Waste & Circularity in the Supply Chain

Grocery Supply Chains and the Food and Grocery Code: What It Means

Australia's grocery sector has been under more scrutiny over the past two years than at almost any time in recent memory. An ACCC inquiry into the supermarkets, a high-profile independent review of the code that governs supplier dealings, and sustained cost-of-living attention have all converged on the same set of questions. Most of the public conversation has been about prices on the shelf. But behind those headlines sits a supply chain story that matters just as much and gets far less attention: the relationship between the major grocers and the thousands of suppliers who feed them, and the terms, costs, and supply chain procedures that govern it.

That relationship is now regulated in a way it was not before. The Food and Grocery Code of Conduct, long a voluntary arrangement, became mandatory and penalty-backed from April 2025, and as of April 2026 it applies to every grocery supply agreement with the large retailers and wholesalers regardless of when it was signed. For suppliers and for the major grocers alike, how they deal with each other commercially and operationally is now subject to enforceable rules. And because what the code governs, supply agreements, trading terms, payments, ranging, and supply chain procedures, are supply chain and commercial decisions, this is as much a supply chain issue as a legal one.

This article is for grocery suppliers, retail and wholesale operators, and the supply chain and commercial leaders on both sides who need to understand what has changed and what it means operationally. It stays evenhanded and focused on the supply chain implications rather than the politics of grocery pricing, and it stays in the supply chain lane: the commercial economics, supplier relationships, and operating model, with the legal interpretation of the code left to legal advisers.

What has actually changed

Two connected developments have reshaped the landscape.

The first is the ACCC's supermarkets inquiry, directed by the government and running through 2024 and into 2025. It examined a sector that is, on the ACCC's own characterisation, an oligopoly: Woolworths and Coles together account for around 67 per cent of national supermarket retail sales, with Aldi at around 9 per cent and Metcash supplying the independents at around 7 per cent. The inquiry gathered extensive evidence, including from suppliers at roundtables across rural and regional Australia, many of whom said they felt they were receiving unsustainably low prices and had little choice but to accept unfavourable terms given the concentration of buyers. It is worth noting, in fairness to the full picture, that the inquiry also found food and non-alcoholic beverage prices had grown by around 23 per cent over the five years to mid-2024, broadly in line with inflation across the rest of the economy, a reminder that the supply chain story is more nuanced than a simple narrative in either direction.

The second, and more operationally consequential, is the Food and Grocery Code of Conduct. Following a review led by Dr Craig Emerson, the code was remade and made mandatory from 1 April 2025. It now applies automatically, with no opt-out, to large grocery businesses with more than $5 billion in annual revenue from their supermarket or grocery wholesaling operations, which captures Coles, Woolworths, Aldi, and Metcash. Suppliers to those businesses are automatically protected. The code requires the large grocers to have written supply agreements, to act in good faith, to refrain from retribution against suppliers who exercise their rights, and to follow rules on ranging, pricing, supplier payments, and supply chain procedures. It is backed by significant civil penalties, the ACCC can issue infringement notices and pursue court action, and it provides for dispute resolution through a Code Mediator, who can bind a supermarket to pay compensation of up to $5 million, and through arbitration. Importantly, a transition period for pre-existing agreements ended on 1 April 2026, so all code requirements now apply to all grocery supply agreements, regardless of when they were entered into.

In short, the rules governing how Australia's largest grocers deal with their suppliers have moved from voluntary good intentions to mandatory, enforceable obligations.

Why this is a supply chain story

It is easy to file this under legal compliance and leave it there. That misses the point. What the code regulates is the operating interface between the grocers and their suppliers: the supply agreements, the trading terms, the payment arrangements, the ranging and listing decisions, and the supply chain procedures by which goods actually flow. Those are supply chain and commercial matters, not merely legal ones.

The buyer-power dynamic the inquiry surfaced is, at its heart, a question about who bears cost and risk in the grocery supply chain. When a dominant buyer can impose terms, change supply chain procedures, shift costs, or vary arrangements at will, the risk and cost migrate onto the supplier, often a smaller business or a primary producer with little leverage. The code is an attempt to rebalance that, by setting rules of fair dealing and giving suppliers protections and recourse. Understanding and responding to it, on either side, is therefore a supply chain and commercial capability as much as a legal one.

What it means for suppliers

For suppliers to the major grocers, the code provides a meaningfully stronger floor. There must be a written supply agreement. The grocer must act in good faith. Agreements cannot be varied unilaterally without consent. Suppliers are protected from retribution for exercising their rights. A large grocer cannot require a supplier to materially change their supply chain procedures mid-agreement without giving reasonable written notice or compensating the supplier for the net costs of a failure to do so. Supplier intellectual property in branding and packaging must be respected. And there are real avenues, mediation, the Code Mediator, and arbitration, for suppliers to pursue when things go wrong.

