Freight capacity has almost completely evaporated

Hong Kong and Singapore cannot get Australian produce they desire

Until some 14 days ago, Antony Allen –chief executive of agribusiness The Avolution in Brisbane, Australia– was exporting a total of 45 tonnes of avocados to Hong Kong, Singapore and Malaysia every week. These days, he is unable to send even a third of that amount to his company’s top three overseas markets.

The problem is not a drop-off in demand, which remains strong, but the grounding of global aviation due to the coronavirus pandemic. Freight capacity, most of which is usually provided by regular passenger flights, has almost completely dried up, and the little space that remains costs a premium.

Allen’s company, which produces about 20 per cent of Australia’s avocado crop, now spends about A$15,000 (US$9,100) in transit fees per plane load of 4.5 tonnes – an almost five-fold increase in cost.

“Essentially the extra cost of freight is being absorbed at this end,” said Allen, whose company exports about 10 per cent of its produce. “We are all trying to work out how we can do that better. We certainly grow more food in Australia than we can eat so I think it’s really, really important for us and our customers to be able to continue on.”

The near-collapse of air travel in Australia – largely due to a government ban on foreign arrivals since March 20 – has spawned unprecedented logistical challenges for the country’s agri-food producers, which export more than A$50 billion worth of produce overseas each year, much of it to Asia.

Unlike many of its target markets, which include Singapore, Hong Kong and Japan, Australia is a net exporter of food, sending about 65 per cent of its agricultural produce overseas. Australia’s approximately 85,000 farms produce enough food to feed 75 million people – three times the Australian population – with major exports including beef, wheat, dairy, vegetables and alcoholic drinks.   

In 2018/19, the country exported A$14 billion worth of produce to China, its biggest export destination, while other top-10 export destinations included South Korea, Vietnam and Indonesia.


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