Isolation may have helped Western Australia navigate COVID-19 so far, but many agribusiness exporters have used federal help during the pandemic to maintain market access.
Isolation may have helped Western Australia navigate COVID-19 so far, but many agribusiness exporters have used federal help during the pandemic to maintain market access.
About 22 per cent of volumes moved through the government’s International Freight Assistance Mechanism have been from WA, highlighting the state’s strength as an exporter.
IFAM is coordinated by Michael Byrne, who formerly served as chief executive of major transport businesses, including Toll Group and Linfox.
About 240 international flights departed Perth weekly before COVID-19, Mr Byrne told Business News, a figure that was now 35 or so.
Some exporters went from having 40 options in a week to move cargoes to just one, during the early disruption of the pandemic, he said. But this was improving.
“We had more planes in Perth last week (early August) than we’ve had in a long time,” Mr Byrne said.
He said part of the challenge for sourcing flights was that there were at least two legs to an aircraft’s journey.
“No plane comes to Australia to pick up agricultural products; they make money on inbound freight,” Mr Byrne said.
He estimated as much as 70 per cent of an airline’s profit might be from inbound freight, in ordinary times, with passengers making up the remainder.
With much of the world’s commercial fleet grounded, air freight was proving costly, however.
Mr Byrne said that, at the peak of the pandemic’s disruption, air freight costs were as much as 13 times higher than last year.
For WA, costs remained two to eight times higher.
“Prices haven’t come down as much in Perth [as other parts of Australia],” he said.
And with many planes not flying, it was unlikely excess capacity would be rapidly reintroduced to meet the demand.
Pilots who had not flown for a period would need weeks to get recertified, and planes, similarly, had an extensive process to return to the air, he said.
Mr Byrne said it was possible the volume of flights would not return to normal globally until 2024, with the IFAM program funded until at least early next year.
“We don’t see prices coming down this calendar year, we think they’ll go up,” he said.
In addition to logistics coordination, IFAM was subsidising up to 40 per cent of the price increase for eligible export businesses, Mr Byrne said.
This wouldn’t continue forever, he said, rather it was about creating breathing space.
WA exporters had moved 2,405 tonnes of pork, 1,301t of vegetables, and 944t of seafood through the flights, he said, among other commodities.
From Perth, destinations included Hong Kong, Singapore and the Middle East, with flights operated by Cathay Pacific, Singapore Airlines, Qatar Airways and Emirates.
In July, the scheme received a $241.9 million funding extension, on top of a $110 million first round in April.
“There’s just no playbook, that’s like a lot of things with COVID,” Mr Byrne said, reflecting on the rapid introduction of the scheme.
“People need to show great agility, flexibility and resilience.
Wildflower
Austpearl Flowers owner Maureen Moore told Business News international flights from Perth through IFAM had been critical for the wildflower exporter.
“It’s been very, very important,” Ms Moore said.
“We spent a lot of money on fertiliser, pesticide, water, and labour.
“It really worried us that this year was going to be a disaster.”
Initially, Ms Moore said, she felt WA had been forgotten, but Austpearl’s freight forwarding service had helped it access the IFAM scheme.
For some months, flights had been inaccessible, and the business sought to find buyers locally.
Now, Austpearl’s flowers have been heading to Japan and Amsterdam through the scheme.