These are genuine protections, and suppliers should understand and use them. But here is the practical insight that matters most: protections do not change the underlying commercial reality of supplying a highly concentrated market. The code gives suppliers a stronger floor; it does not give them pricing power or guarantee profitability. Real resilience for a supplier still comes from the strength of its own supply chain and commercial position, knowing its true cost-to-serve by customer and channel, running an efficient and reliable operation, delivering high service performance, and offering value the retailer cannot easily replace. A supplier that understands its own economics precisely, and can demonstrate efficiency and reliability, negotiates from a far stronger position than one relying on the code alone. The suppliers who will thrive are those who use the new protections and get their own supply chain and cost economics genuinely right.

What it means for the major grocers and wholesalers

For the large retailers and wholesalers captured by the code, the change is operational, not just legal. How their buying and category teams deal with suppliers, how they communicate changes to requirements, pricing, and promotions, how they vary supply chain procedures, how they document agreements, and how they keep records all now have to be done within the code, with significant penalties for getting it wrong.

That has real implications for the operating model. Supplier management processes, the way supply chain procedure changes are planned and communicated, the discipline around written agreements and notice periods, and the governance over how buyers deal with suppliers all need to be fit for a mandatory, enforced code. Requiring a supplier to change supply chain procedures, for instance, now carries a notice or compensation obligation, which means such changes have to be planned and managed deliberately rather than imposed at will. This is a process, capability, and supplier relationship management challenge as much as a compliance one, and the grocers that build it into how they actually operate, rather than treating it as a legal overlay, will manage both the risk and the supplier relationships better.

The bigger picture: grocery supply chains under structural scrutiny

Step back, and the code is one part of a broader structural scrutiny of grocery supply chains. The concentration of the sector, the buyer-power concerns, the sustainability of the prices paid to farmers and fresh-produce suppliers, the complexity of perishable supply chains, and the cost-of-living pressure on consumers are all pushing in the same direction: toward grocery supply chains that are more transparent, fairer in how cost and risk are shared, and more genuinely efficient.

That last point is the one both sides have a shared interest in. When a supply chain is genuinely efficient, lower in waste, better in forecasting and replenishment, more reliable end to end, there is more value to share and less pressure to extract margin from whichever party is weaker. The healthiest response to the scrutiny, for grocers and suppliers alike, is not just to comply with the code but to make the underlying grocery supply chain work better, through better demand planning, inventory, and replenishment, better cost-to-serve understanding, and more efficient distribution. A more efficient supply chain is the most durable answer to a fairness problem.

The Australian context

This is a distinctly Australian situation. The concentration of grocery retailing is unusually high, which is what gives the buyer-power question its force. Many of the suppliers most affected are in regional and rural Australia, including primary producers for whom the terms of trade with a dominant buyer are existential. The cost-of-living politics keep the sector under sustained public and regulatory attention. And the regulatory machinery is now live: the code is mandatory, the penalties are real, the ACCC is enforcing, and as of April 2026 the transition is complete, so every relevant supply agreement is captured. For anyone operating in Australian grocery supply chains, on either side, this is the current operating environment, not a future prospect.

How Trace Consultants can help

At Trace Consultants, we work on the supply chain and commercial side of this for both suppliers and grocery businesses. The legal interpretation of the code sits with legal advisers; the cost economics, supplier relationships, and operating model sit with the supply chain, and that is where we work.

For suppliers, we strengthen the commercial and supply chain position. We model your true cost-to-serve by customer and channel, improve supply chain efficiency and service reliability, and help you understand and present your economics, so you negotiate from strength and build resilience that does not depend on the code alone. This draws on our retail and FMCG, strategy, and cost-to-serve work.

For grocers and wholesalers, we build the supplier operating model. We help design the supplier management processes, supply chain procedure change management with proper notice and cost discipline, and procurement and supplier relationship practices that work within the code as a matter of how the business actually operates.

For both sides, we make the underlying supply chain more efficient. Through better planning, inventory, and replenishment and more efficient distribution, we help create the genuine efficiency that gives both parties more value to share and reduces the pressure that fuels the conflict in the first place.

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Where to begin

If you supply the major grocers, start by understanding your own economics precisely: your true cost-to-serve by customer and channel, your service performance, and where you are genuinely efficient or not. That clarity, alongside understanding your protections under the code, is what lets you engage from a position of strength rather than dependence.

If you are a large grocer or wholesaler, look at how your buying and supplier-management processes actually operate against the code, particularly how supply chain procedure changes, communication, and agreements are handled, and build the discipline into your operating model rather than bolting compliance on afterward.

And on both sides, treat the efficiency of the underlying grocery supply chain as the shared prize. The Food and Grocery Code has changed the rules of how Australia's largest grocers and their suppliers deal with each other, moving the relationship from voluntary to enforceable. But the most durable response, for everyone, is a grocery supply chain that genuinely works better: more efficient, more reliable, and more transparent about where cost and value actually sit. That is what turns a regulated, sometimes adversarial relationship into one that can actually hold.

This article is general information and does not constitute legal advice. Businesses should confirm their specific obligations under the Food and Grocery Code of Conduct with their legal advisers.

Related reading: Procurement · Strategy & Network Design · Demand Planning, Inventory & Replenishment

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Supply Chain Transformation in Australian Government

Australian government supply chains are under more pressure, and more active reform, than at almost any point in the last decade. The forces are stacking on top of one another: a procurement framework that changed materially in late 2025, a sustained national focus on sovereign capability and resilience, the largest defence investment in a generation, and frontline services in health, aged care, and emergency response being asked to deliver more with budgets that will not stretch to match demand. Each of these is a supply chain question before it is anything else.

For the agencies and departments in the middle of it, this is a genuine transformation moment, not a tidy-up. The way government plans, sources, moves, sustains, and stocks the goods and services it relies on is being reshaped, and the organisations that treat that as a structural shift rather than a compliance exercise will be the ones that come out ahead.

This article is for public sector leaders, programme owners, and defence and agency executives thinking about how to transform their supply chains. It covers what transformation actually means in a government context, the forces driving it right now, why it is harder in the public sector than in the private, what good looks like, and how to deliver it without falling into the traps that catch so many public sector programmes.

What supply chain transformation means in government

It helps to be clear about scope, because in government the term gets used narrowly. Supply chain transformation is often reduced to procurement reform, how the agency buys, which contracts it lets, how it complies with the rules. Procurement matters enormously, and we will come to the reforms, but it is one element of a much larger picture.

A government supply chain is the full end-to-end system that gets capability and services to the point of need. For defence, that is sustainment, logistics, and the readiness of the force. For health and aged care, it is the flow of consumables, equipment, and the workforce that delivers care. For emergency services and policing, it is the evidence, equipment, and logistics that keep a statewide network functioning. Transformation touches all of it: network and facility design, inventory and sustainment, workforce planning and rostering, technology and data, supplier strategy, and resilience against disruption. Procurement sits inside that system, not above it.

Getting this scope right matters because the most expensive failures in government happen when one part is optimised in isolation. A procurement reform that lowers unit price but lengthens lead times, or a new facility that looks efficient on paper but ignores how the workforce actually operates, creates problems that cost far more than the saving. Transformation has to be designed across the whole chain.

The forces driving transformation now

Several pressures are converging, which is what makes this a transformation moment rather than business as usual.

Procurement reform is live and material. The Commonwealth Procurement Rules changed on 17 November 2025, and the changes are not cosmetic. The threshold for non-corporate Commonwealth entities on non-construction procurement rose from $80,000 to $125,000, the first lift to that threshold in a long time. More significantly, the rules now require non-corporate entities to prioritise Australian businesses, inviting only Australian businesses to tender for many non-panel procurements below the threshold, and only small and medium enterprises in certain cases once Indigenous Procurement Policy priorities are met. Ethical conduct has become an explicit factor in the value-for-money assessment, with officials now expected to make reasonable enquiries into a supplier's labour, work health and safety, and environmental practices. Alongside the rules, a publicly searchable Supplier Portal is being rolled out, identifying whether a supplier is an SME, an Australian business, an Indigenous business, or women-owned, and it becomes available to all businesses from July 2026.

The practical effect is that procurement is being used more deliberately as an economic and social lever, prioritising local industry, SMEs, Indigenous businesses, and ethical supply chains, while still anchored on value for money. For agencies, that means supplier strategies, market approaches, and supply chain transparency all need to be reconsidered, not just the paperwork.

Sovereign capability and resilience are now standing priorities. The disruptions of recent years, followed by sustained geopolitical volatility, have moved supply chain resilience from a periodic concern to a permanent one. Government is increasingly focused on the supply chains that matter most to national interest, fuel, critical minerals, pharmaceuticals, food, defence materiel, and on understanding dependencies several tiers deep rather than just at the first supplier. Friendshoring, nearshoring, and sovereign manufacturing are reshaping network design decisions that used to be made on cost alone. We have written about this shift in the context of navigating global trade tensions, and it is now embedded in how government thinks about supply.

Defence sustainment is the quiet half of the investment. The Australian Defence Force runs one of the country's largest and most complex supply chains, with billions invested annually in procurement, sustainment, and logistics, and that performance is directly tied to operational readiness and national security. The headline investment goes to acquisition, but acquisition wins battles and sustainment wins wars, as we have argued in our work on defence supply chains. Transforming the sustainment supply chain, spares, MRO, inventory, and the n-tier supplier base behind it, is where a great deal of the real value sits.

Frontline service delivery is straining the operational supply chain. Health, aged care, and emergency services are facing rising demand against constrained budgets, and much of the pressure lands on operational supply chains: the consumables, equipment, logistics, and workforce that keep services running. Doing more with the same requires the supply chain to work harder and smarter, which is a transformation problem.

Technology and data are finally usable. N-tier visibility, AI-enabled forecasting, scenario modelling, and analytics platforms have matured to the point where they can genuinely improve government supply chains, provided they are deployed on top of sound process rather than as a substitute for it.

