorous: import the dense, stable inputs and do the last step here.

What actually works

Sort the portfolio in a day, not a quarter

The organisations that handle this well do not run a six-month study. They sort the range on two questions: would losing this item stop the business, and how much of its landed cost is freight, inventory and risk rather than the unit price. That sorts the portfolio into five groups fast.

Finish-here candidates: anything where the finished product is mostly water, air or packaging. Bulky and low-value items, where freight is a large share of cost. Perishable and promotional lines, where the cost of being wrong on the forecast is high. Regulated and critical items, where a single offshore source is unacceptable. And everything else, which stays offshore with a proper second source and a sensible safety stock.

We do this with clients in a workshop with their own data, and it is the single highest-value day in the whole exercise. It stops the debate about moving everything and starts the work on the dozen items that matter.

Finish here, make there

The strongest onshoring model for Australian businesses right now is final-stage processing, not full manufacturing. Import the concentrate, the bulk powder, the components or the flat-pack. Do the mixing, filling, packing, assembly or labelling in Australia.

Freight is paid on dense inputs rather than on finished goods. Lead time to the customer falls from weeks to days, so the business can make to a retailer’s promotion instead of forecasting it three months out. The capital required is a filling line or an assembly cell, not a factory. And the local processing step is often what earns the Australian content treatment that government buyers now weight. We have seen it work in beverages, cleaning and personal care, pet food, nutrition, building products and furniture. The design question is where the finishing step sits in the network, which is a warehousing and distribution problem as much as a manufacturing one.

Dual source like you mean it

A real second source has four things: a completed qualification at the volume you would actually need, a contract with allocation priority written into it, a live record in the ERP with its real lead time, and a planner who has run a test order through it in the last six months. If any of those is missing, you do not have a backup. You have a hope.

This is procurement work, and it is the part most businesses underestimate. Qualifying a supplier in Vietnam or Indonesia for a product with any complexity takes a year or more, and during that year you carry both suppliers. Budget for it, or do not start.

Reset the planning parameters the day the source changes

When lead time goes from ten weeks to one, the safety stock should fall. When a backup supplier with a longer lead time is added, the safety stock on the items it covers should reflect the longer leg, not the shorter one. Neither happens on its own. In most of the planning systems we see, the parameters were set at go-live and have been overridden by hand ever since. An onshoring move without a planning reset leaves the working capital benefit on the table and often adds inventory rather than removing it.

Redesign the network to carry the result

Where you make changes where you hold, how it moves and which ports and distribution centres you need. The network model needs the onshoring move in it, the inbound materials leg that did not exist before, the backup supplier’s lead time, and current diesel prices. Then it needs to be run again at 2027 freight rates, because designing a network against 2026 peak ocean rates is the same mistake as pricing fuel at the peak.

The useful finding is that the redesign usually pays for itself on distribution cost alone, whichever way the sourcing decision goes. Fewer long road legs, more regional stock, rail for the interstate backbone, and direct port calls into Fremantle or Brisbane for product currently landed in Melbourne and trucked across the country. The fuel shock changed the cheapest shape of most Australian networks. An onshoring decision is the right moment to redraw the map, because the map is changing anyway.

Make someone own it

The businesses that came through this year in reasonable shape had one thing in common: a named person who owned supply risk, with the authority to switch volume between suppliers and the planning access to do it. In the rest, the decision sat between procurement, planning and operations, and the April supplier stayed on at 40 per cent of volume because it was nobody’s job to change it. This is an organisational design question, and it is cheap to fix.

Use the money as a sensitivity, not a foundation

NRF finance lowers the capital cost of a line or a plant, and that is often the term that decides a finish-here case. Government and Defence buyers now favour Australian content. Put both in the model as sensitivities. If the case stands without them, they are a bonus. If it only stands with them, you have a bet on policy, and policy changes.

What the work looks like

When we do this with a client it runs over about eight weeks, and it is deliberately built so the business can act at the end of it, not commission another study.

