Domestic Air Freight News
The fresh food industry, particularly for perishable goods like chilled lamb and beef, has significantly prospered following the growth of passenger traffic connected to the initiation of the Qantas Emirates partnership in 2013. This growth has seen Perth airport’s international passengers increase from 1.9 million twenty years ago to 4.1 million ten years later, subsequently augmenting the air freight capacity to both the Middle East and Asia.
These planes, often equipped with spare cargo space, find use in transporting goods such as rock lobster for China and chilled lamb and beef for the Middle East. These regions, boasting a substantial proportion of affluent consumers, are willing to spend premium amounts for fresh products. Nevertheless, the market size remains relatively limited akin to the luxury car market.
Quantity matters too. Overproduction of a product, for example, rock lobster before 2008, could end up saturating the market and leaving the product frozen and roaming globally in search of a place. Likewise, excessive lamb production can result in it being too much for the live export trade, rendering it similar to frozen lobster.
To compete effectively in the market, consistent supply is crucial. Should the routine landings of planes falter, our products face a risk of being replaced by other producers like New Zealand or South Africa, who can supply both meat and lobster. The recent pandemic has acted as a hurdle in achieving pre-COVID levels of international flights, thereby affecting high-end export sectors. As such, the decision to halt Qatar’s plan to double its flights is a hit to the fresh produce export industry.
Given this context, it is unsettling to see the government’s refusal to approve additional flights for Qatar airlines, especially when the country presents itself as the third largest market in the Middle East and North Africa for Australian chilled and frozen boxed beef and sheep meat.
Meanwhile in Australia, the lack of spare airline capacity poses a concern for expansion. Sydney accounts for almost half of international air cargo by weight, but Perth holds the highest monetary value because of its lobster and meat freight, and surprisingly, gold coins.
As of now, Perth air freight airport manages around 1000 tonnes of export airfreight per week, 80% of which is fresh produce. However, the total airfreight movement is still low compared to pre-pandemic levels. Outbound traffic is notably low, with 12-month total freight at its lowest since 2015 as of March 2023. Unless we can increase international freight out of Perth, it will continue to be cost prohibitive transhipping air freight from Perth to Sydney then onto the Middle East.
The recent governmental decisions on Qatar and live exports are hard to comprehend and put the industry at risk. If the government wants boxed sheep meat to replace live exports, then impeding Qatar’s air freight growth is a step in the wrong direction. Even if this decision is overturned, the subsequent increase in air freight will likely have negligible effect on sheep prices in the sale yards.
In light of these challenges, it’s clear that strategic initiatives must be taken to bolster the fresh food export industry, particularly focusing on enhancing air freight capacity and ensuring regular flight schedules. The government, in collaboration with industry stakeholders, could explore incentivizing airlines to increase cargo space for perishable goods or negotiating with additional carriers to service routes critical for export sectors. Furthermore, investing in advanced cold chain logistics and storage solutions at Perth airport could mitigate potential disruptions and maintain product quality during unexpected delays. Such measures would not only safeguard against future market volatility but also position Australian producers as reliable suppliers in the competitive global market. Additionally, expanding into emerging markets could help diversify the risk and reduce dependence on a limited number of export destinations.