Why it is harder in government than in the private sector

Supply chain transformation is difficult anywhere. In government it carries an extra layer of constraint that private sector playbooks do not account for, and ignoring that is why imported corporate approaches so often stall.

Probity and accountability sit over everything. Decisions must be defensible, transparent, and compliant with the procurement framework, which rightly limits the speed and flexibility available. Budget cycles are annual and often siloed, which makes multi-year transformation investment genuinely hard to fund and sustain. Legacy systems and entrenched processes are common, and replacing them is slow. Risk aversion is structural, because the consequences of a visible failure are political as well as operational. And machinery-of-government changes can reshape responsibilities midway through a programme.

None of this is an argument against transformation. It is an argument for transformation designed specifically for the public sector environment, with business cases that survive scrutiny, change approaches built for risk-averse cultures, and delivery that respects probity rather than treating it as an obstacle.

What good transformation looks like

The principles that separate successful government supply chain transformation from the programmes that disappoint are consistent.

It is strategy-led, not technology-led. The starting point is the operational and policy outcome the supply chain exists to deliver, not the platform someone wants to buy. Technology is sequenced in to accelerate a sound process, never to substitute for one.

It is built on a business case that withstands scrutiny. Public investment demands a defensible case, complete on costs, honest on benefits, clear on risk, and proportionate to the scale of the decision. This is the discipline that gets transformation funded and keeps it funded, and it is the same rigour the government's own investment frameworks demand.

It sees the whole chain, several tiers deep. Real visibility means going beyond the first supplier to map dependencies, choke points, and concentration risk through the n-tier base. For resilience and sustainment alike, the risks that matter usually sit below the surface.

It designs resilience and sovereignty in, rather than bolting them on. Network design, supplier strategy, and inventory decisions now have to weigh resilience and sovereign capability alongside cost, because the cost of fragility has been demonstrated too many times to ignore.

It embeds capability rather than dependency. The best transformation leaves the agency more capable, with its people equipped to run the new model, not permanently reliant on external support to operate what was built.

And it is delivered with change management built for the public sector. Stakeholder engagement, probity, and a culture that is necessarily cautious all have to be worked with, not around.

The Australian context

The structure of this country sharpens all of it. Australia's geography, long distances, dispersed population, and remote operations, makes logistics and network design materially harder and more expensive than in compact markets, and that is before the demands of operating across a continent and a region. The trade exposure is real, with a small number of partners accounting for a large share of both imports and exports, which is precisely why sovereign capability and resilience have moved up the agenda. And the defence environment, in an era of significant capability investment and close alliance commitments, places sustainment and supply chain readiness at the centre of national security rather than the periphery.

This is the environment in which Australian government supply chains are being transformed, and it rewards approaches grounded in the local reality rather than imported wholesale.

How Trace Consultants can help

At Trace Consultants, supply chain transformation for government and defence is core to what we do, and we bring credentials to it that are genuinely public-sector, not borrowed from corporate work. Our government and defence practice combines deep supply chain expertise with direct experience inside the system, including leadership that has served as a Director in the Office of Supply Chain Resilience within the Department of the Prime Minister and Cabinet, and practitioners with Australian Defence Force logistics backgrounds. Our team holds defence clearances and we are an approved provider on government panels, which means we can engage quickly and work on sensitive and classified programmes.

We transform across the whole chain, not just procurement. From network and facility design through sustainment, inventory, workforce planning, and resilience, we work end-to-end, so improvements in one part do not create problems in another. Our strategy and network design work anchors transformation in the operational outcome the supply chain exists to deliver.

We navigate the new procurement environment. We help agencies translate the reformed Commonwealth Procurement Rules into supplier strategies and market approaches that prioritise Australian business, SMEs, and ethical supply chains while still delivering value for money. Our procurement practice links procurement to supply chain strategy rather than treating it as a standalone compliance task.

We map risk and build resilience several tiers deep. Using n-tier analysis, scenario modelling, and contingency planning, we uncover the dependencies and choke points that first-tier views miss, and design the sovereign capability and resilience that national interest now demands. This is the work behind our perspective on building supply chain resilience for government.

We deliver transformation that survives the public sector environment. We build business cases that withstand scrutiny, change approaches suited to risk-averse cultures, and capability that stays with the agency after we leave.

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Where to begin

If you are an agency leader weighing transformation, start with the outcome and the end-to-end picture rather than the part that is easiest to point at. Map your supply chain beyond the first tier to see where the real risk and cost sit, and be honest about which pressures, procurement reform, resilience, sustainment, service-delivery strain, are most material to your mandate.

From there, build a business case proportionate to the decision, sequence technology behind sound process, and design the change for the environment you actually operate in rather than the one a corporate playbook assumes. Above all, treat probity and accountability as design parameters, not obstacles, because a transformation that cannot be defended will not be sustained.

Government supply chains are being reshaped by forces that are not going away. The agencies that approach this as a structural transformation, designed for the public sector and grounded in the Australian context, will deliver better services, stronger resilience, and better value for the public money behind them. That is the prize, and it is well within reach.

