International Freight Assistance Mechanism (IFAM) 

  • AUSVEG has provided detailed data to the IFAM coordination team on the footprint of fresh vegetable airfreight exports – by city of origin, export market destination, crop/product and volume by month etc.
  • No clear definition of ‘high-value’ product has been provided to date; however it was stated at the last briefing that perishability and product shelf-life will be taken into account when prioritising freight services.
  • Government has released a Request For Proposal (RFP) to selected airlines/Freight Forwarders by invitation; the RFP will close and a decision made next week. This process will appoint airlines and a panel of Freight Forwarders to coordinate perishable cargo under IFAM.
  • Your freight requirements are critical to better optimise the freight capacity that will be made available when the mechanism goes live.
  • Vegetable grower-exporters that have not yet registered and expressed their interest to use these freight services are strongly encouraged provide information on your airfreight requirements directly to the Airfreight Assistance Team from the Department of Agriculture, Water and the Environment (DAWE) by clicking here to express your interest.

If you would like to disucss IFAM further, please contact me on 0416 016 202 or michael.coote@ausveg.com.au.

Air Freighter Services 

  • In addition to the IFAM services, 55 commercial freight-only flights have also been scheduled for April, totalling 540 services for this month – click here to see advice from AusTrade.
  • Below is a selection of airline freighter availability – please note it is subject to change and the best way to access these flights is to contact your Freight Forwarder or log onto your preferred airline cargo website.

Qantas
To support Australian exporters, Qantas will make air freight capacity available on repatriation international passenger services to Auckland, Hong Kong, Los Angeles and London commencing Thu 9 Apr 2020 and will operate for at least four weeks.

*This is a sepearate arrangement to IFAM; Latest as at 09 April 2020.

Emirates SkyCargo 
Emirates SkyCargo has created a dedicated passenger 777 ER (cargo only) network to cater to their customers’ logistics needs in addition to their existing scheduled freighter network. They have introduced 5 weekly Melbourne-Dubai freighter flights with a 60 tonne cargo capacity as at 9 April 2020. This is in addition to the 4 weekly Sydney-Hong Kong services.

Qatar Airways Cargo
Qatar Airways Cargo has begun the twice-weekly Boeing 777 freighters to Melbourne and Perth, with a tech stop in Singapore from 2 April 2020. These freighters will complement the previous belly-hold services adding 200 tonnes of main deck cargo capacity each week, each way. This brings the combined weekly capacity in and out of Australia to more than 550 tonnes.

Air New Zealand
Air New Zealand will operate a limited international network from 30 March to 31 May 2020 to enable essential travel and to keep air freight moving through key cargo corridors to North America and Asia. There are three return services per week for Auckland to Sydney, two return services for Auckland to Brisbane and Auckland to Melbourne.

Singapore Airlines Cargo
Singapore Airlines is still operating its full freighter and belly-hold routes from Melbourne, Sydney and Perth to Singapore during April 2020.

Malaysia Airlines Cargo
MASKargo currently provides freighter services for the SYD-KUL route using three A330-200F freighter aircrafts.

COVID-19: Implications on International Trade 

The impact of COVID-19 on Australia’s vegetable export trade is currently characterised by uncertainty. Due to the unprecedented situation we are facing, Australian vegetable grower-exporters are reminded to:

  • Consider immediate challenges imposed on your export business operations, such as international border shutdowns, limited freight services and movement restrictions in destination countries;
  • Keep up to date with the supply chain changes domestically and internationally;
  • Continue to maintain strong and consistent international customer engagement to understand the current market demand, market conditions, market movements, border restrictions economic environment and logistics restrictions in destination countries; and
  • Where possible tighten your international payment terms to mitigate risk as best as possible.

ECA launches COVID-19 webpage

The Export Council of Australia (ECA) is collating information and resources to help Australian businesses involved in international trade prepare for and mitigate any effects of the COVID-19 pandemic. The COVID-19 webpage contains comprehensive information and tools to help Australian trade businesses – click here to find out more.

Update on International Freight Assistance Mechanism

This afternoon I participated in a briefing by government to industry on the International Freight Assistance Mechanism (IFAM) announced yesterday. This briefing was facilitated by AusTrade and included updates from the following Federal Ministers:

  • Senator the Hon Simon Birmingham, Minister for Trade, Tourism and Investment,
  • The Hon David Littleproud MP, Minister for Agriculture, Drought and Emergency Management, and
  • Senator the Hon Jonathon Duniam, Assistant Minister for Forestry and Fisheries, Assistant Minister for Regional Tourism

Summary of Key Points:

  • Government has developed this initiative to both increase airfreight capacity and manage the price pressure so exporters can continue exporting.
  • This initiative is an opportunity to both assist industry with keeping access to export markets that some businesses have built over many years, and also an opportunity to showcase Australian agriculture and enhance our reputation as a reliable supplier in both good times and bad.
  • The International Freight Coordinator General – Michael Byrne – has already commenced work on this initiative with a team of six dedicated staff.
  • It was acknowledged that this is an unprecedented scenario and there is no playbook for how to implement this solution. There will be an iterative approach taken, feedback will be needed as we go and is welcomed, and that government needs support and engagement between exporting businesses, industry and government. Government is looking for pace rather than perfection with getting these services up and running.
  • Backhaul priority will be given to bringing in medical and pharmaceutical supplies for Australians.
  • Timing:
    • Government will release a Request For Proposal (RFP) to airlines/forwarders by COB today; the RFP period will close at midday next Wednesday 8 April; government will make a decision by midday Friday 10 April.
    • Flights under this arrangement will commence within approximately two weeks.
    • Flights will continue for no longer than commercially necessary, for a maximum of six months and government does not want to impede on the reestablishment of commercial airline services.
  • Location:
    • The original four cities/airports listed for departure of these flights – BNE, SYD, MEL, PER – were chosen as part of a ‘hub and spoke’ type model where other regions could supply into one of these cities – e.g. Tasmania and Adelaide can ship to Melbourne to access services under this arrangement.
    • It was noted that, if it can be demonstrated that there is sufficient volume for a single uplift, a dedicated service may be considered – e.g. from Adelaide, Toowoomba or an alternative location.
    • Services to other markets may be considered where volume can determined. IFAM is already considering the possibility of one or more services to the US.
  • Definition of ‘high-value’ product:
    • No clear definition was provided at this time; however it was stated that perishability and product shelf-life will be taken into account when prioritising freight services.
    • It was explicitly stated that this service is not just about exporting protein; other agri-products – specifically vegetables – will have an opportunity to utilise this capacity.
    • More information will be provided on this topic in the coming days.
  • Pricing:
    • Government will be underwriting freight services; but this is not a free ticket, it is an assistance mechanism and business will still have to pay part of the total freight cost.
    • The intention is that government will negotiate with the airline (through the RFP process); then use aggregated volume and freight optimisation to minimise the spread differential between their negotiated rate and the usual market rate. The aim is to bring the $/KG rate paid by exporters down to a commercially viable rate under this arrangement.
    • It was noted during this discussion that this is not a farmgate to customer service. Exporters will still be responsible for getting their products to the locations these planes will depart from, and be responsible for logistics once the product lands in international markets.
    • More information will be provided on pricing in the coming days.
  • Data and information:
    • The more data and evidence that government has about where services are required to depart from and to, and when, the quicker decisions can be made about scheduling services.
    • AUSVEG is providing detailed data to the IFAM on the footprint of fresh vegetable airfreight exports – by city of origin, export market destination, crop/product, and volume by month etc.
    • Vegetable grower-exporters wanting to use these freight services are strongly encouraged to register and provide information on your airfreight requirements directly to the Airfreight Assistance Team from the Department of Agriculture, Water and the Environment (DAWE) by clicking here to express your interest.

If you would like to disucss IFAM further, please contact me on 0416 016 202 or michael.coote@ausveg.com.au.

Express Your Interest in Airfreight Support for Australian Exporters 

Following the government announcement this morning of the new $110 million initiative to ensure air freight capacity remains open for critical markets, the Airfreight Assistance Team from Department of Agriculture, Water and the Environment (DAWE) is seeking exporters to register and provide information on their airfreight requirements.

Please click here to express your interest.

If you have any questions regarding Airfreght Assitance, please email freight.assistance@agriculture.gov.au.

As communicated this morning, AUSVEG will also be engaging with the International Freight Coordinator General, Mr Michael Byrne, to support industry’s export needs and work towards the development of commercially viable airfreight options for fresh produce exporters.

Securing Airfreight Access for Australian Agricultural Exporters

Overnight the Federal Government announced a package to provide airfreight support for essential agriculture, fisheries and forestry industries. The package, valued at $110 million, will help exports of high-quality, high-value produce access key overseas markets.

The International Freight Assistance Mechanism (IFAM) will be administrated by Michael Byrne as International Freight Coordinator General. Mr Byrne will advise the government on operational aspects of the program such as departure points, arrival points, freight mix, product eligibility and other factors. Mr Byrne has significant international logistics experience as Managing Director of Australia’s two largest logistics companies Toll Holdings and Linfox plus as a non-executive director of Australia Post.

Please click on the following to find out more information on IFAM:

Key points for Exporters:

  • Products are eligible may include:
    • Seafood
    • Premium red meat
    • Dairy
    • Horticulture (such as premium fruits and packaged salad or vegetables)
  • The destination countries include:
    • China
    • Japan
    • Hong Kong
    • Singapore
    • UAE

This list may be expanded in the future based on demand, operating method and commercial opportunities.

  • The Australian departure points will be:
    • Melbourne
    • Brisbane
    • Sydney
    • Perth
  • The first flights of the program are likely to commence within two weeks. Flights will be scheduled as determined by demand and market access. Flights will be expedited as soon as they are full of produce.
  • The scheme is intended to operate until ordinary commercial markets return, or for six months, whichever is earlier. If demand, value and need are clear, the scheme may be extended.

What does this mean for Australian vegetable exporters? 

  • At the initial stage, IFAM will target high-value agricultural and fisheries exports, predominantly perishable products where Australian exporters have established customers in market.
  • The target also includes high-value, low-volume produce and that is coming into season.
  • The freight cost to growers is yet to be determined.
  • Whilst there will be additional airfreight capacity as a result of the scheme, cargo space on flights is limited and export volumes are likely to be greatly reduced.

The government will provide more details, such as detail on how to apply, over the next 48 hours.

AUSVEG is involved in ongoing discussions with the Federal Government and will be providing further information on IFAM and how it will operate shortly.

Funding Boost into Export Market Development Grant (EMDG) program

The Morrison Government will inject an extra $49.8 million into the Export Market Development Grant (EMDG) program in the 2019-20 financial year, allowing exporters and tourism businesses to get additional reimbursements for costs incurred in marketing their products and services around the world.

Key points:

  • This extra $49.8 million to supplement the additional $60 million already committed by the Morrison Government will bring EMDG funding to its highest level in more than 20 years at $207.7 million for the 2019-20 financial year.
  • Any business which has incurred eligible EMDG expenses for promotional activities in 2019-20 financial year will be able to seek reimbursement for 50 per cent of these expenses without the Export Performance Test applying, when they apply from July 1.
  • Applications lodged in the 2020-21 financial year can claim expenses even if events have been cancelled due to circumstances beyond a business’s control.

Please click on the following to find out more on EMDG: