Shipping updates and chemical supply and costs were the dominating topics at Citrus SA’s Grower Information Day held in April.
Michael Byrne from DFAT spoke about the International Freight Assistance Mechanism (IFAM) – a temporary, targeted, emergency support measure established by the Australian Government in response to the COVID-19 pandemic.
Its objective is to reconnect global airlinks, working with commercial airlines and freight forwarders to create air freight capacity for premium perishable Australian goods (on outgoing flights), and prioritises medical, PPE or other products in the national interest as requested on incoming flights.
Additionally, IFAM provides logistical and administrative support for international freight movements by aggregating cargo loads, negotiating with airlines and dealing with partner governments to facilitate clearances and improve transparency of freight costs during the pandemic.
Mr Byrnes said the freight environment has irreversibly changed, and this is something businesses must consider in the future to capitalise on opportunities going forward.
Key points included:
- Airfreight prices will not return to pre-pandemic levels, and businesses must account for this as they adjust to ‘new-look’ supply chains.
- Sending produce into China and Hong Kong is likely to remain challenging. Hubbing through Singapore or Bangkok could be a possible solution, and exporters are encouraged to explore alternative supply chains to reach their destinations.
- Exporters must continue to manage pricing, as well as normal market fluctuations/disruptions, including the impacts of international conflicts, geopolitical shifts and extreme weather events we’re currently experiencing.
- The federal government is turbo-charging support options for Australian businesses. State and territory governments also offer a range of support options for exporters and other businesses to set up, operate and expand in Australia and globally.
Situational factors are heavily influencing freight rate levels including demand surge caused by the Covid crisis, port and yard congestion, long vessel waiting times, equipment shortages and blank sailings.
Mr Byrne said in the future there will need to be increased collaboration among producers, aggregation, and a need to build scale and then seek rebates.
Technological improvements could be improved on in the areas of improved packaging, increased shelf life and built-in flexibility in commercial arrangements. He also said to avoid fixed price and fixed fuel contracts.
