Rough ride may end in smooth landing

Alison Birrane wraps up the series on transport logistics with a look at how recent global events have affected local perishable cargo forwarders.

THE past 12 months have been difficult for freight forwarders in the perishables business, whose livelihoods depend on available aircraft space.

The airline industry has been rocked by one disaster after another in recent times – September 11, the Bali bombing, the war in Iraq, and SARS – resulting in an overall fall in the number of flights leaving WA.

And while business isn’t exactly booming for those in perishables freight forwarding, most in the industry say things are steady and they are hopeful that, with the SARS crisis nearly over, they will be able to ride out the current quiet times.

Local perishables forwarder Fresh Live and Frozen Aircargo chief, Mark Mills, said competition for cargo space on planes was usually tough, but it was “business as usual” as some exports also were down.

Mr Mills said the decline in tourism, coupled with a downturn in domestic demand for commodities such as restaurant food in SARS affected countries, had added to the export woes of some perishable exporters, which has had a flow-on effect to the perishables freight forwarding industry.

“This has got to be the leanest I’ve seen the industry for 20 years, but there are usually good times that follow the lean times,” he said.

“It’s been a really tough 12 months for the trading industry and for the exporters as well.

“Most freight forwarders in WA are down about 40 per cent because you’re trading less. We’ve been lucky enough to ride it out.

“We were planning on some growth, such as hiring new staff, but it didn’t happen.”

Managing director of Cargo Force, a local lobster freight specialist, Glenn Galipo, said the downturn in the lobster market caused by global economic conditions, and a slip in demand in South-East Asia, had made this year particularly tough.

“There have been huge capacity problems due to major drop offs in flights to Hong Kong and Singapore,” Mr Galipo said.

“All [perishables] processors are fighting for a few flights per week.”

Sadleirs airfreight manager Joe Fogarty said the events of September 11, terrorism, war, SARS and the value of the Australian dollar had all contributed to affect both freight and perishable export demand. Most in the industry expect business to improve toward the end of the year, however.

He said those in the freight forwarding business were quick to notice improvements in the domestic and international markets for perishable exports.

“Our business tends to be a forward barometer of what’s happening in the economy,” Mr Fogarty said.