The first fortnight is the map. Which items are single-sourced, from where, through which ports, and which of them would stop the business. Landed cost brought up to 2026 actuals with three bands on freight, fuel and the dollar, and a disruption cost added for every critical single-sourced item. The April suppliers get their first proper review.

The second fortnight is the sort and the options. The portfolio goes into the five groups. For the shortlist, we get real quotes, including capital, from a domestic contract manufacturer and a nearshore alternative, and we work out which of this year’s panic arrangements becomes primary, secondary or exit.

The third fortnight is the network. The model is run with the shortlisted moves in it, with the inbound leg, the backup lead times, current diesel and 2027 freight, and with the distribution centre footprint open to change.

The last fortnight is the decision pack and the transition plan: which items move, where the finishing step sits, what the network looks like, what the planning parameters become, who owns supply risk, what the contracts need to say, and what it costs and saves over a cycle rather than at a peak.

Signs you should look at this now

If any of these sound familiar, the work above will pay for itself quickly. You changed a supplier this year under pressure and have not been back to review it. You have an onshoring business case on the table built on this year’s freight and last year’s exchange rate. You onshored a product line and distribution cost went up. Your second supplier for a critical item has never received a test order. Your safety stock settings have not changed since before the fuel shock. Or you sell to government and have not worked out what Australian content is now worth in your bids.

How Trace Consultants Can Help

Trace Consultants is an Australian supply chain, procurement and operations advisory firm. We work with manufacturers, importers, retailers and government on sourcing and network decisions, with senior people who have run these processes inside businesses before.

Sourcing strategy and supplier diversification. Our procurement team runs the portfolio sort, builds the landed-cost comparison with the bands and the disruption cost in it, qualifies nearshore and domestic alternatives, writes dual-source contracts with allocation priority, and sorts out this year’s panic suppliers before they renew.

Network design that reflects the new sourcing. Through strategy and network design we model the network with the onshoring moves in it: distribution centre footprint, port of entry for inputs, rail and road at current fuel prices, and the stock positioning dual sourcing needs. We have built the case to open facilities and the case to close them, so we are not attached to either answer.

The finishing step and the inbound flow. Our warehousing and distribution team designs where final-stage processing sits, how inbound materials arrive and are stored, and how the plant and the distribution centres work together.

Planning parameters and inventory. Our planning and operations work resets safety stock and lead times for the new sources, including the backup, and puts the changes into the planning system so they stick.

Owning supply risk. Our organisational design and resilience and risk management teams put a named owner, a decision right and a tested activation plan behind the backup supplier.

Government and Defence. Through our government and defence work we help suppliers work out what Australian content and sovereign capability are now worth in their bids, and help agencies build sourcing strategies that deliver it.

We do this across FMCG and manufacturing and retail, where most of this year’s sourcing moves were made.

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Where to begin

Start with whatever you changed in April. Get the comparison done before the contract renews, while you still have the choice. If there is an onshoring case on the table, test it at 2024 freight and a 0.71 dollar before it goes to the board, and ask whether the finish-here version does the job for a fraction of the capital. And whichever way the sourcing decision goes, put the network model on the same table, because the distribution side is where most onshoring plans quietly give back what the sourcing side gained.

The bottom line

Bringing supply closer is the right instinct for the right products. In most of the businesses we see, it has been done in a hurry, priced at the peak, and never carried through to the network, the planning system or the organisation that has to run it. Finish the emergency. Sort the range. Prefer finishing here to making everything here. Redesign the network to carry it, and give someone the job of owning it.

If you want a plain view of which of your products are worth moving and what your network should look like once they do, we are easy to talk to.

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Container Shipping into Australia: What Happens Next, and Why Exports Matter More Than You Think

It is the first week of November. Your Christmas stock is either on the water or it is late. Your forwarder is quoting a peak season surcharge from 1 November on top of a rate restoration from 15 October, and the vessel you booked three weeks ahead has just been rolled. Your empty containers are sitting in a yard in Laverton or Port Botany waiting for a dehire slot while the shipping line’s detention clock keeps running.