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Airport Back-of-House Logistics: A 2026 Guide for Australian Airport Operators and Tenants

The front-of-house experience at an Australian airport is the part the public sees: check-in, security, retail, food and beverage, lounges, boarding. The back-of-house is the part that makes the front of house possible. Catering trucks delivering meals into airside, waste containers moving in the opposite direction, retail and F&B replenishment to outlets across the terminal, cleaning consumables, linen for lounges and crew rest areas, ground handling supplies, fuel, maintenance parts, and the security screening that every airside-bound item must pass through. When the BOH operating model works, no passenger ever notices it. When it fails, the front of house fails with it.

Airport BOH is also one of the most under-discussed parts of the Australian aviation system. The capital expansion programme across the four ACCC-monitored airports (Sydney, Melbourne, Brisbane and Perth) is now reported by the ACCC at around $20 billion of proposed major infrastructure spend over the next decade. Western Sydney International opens in late 2026 with capacity to handle 10 million passengers initially and a long-term design horizon of 82 million by the 2060s. Melbourne Airport announced a $4.5 billion terminal expansion in March 2026. Brisbane is delivering its $5 billion Future BNE programme. Perth is progressing a new terminal. Almost every dollar of that capital programme has BOH operating model implications, and most of them are still being worked through.

This guide is the practitioner's framework for airport BOH logistics in Australia in 2026. It covers what airport BOH actually includes, why it is uniquely complex compared with other major-venue BOH operations, the strategic decisions facing operators and major tenants under the current capacity expansion programme, the demand modelling discipline that determines whether new terminals open with a viable operating model, the workforce and security architecture, and the common failure modes that the new generation of terminal projects can avoid.

What airport back-of-house actually covers

Airport BOH operations break into three connected zones, each with its own operating model, regulatory regime, and security framework.

Landside BOH. Everything that supports terminal operations outside the security cordon. Goods inwards docks, central stores, food and beverage consolidation, retail replenishment to landside outlets, waste consolidation, recycling and organics flows, cleaning consumables, linen, ground transport services, and the back-of-terminal logistics for landside concessions. Landside BOH has standard logistics characteristics but with the volume, peak shape, and 24/7 operating rhythm of an airport.

Airside BOH. Everything that crosses the security boundary into the secure zone. In-flight catering trucks, airside F&B outlet replenishment, airside retail (duty-free, news, convenience), lounge supplies, crew supplies, cleaning and consumables, waste being moved off airside, and the supply chains that support ground handling, refuelling, and aircraft turnaround. Every airside-bound item must be security-screened. Every airside operator must hold appropriate ASIC clearance. Every vehicle movement is governed by airside driving authorisations and route control.

Cross-cutting infrastructure. Loading docks (typically multiple, dedicated to landside and airside flows), screening facilities for goods, storage rooms, waste compactors, dock management systems, and the IT and operational systems that govern access, scheduling, and traceability across both zones.

The point of this segmentation is that airport BOH is not one operating model. It is two operating models with a security boundary between them, plus the infrastructure that connects them. Designing the two without recognising they are different operating problems is one of the most common BOH design failures we see across major-venue operations.

Why airport BOH is uniquely complex

Other major venues (stadiums, hospitals, integrated resorts, shopping precincts) all have demanding BOH operating environments. Trace's existing analysis on hospital and stadium BOH covers many of the recurring patterns. Airport BOH differs from all of them on five dimensions.

Security screening of every airside-bound item. Every pallet, every roll cage, every catering trolley crossing the security boundary must be screened. The screening regime has progressively moved from X-ray to 3D CT scanning at major airports for both passenger and goods security, with implications for throughput, layout, equipment, and the timing of deliveries. A screening process that adds even small amounts of cycle time per movement can cascade into significant peak-period congestion.

24/7 operations with concentrated demand peaks. Domestic and international flight schedules produce peaks that are predictable but acute. Catering uplift before international departures, retail replenishment for morning departures, F&B replenishment to support arrival hours, waste flows in the opposite direction. The operating model must absorb the peaks without over-resourcing the trough hours.

Multiple tenants and operators. A typical Australian capital city airport hosts multiple ground handlers, multiple in-flight caterers, multiple retail concessionaires, multiple F&B operators, multiple lounge operators, and multiple cleaning and waste contractors. The airport operator does not directly control most BOH movements. It governs them through tenant agreements, operating protocols, and shared infrastructure.

Airside permits and driving authorisations. Vehicles operating airside must hold appropriate authorisations, follow defined routes, and operate within structured movement protocols. Driver training, ASIC clearance, vehicle compliance, and route adherence all sit inside the BOH operating model.

Cold chain and food safety at scale. International catering uplift involves the largest single cold-chain flows on most airport sites. Cold-chain integrity, food safety compliance, and traceability are non-trivial operational requirements rather than peripheral concerns.

The combined effect is that airport BOH is one of the most demanding operating environments in Australian logistics, and the design discipline required to make it work is correspondingly higher.

The 2026 Australian context: a generational capacity expansion

The current Australian airport capacity expansion programme is the largest the country has seen in a generation. The implications for BOH operating models are material at every airport touched by the programme.

Western Sydney International opens in late 2026 with initial capacity of around 10 million passengers per year and a staged expansion path that ultimately accommodates up to 82 million passengers and four terminals on a 24/7 operating basis. WSI is the first major Australian airport to be designed from a clean sheet in over 50 years. The BOH design choices being embedded today shape the operating model for decades.

Melbourne Airport announced a $4.5 billion terminal expansion in March 2026, including five additional wide-body gates, expanded check-in, security and lounge areas, a new $500 million tote-based baggage handling system increasing capacity to over 4,000 bags per hour, and a planned third runway in 2031. Each expansion phase has corresponding BOH implications: new outlet locations, new airside catering volumes, new screening throughput requirements, new waste flows, and new vehicle movement patterns.

Brisbane Airport is progressing its $5 billion Future BNE transformation across international and domestic terminals, with a third terminal planned.

Perth Airport is delivering the new terminal and runway development reported by the ACCC as part of the $20 billion sector capital programme, with completion timelines extending into 2031.

Sydney Airport has proposed integration of T2 and T3 domestic terminals as part of its programme.

The ACCC has reported that the four largest airports invested $1.5 billion in aeronautical facilities in 2024-25, a 43.6 per cent increase on the prior year, with collective proposed major infrastructure spend approaching $20 billion over the next decade. Almost every project in that pipeline reshapes BOH operations directly or indirectly.

For airport operators, major tenants (airlines, ground handlers, caterers, concessionaires), and the design and construction partners delivering the expansion programme, the BOH operating model is not a peripheral consideration. It is one of the central design questions that determines whether the new infrastructure delivers its operational promise.

The strategic BOH decisions facing operators

Underneath the construction programme, every Australian airport operator now faces a set of strategic BOH decisions. These are not tactical fit-out decisions. They are operating model choices with twenty-year implications.

Centralised versus distributed stores. Concentrating receiving, screening and storage in a single landside facility versus distributing across multiple terminal-adjacent stores. Centralisation reduces footprint and improves screening throughput but increases internal vehicle movements and adds dependency on internal logistics flows. Distribution reduces internal movements but multiplies fixed infrastructure cost. The right answer varies by airport scale, terminal geometry, and tenant mix.

Operator-run versus tenant-managed BOH. How much of the BOH operation the airport operator runs directly versus how much sits with tenants. Catering, retail, F&B, cleaning, and waste are most commonly tenant-managed under operating protocols. The airport operator's role is governance, infrastructure, scheduling, and exception management. The boundary between operator and tenant responsibilities is the most consequential operating model decision in any new terminal project.

Screening capacity and configuration. Whether screening is centralised in a single facility, distributed across multiple dock locations, or implemented in a hybrid model. The cycle time, equipment type (X-ray, 3D CT, EDS for explosives), and operational protocol all interact with the broader BOH flow design. New 3D CT capability adds throughput and reduces secondary inspection rates but requires footprint and capital investment.

Demand modelling and capacity sizing. What level of BOH throughput the operating model is being designed for. This is the area where most BOH design exercises in our experience are weakest.

Technology and digital enablement. Dock booking systems, vehicle access control, security clearance management, waste tracking, F&B replenishment scheduling, and the data layer that allows the airport operator to manage the BOH operating model rather than just observe it.

Sustainability and waste. Waste segregation, organics processing, single-use plastic reduction, packaging reduction, and the broader sustainability agenda all sit inside the BOH operating model. Most Australian airports have material sustainability commitments that depend on BOH design and operating discipline to deliver.

Demand modelling: the most consistently under-done discipline

The most common pattern in major-venue BOH design, and airports in particular, is demand modelling that is too coarse to support sound design decisions. The most frequent failure mode is forecasting BOH demand from passenger volumes alone.

Passenger volume is the headline metric and is usually well-forecast, but it is not the right driver for most BOH demand. The right drivers vary by flow type.

Airside catering demand is driven by international departure schedules, aircraft size mix, sector lengths, and meal service patterns. Not by total passenger numbers.

Retail and F&B replenishment demand is driven by the number, type, size, and location of outlets across the terminal, their hours of operation, and the dwell time patterns of passengers in different terminal zones. Not by total passenger numbers.

Waste demand is driven by the same outlet count, plus front-of-house traffic patterns, plus cleaning shift patterns. Not by total passenger numbers.

Lounge supply demand is driven by lounge count, lounge size, lounge service model (food, drinks, amenities) and operating hours. Not by total passenger numbers.

In every case, forecasting from passenger volume alone produces design estimates that are systematically wrong. Outlet count, outlet mix, outlet operating hours, and the per-outlet demand profile are what drive most BOH flow demand. The dock capacity sized from a passenger-volume forecast often turns out to be undersized or oversized by significant margins.

