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Australia further extends air cargo subsidies to September end

AUSTRALIA has extended its air cargo subsidies for the third time with no sign of a return to pre-Covid supply chains, reports UK's Loadstar

06 April 2021 - 19:00
AUSTRALIA has extended its air cargo subsidies for the third time with no sign of a return to pre-Covid supply chains, reports UK's Loadstar.

March funding for the International Freight Assistance Mechanism (IFAM) was increased to A$781.8 million (US$596 million), and the programme was extended until the end of September.



Some international flights were due to restart in Melbourne this week for returning nationals, following the state of Victoria's third lockdown.



However, with Australia's borders unlikely to fully reopen until the fourth quarter, according to recent reports, forwarders are expecting little impact on rates and capacity.



Stuart McFarlane, air and sea freight forwarding manager at the International Forwarders & Customs Brokers Association of Australia, said the challenges of restricted capacity and meeting demand were being driven by the lack of passenger flights.



'Despite the lifting of the cap next month, there is a significant premium on rates, due to the lack of capacity,' he said.



'Freighters and passenger-freighters are supporting the very limited number of passenger flights, but market freight rates are still sitting at 1.8 to six times pre-Covid levels, depending on the destination.



'Most flights are at, or near, capacity and the nature of the cargo depends on the capacity of the customer to pay; typically higher-value items, other than the IFAM-subsidised cargo.'



Mr McFarlane added that e-commerce cargo was 'booming', especially imports from the US, with the major integrators such as DHL, FedEx and UPS all adding capacity.



Importers have also increasingly turned to air-sea cargo over the past 12 months, flying European shipments into Asian hubs like Hong Kong and Singapore, then using container vessels for the final leg into Australia.


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