And underneath the week-to-week noise there is a question we hear from Australian importers more and more: have our export markets dried up to the point that shipping lines no longer care about serving Australia competitively?

This article does three things. It sets out where the market actually is as of late October 2026. It tests that export question properly, because it is half right and the half that is wrong matters. And it forecasts where container shipping rates into Australia, capacity and reliability go from here, through peak season, past Chinese New Year and into a 2027 that every major analyst expects to look very different from 2026.

Where the market is right now

Globally, rates are high and being held there deliberately. Drewry’s World Container Index rose 2 per cent to US$4,585 per 40ft container in the week to 22 October, driven by Asia to Europe and transpacific rates, with carriers using blank sailings to hold prices up. That is roughly 74 per cent above where the index sat a year earlier.

The Australia lane has followed, then paused. The Shanghai to Sydney spot rate eased slightly in early October after seven consecutive weekly rises, South East Asia to Australia rates held steady, schedule reliability sits at 49.9 per cent, and port omissions, rollovers and vessel bunching mean delays into Australia remain common even on services that do sail. Australia and New Zealand spot rates retreated 3.8 per cent to US$2,833 per TEU in the first week of October. The pause did not last. ANL published rate restorations on Asia to Australia trades for 15 October and 1 November, Maersk announced a 1 November peak season surcharge on Asia to Oceania dry containers, and space from South East Asia remains restricted on some services into early November.

Capacity is not the constraint people assume. When Far East to Australia rates surged more than 30 per cent within a month in mid-2026 and lines were quoting US$2,000 per TEU, carriers responded by adding capacity to the route, while Port of Melbourne reported container trade up more than 2 per cent year on year in the first quarter and 7 per cent in April alone. The Port of Melbourne handled a record 3.5 million TEU in calendar 2025, its second record year in a row. Australian import demand is growing, and shipping lines follow demand. ‍

What is rising relentlessly is the landside cost. DP World Australia lifted its landside charges from 1 January 2026, defending the increase as underpinning almost $1 billion of private investment in port infrastructure. Melbourne’s VICT announced a 13.8 per cent increase to its landside infrastructure surcharge, to A$161.35 per full container, while the Container Transport Alliance Australia reported chronic gate-in and capacity constraints at empty container parks in Melbourne and Sydney and shipping lines becoming more aggressive on container detention, in some cases billing importers for detention when there was nowhere to dehire the box. The ACCC’s view is that importers and exporters cannot negotiate directly with stevedores or empty container parks and can only respond by switching shipping services, which is why landside charges have risen more easily than the charges stevedores levy on shipping lines.

So the current picture is: rates high and defended by surcharges, reliability at a coin flip, capacity available but lumpy, and landside costs climbing regardless of what the ocean rate does.

Have Australia’s exports dried up, and does it matter to importers?

Here is the theory as we hear it. Export markets have changed in the last two years, China tensions have cut volumes, food and dairy producers are prioritising domestic grocery and food service over export, and so there is less cargo going back to Asia. With a weaker backhaul, carriers have less reason to serve Australia competitively, and importers pay for it. Let us take the pieces in turn.

The export decline is real, and it is in containers

The ACCC’s latest stevedoring report shows full container imports at the five largest ports have grown at an average of 2.7 per cent a year since 2015-16 against 0.9 per cent for exports, and from 2023-24 to 2024-25 full imports rose 1.4 per cent while full exports fell 2.4 per cent, with the growing imbalance creating a build-up of empty containers. At the Port of Melbourne in 2025, about 1.37 million TEU of full imports arrived against roughly 662,000 TEU of full exports, and empties made up 28 per cent of the port’s container trade. Two full boxes in, one full box out, and the difference goes home empty or sits in a park. ‍

But China tensions are not the cause

The timing is backwards. China’s trade restrictions were progressively removed between 2023 and 2026: barley in August 2023, wine in March 2024, lobster in December 2024, and the final ChAFTA tariff elimination on dairy from 1 January 2026, with Australia exporting $188.7 billion to China in 2024-25. The channels are open. What has changed is what China wants to buy, and what Australia has to sell.

Wine is the clearest case, and it is not about politics. Australian wine exports fell 7 per cent in value to $2.30 billion and 6 per cent in volume to 598 million litres in the year to June 2026, driven by weaker demand in mainland China, the UK and the US, against a decade-long decline in global wine consumption. Wine Australia describes the Chinese wine market as one-third the size it was five years ago, with the post-tariff restocking surge now over. ‍

Dairy is where your theory is strongest. Rabobank describes Australia’s dairy trade as slowly trading places: export volumes falling sharply and imports rising, driven by lower domestic milk production, an erosion of export competitiveness and more favourable domestic market returns changing the product mix. Dairy Australia’s mid-year outlook forecasts milk production to fall 2 per cent in 2026-27 as fuel and fertiliser prices squeeze feed, notes the Australian dollar has strengthened considerably from US$0.64 in April 2025, and expects the Middle East conflict to add caution for farmers and consumers. Processors are prioritising cheese, forecast at 175,000 tonnes of exports in 2026, while milk powder production and exports stay under pressure because there is not enough milk. Fluid milk exports, half of which went to China in 2021 and 2022, have fallen an estimated 61 per cent as China’s own production expanded. ABARES expects the value of dairy exports to fall a further 5 per cent to $3.4 billion in 2026-27 on lower volumes. A shrinking milk pool, a stronger dollar and a domestic market that pays better: processors are choosing the grocery and food service customer down the road over the powder buyer in Guangzhou, and they are right to.

Meat is mixed. Beef exports rose 16 per cent year on year in the first quarter of 2026 with shipments to China up 32 per cent, and MLA forecasts a record 1.57 million tonnes for the year. Sheep meat went the other way, down 16 per cent, with China down 24 per cent and volumes to the Middle East and North Africa down 36 per cent because the US-Iran conflict made air freight to the region limited and expensive. By July, sheep meat shipments to China were 35 per cent below the previous year and 24 per cent below the five-year average.

So the honest diagnosis is this. Containerised exports are shrinking and shifting toward higher-value, lower-volume product. The causes are China’s own demand and self-sufficiency, a global decline in wine drinking, the Middle East conflict closing the Gulf as an air and sea market, a dairy herd that keeps getting smaller, a currency that has made Australian product dearer, and landside stevedoring charges that some agricultural exporters told the ACCC had become higher than their ocean freight rates and were undermining their ability to compete internationally. Tensions with China are the one explanation the data does not support.

Does a weak backhaul make Australia a less attractive lane?

In cost terms, yes. A shipping line prices the round voyage. Australia is a headhaul import trade: the money is made bringing full boxes south. Export cargo on the way back is low-rate agricultural product, but it does something valuable. It pays for the container’s trip home. Every full export box that disappears becomes an empty that has to be stored, handled and shipped back at the line’s cost. More empties per round voyage means a higher cost base per import box, and a stronger incentive for carriers to defend import rates with surcharges and blank sailings.

In capacity terms, no. Shipping lines deploy ships where the headhaul pays, measured against the alternatives. Australia’s import demand is growing. When rates jumped in June, lines added ships. What actually pulls capacity away from Australia is other trades paying more: Drewry’s intra-Asia index hit its sixth consecutive record in early October at 212 per cent above a year earlier, and Shanghai to Los Angeles sits above US$8,000 per 40ft. Those are the lanes competing for tonnage with Australia this quarter, and in 2027 the competition reverses, as the next section explains. ‍

Where the weak backhaul really lands is on the wharf. The empties your exporters are no longer filling are the empties clogging the parks in Melbourne and Sydney, the empties you cannot dehire inside your free time, and the detention invoices that follow. The export decline is an importer’s problem, just not in the way the theory says. It arrives as landside cost and dehire pain, not as a shortage of ships.

One more consequence to watch: service quality rather than quantity. When the backhaul thins and the import volume is still growing, the economic answer for a carrier is often fewer direct services and more transhipment through Singapore, Port Klang or Tanjung Pelepas, particularly for Adelaide, Fremantle and Tasmania. You still get capacity. You get it with a transhipment, a longer transit and another place for your box to miss its connection.

What happens from here

Forecasting container shipping is a humbling business, so treat the following as three horizons with the things that could break them, not as a promise.

Now to Chinese New Year (17 February 2027). Expect rates into Australia to be held up rather than to rise sharply. The restorations and the 1 November peak season surcharge are already in the market, and carriers will keep using blank sailings to manage space through the pre-Christmas and pre-CNY rush. Vessel bunching is worst at Port Botany and Melbourne from October to December, when both run near capacity and any weather disruption cascades, with VBS slot shortages at peak terminals and empty container parks periodically refusing redeliveries. Reliability stays near 50 per cent. Empties and detention get worse before they get better. Air freight stays firm, with global rates 27 per cent above a year ago. If your Christmas and January stock is not already booked, you are now paying spot and hoping. ‍

2027: the market turns, and it turns in the importer’s favour. Drewry’s October outlook warns of growing overcapacity in 2027 and 2028, with fleet growth of 8.8 per cent in 2027, 12.1 per cent in 2028 and 10 per cent in 2029, contract rates expected to decline in 2027, and new deliveries alone adding about 2.3 million TEU of effective capacity next year. The end of Red Sea diversions could release a further 1.6 million TEU of effective capacity in 2027, and Drewry expects lower bunker costs to add to the competitive pressure. Sea-Intelligence reports 70 to 80 per cent of Asia to Mediterranean headhaul capacity already back through the Red Sea, with lines returning to Suez well ahead of Drewry’s projected timeline. The orderbook stands at about 16.2 million TEU, 46.5 per cent of the active fleet, the highest ratio since 2009. Xeneta’s view is that unless several adverse events coincide, the 2027 negotiation season tilts toward cargo owners. Sea-Intelligence expects cyclical overcapacity to peak in 2027 at a level comparable to the 2016 rate wars.

For Australia specifically, overcapacity arrives as cascaded tonnage. When the big east-west trades cannot absorb new ships, mid-sized vessels get pushed onto secondary trades, and Australia is the classic secondary trade. Our expectation is more capacity and lower base rates on Asia to Australia from around the second quarter of 2027, once the post-CNY lull and the first wave of 2027 deliveries overlap. Three things will not fall with the base rate: landside charges, detention, and bunker-linked surcharges while the Strait of Hormuz remains unreliable. Drewry also warns that port congestion is unlikely to improve in 2027, because disruptions can rapidly place pressure on port operations even with more ships. Expect cheaper ocean freight and no better reliability. Carriers will also keep using blank sailings to defend the lane even in a glut, so the capacity will be real but lumpy.

What could flip it. BIMCO’s September outlook puts demand growth at only 0.5 to 2.5 per cent if the Strait of Hormuz stays effectively closed, and notes that a full return to Suez routing could lower ship demand by about 10 per cent. A serious escalation in the Gulf keeps bunker costs high and absorbs ships. A renewed Red Sea closure reverses the capacity release. A strong La Niña summer or a bad typhoon season removes effective capacity for weeks at a time. Industrial action at Australian terminals, which has a long history, would do the same. And a sharp move in the Australian dollar changes the export side faster than anything above. None of these changes the direction for 2027. Any one of them changes the timing.

What importers should do now

Protect peak, then stop paying for it. Book three weeks ahead, prioritise the SKUs that make Christmas, and hold a short buffer on anything with a transhipment in its routing. Then plan to unwind those buffers after Chinese New Year rather than carrying peak-season inventory into a softer market.

Do not lock long fixed rates at 2026 levels. If you have a contract renewal in the next six months, keep the tenor short or index-link it to a published benchmark with a reset. The market is telling you, in every forecast, that your position improves through 2027. A three-year fixed-rate deal signed in November 2026 is a gift to the carrier.