The right demand modelling discipline starts with the outlet and service inventory, models the per-outlet flow demand, aggregates upward, and stress-tests against peak schedule patterns and growth scenarios. This is structurally different from passenger forecasting. Done properly, it produces design estimates that survive contact with operating reality.

Tenants, concessionaires, and the operating model question

Most airport BOH movements are not generated by the airport operator. They are generated by tenants: airlines, ground handlers, in-flight caterers, retail concessionaires, F&B operators, lounge operators, cleaning contractors, and waste contractors. The airport operator's role is to design the operating environment, govern the protocols, and manage exceptions.

The operating model question is where to set the line between airport operator and tenant responsibility. The choice has commercial, operational, and risk implications.

At one end of the spectrum, the airport operator owns and runs significant BOH infrastructure (loading docks, screening, central stores, internal logistics), with tenants paying for service. This concentrates control and standardises operations but expands the airport operator's operating footprint.

At the other end, tenants run their own BOH operations against operating protocols set by the airport. This minimises the airport operator's footprint but requires sophisticated governance and creates inconsistencies across operators.

Most Australian airports operate a hybrid model. The airport runs shared infrastructure (docks, screening, key internal flows) and governs tenant operations through agreements and protocols. The hybrid model is operationally viable but requires deliberate design.

The single most common BOH operating model failure we see in major-venue work is the absence of clear boundary definition. When the operating model is ambiguous, accountability for exceptions becomes contested, scheduling discipline erodes, and the front-of-house experience suffers.

Workforce, ASIC and the security architecture

Airport BOH workforces sit inside a more demanding security and compliance architecture than most logistics environments. Airside-bound workers, vehicle drivers, screening staff, and stores teams all hold ASIC (Aviation Security Identification Card) or equivalent clearances. Driving authorisations are airside-specific. Training requirements are extensive. Background-checking lead times can be material.

The workforce planning implications are significant.

Recruitment lead times include ASIC clearance, which can take meaningful time depending on the applicant's background. Workforce planning has to absorb the lead time, not be surprised by it.

Retention has commercial value in this environment. A cleared, trained airside worker has higher replacement cost than an equivalent worker in a non-airport setting. Retention discipline matters more.

Contractor management has to maintain visibility of which contractor workers hold which clearances, when those clearances expire, and what training is current. The data discipline is non-trivial.

Peak-period workforce supply is harder to flex than in standard logistics environments because of the clearance requirement. The operating model must build workforce capacity in advance rather than scale reactively.

For more on workforce planning in complex operating environments, our Workforce Planning and Scheduling practice covers the methodology that applies.

Where airport BOH operating models fail

In our experience working with infrastructure operators and major-venue clients across hospitality, healthcare, retail precincts and adjacent sectors, the recurring BOH failure patterns at airports are five.

Demand modelling from passenger volume alone. As covered above. The single most common upstream design error, and the one with the largest downstream cost. Outlet count, outlet mix, and per-outlet demand profile are what should drive most BOH flow estimates, not passenger forecasts.

Under-designed loading dock capacity. Loading docks are usually the binding constraint on landside BOH performance. Under-designed dock capacity shows up as queuing, vehicles waiting on public roads, missed delivery windows, and cascading peak-period failures. Dock capacity design is one of the highest-leverage BOH design decisions.

Ambiguous operator-tenant boundaries. The BOH operating model that does not clearly define operator versus tenant responsibility produces accountability gaps that surface as exceptions and disputes. Clear boundaries from day one are worth significant operating efficiency over the asset life.

Under-resourced screening capacity. Screening throughput is the binding constraint on airside-bound flows. Under-resourced screening cascades into late catering uplifts, missed retail replenishment windows, and operating disruption. The investment in screening capacity is rarely the part of a BOH budget that gets cut without consequence.

Treating BOH as the last design priority. Many major venue projects, airport projects included, treat BOH as the residual design exercise after the front-of-house and architectural decisions have been made. The result is BOH layouts that are technically functional but operationally awkward. Bringing BOH design into the master planning phase alongside front-of-house design is one of the highest-return changes a project can make.

The common thread is treating BOH as an afterthought rather than as a core element of the operating model. The new generation of Australian airport infrastructure projects has the opportunity to do this differently.

How Trace Consultants can help

Trace Consultants advises Australian infrastructure operators, major tenants, and the design and delivery partners working on Australia's major-venue and airport BOH operations. Our positioning is deliberate: senior-led, partner-anchored, vendor-agnostic, with practical operating experience across hospitality, healthcare, infrastructure, and retail BOH environments.

Master planning and BOH design. We work with master planners, architects, infrastructure operators, and project teams to embed BOH design discipline into the master planning phase rather than the fit-out phase. Our Back-of-House Logistics practice covers loading dock design, central stores, internal flows, screening configuration, and the integrated operating model.

Demand modelling for major venue capacity expansion. We build defensible demand models from outlet count, service mix, and per-outlet drivers, stress-tested against schedule patterns and growth scenarios. The deliverable is a working model the project team can use across design decisions, not a single point forecast.

Operating model design and tenant protocol architecture. Where the BOH operating model spans airport operator and tenant responsibilities, we design the operating boundaries, the governance architecture, and the protocols that make the hybrid model work.

Workforce planning and ASIC-cleared workforce design. Our Workforce Planning and Scheduling practice covers the workforce demand modelling, supply analysis, recruitment lead time management, and rostering discipline that the security-cleared workforce environment requires.

Technology and digital enablement. Dock booking systems, vehicle access control, security clearance management, waste tracking, and the broader BOH technology stack sit inside our Technology practice.

Commissioning and operational readiness. Where the BOH design transitions into operational reality, our Project and Change Management practice supports the commissioning, operational readiness, and post-go-live stabilisation work that determines whether the design intent is delivered in operation.

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Where to begin

If you are an airport operator, a major tenant, or a project team scoping BOH work, start with three questions. What does the demand profile actually look like at the outlet, flow type, and time-of-day level, not at the aggregated passenger volume level? Where are the binding capacity constraints in the BOH operating model today, and where will they be after planned expansion? Where do the operating boundaries sit between airport operator and tenant responsibility, and are they clear enough to govern exceptions?

If those three questions surface material gaps, the next step is a structured BOH operating model review.

Frequently asked questions

What is airport back-of-house logistics? The set of operations that supports passenger-facing airport functions: goods receiving, security screening of airside-bound items, central stores, internal logistics flows, food and beverage replenishment, retail replenishment, in-flight catering, waste flows, lounge supplies, ground handling support, and the operating model that governs all of them across landside and airside zones.

What is the difference between landside and airside BOH? Landside BOH operates outside the security cordon and supports terminal landside functions. Airside BOH crosses into the secure zone and must comply with airside operating protocols, ASIC clearance requirements, and security screening for all goods entering the zone. The two operate as related but distinct operating models.

Why is airport BOH more complex than other major-venue BOH? Five factors: security screening of every airside-bound item, 24/7 operations with concentrated demand peaks, multiple tenants and operators, ASIC clearance and airside driving authorisation requirements, and cold-chain and food safety requirements at significant scale.

What is ASIC clearance? Aviation Security Identification Card, the mandatory background-checked credential required for workers operating in airside zones at Australian airports. Lead times for clearance can be material and must be planned for in workforce supply.

Why should BOH be designed from outlet count rather than passenger volume? Most BOH flow demand is driven by outlet count, outlet mix, operating hours, and per-outlet demand patterns, not by total passenger numbers. Forecasting from passenger volume alone systematically produces design estimates that miss the actual drivers of demand. The right method starts with the outlet and service inventory and models per-outlet flow demand.

What is the typical scale of Australian airport capacity expansion in 2026? The ACCC has reported the four monitored airports (Sydney, Melbourne, Brisbane, Perth) invested $1.5 billion on aeronautical facilities in 2024-25, with collective proposed major infrastructure spend approaching $20 billion over the next decade. Western Sydney International opens in late 2026, Melbourne announced a $4.5 billion expansion in March 2026, and Brisbane is progressing its $5 billion Future BNE programme.

How does 3D CT screening change BOH operations? Three-dimensional computed tomography (3D CT) provides higher-resolution imaging of screened items, generally reducing secondary inspection rates and improving throughput compared with traditional X-ray. The implications for BOH operations include screening capacity sizing, layout, equipment investment, and timing of deliveries.

Who is responsible for BOH operations at an airport: the airport operator or the tenants? Most Australian airports operate a hybrid model. The airport operator runs shared infrastructure (loading docks, screening, key internal flows) and governs tenant operations through operating protocols. Tenants (airlines, caterers, retailers, F&B operators, ground handlers, cleaners, waste contractors) run their own BOH operations against the protocols. The boundary between operator and tenant responsibilities is one of the most consequential operating model decisions in any airport BOH design.

When should BOH design be considered in a major airport project? During master planning, alongside front-of-house design, not during fit-out. Treating BOH as a residual design exercise produces layouts that are technically functional but operationally awkward. The cost of doing BOH design early is small. The cost of doing it late is significant.

What are the most common BOH operating model failures at airports? Demand modelling from passenger volume alone, under-designed loading dock capacity, ambiguous operator-tenant boundaries, under-resourced screening capacity, and treating BOH as the last design priority.

Airport back-of-house operations are the half of the airport business the passenger never sees and the operator cannot afford to get wrong. The current Australian airport capacity expansion programme is the largest in a generation, and the BOH operating model implications of that programme are still being worked through across multiple projects.

If you are scoping a new terminal, expanding existing infrastructure, or running an existing airport BOH operation under capacity pressure, the work starts with the operating model.

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Related reading: Back-of-House Logistics · Project and Change Management · Workforce Planning and Scheduling · Technology · Strategy and Network Design · Insights