Go to market in the second quarter of 2027, properly. That is when cascaded capacity, lower bunker costs and the post-CNY lull overlap. Build your lane volumes, service levels, free time and equipment needs now so you are ready to tender when the market tilts. Ask for free time and equipment guarantees, not just rates. Put more than one port of discharge in scope. Decide whether you contract directly as a beneficial cargo owner or through a forwarder, and if through a forwarder, make the carrier allocation and surcharge pass-through transparent.

Treat the landside as its own contract. Audit terminal access, infrastructure, notification and detention charges on your invoices since January. Build a dehire plan with your transport operator that uses off-peak slots and, where it exists, a second empty container park. Dispute detention where the park would not accept the box, and keep the evidence. Where you have exporters nearby, explore reusing your import empties for their export loads: it cuts your dehire cost and their equipment cost, and it is the one practical way to make Australia’s trade imbalance work for you.

Use the shift to think about ports. If your Perth or Adelaide cargo is landed in Melbourne and trucked across the country at today’s diesel prices, a direct or transhipment call into Fremantle or Adelaide may now be cheaper on a landed basis, even with a longer transit. That is a network design question, and 2027’s capacity glut is the right moment to ask it.

If you export, the flip side applies. Backhaul capacity will be cheap and available. Lock export rates in 2027 with the same discipline importers are using to stay short now, and spend your negotiating energy on the landside charges, which are the part of your cost that will not fall.

How Trace Consultants Can Help

Trace Consultants is an Australian supply chain, procurement and operations advisory firm. We work with importers, exporters and the precincts and distribution networks that depend on container flows, with senior people who have run these processes before.

Ocean and landside go-to-market. Our procurement team runs freight tenders built for a turning market: lane and volume analysis, index-linked rate structures, free time and equipment terms, port options, carrier and forwarder evaluation, and the invoice audit that recovers overcharged surcharges and detention. We time the tender to the market, not the calendar.

Container flow and distribution. Our warehousing and distribution practice designs the landside: dehire planning, empty reuse with nearby exporters, transport operator contracts, and the DC capacity to absorb peak-season arrivals without storage penalties.

Inbound planning and inventory. Through planning and operations we set peak-season buffers by SKU and route, plan the unwind after Chinese New Year, and build the lead-time variability into your replenishment rather than into a blanket safety stock.

Port and network design. Our strategy and network design work models port of discharge, transhipment versus direct call, and DC location with current freight, fuel and landside costs in the model, so the 2027 shift becomes a redesign rather than a windfall you pocket once.

Resilience that is measured. Our resilience and risk management team tests what a Hormuz escalation, a Red Sea re-closure or terminal industrial action does to your service and cost, and what to pre-arrange now.

We do this across retail, FMCG and manufacturing and the large precincts where inbound goods are the operation.

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Where to begin

In the next two weeks, get the Christmas and January bookings confirmed and build the dehire plan with your transport operator. Pull every landside and detention charge since January into one view.

In the next month, map your contract renewal dates against the forecast. Anything renewing before June 2027 goes short or index-linked. Start the lane and service-level data build for a second-quarter tender.

In the next quarter, run the tender when the market tilts, re-cut inventory buffers after Chinese New Year, and model the port and DC options with 2027 rates and today’s diesel. Take the three results to the executive team together.

The bottom line

The market is expensive and unreliable now, and every credible forecast says it gets cheaper and no more reliable in 2027. Australia’s export decline is real, but it is a story about China’s demand, a shrinking milk pool, a stronger dollar and a Gulf market closed by war, not about tensions, and it reaches importers through empties and landside cost rather than through a shortage of ships. The businesses that come out ahead will stay short on ocean contracts, go to market in the second quarter of 2027, and fix the landside and the network, which are the parts of the cost that no capacity glut will fix for them.

If you want a plain view of where your inbound freight, landside and network exposure sits and what it is worth fixing, we are easy to talk to.

Explore our warehousing and distribution services →

Speak to an expert at Trace →

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