Transporting products by air is an expensive exercise, but some commodities wouldn't become exports without this method. Here's why some exporters learn to fly.
It sounds like a jetsetter's lifestyle. One morning you're enjoying an early paddle in the waters off the coast of sunny Queensland and before you know it, you're at your dinner date in Dubai. It's possible, of course, with an afternoon flight and time difference working in your favour, although most seafood cargo wouldn't necessarily look on the dinner date with any favour.
Seafood is just one Australian commodity that benefits from the rapidity of air transport. Others, such as flowers, meat, fruit and vegetables, are also frequent flyers. The trait that all these products have in common is their relatively short shelf life, which often means that the quicker they make it to market—wherever that is in the world—the higher the price they’ll fetch.
The distance between Australia and most of its fresh food markets makes airfreight doubly important. While cargo on a train from China to Germany will beat a cargo ship from Australia to the same destination, airfreighting is one leveller that helps Australian producers stay attractive for customers, even after sacrificing price competitiveness.
When time is money, the higher cost is worth it to retain quality, says Craig Templeman, executive officer of the Airfreight Council of Queensland (AFCQ). "Air is expensive, let's face it, but it's there for high value, time-sensitive products. With perishables, time is of the essence and shelf life is obviously better with airfreight. The extra hours—not even days—can give you added extra high yield revenue, for example, at restaurants.
"We actually enjoy relatively low airfreight rates out of Australia. From Europe inbound it's a different story. The strong Aussie dollar and drought tend to cloud things, but exporters don't know how lucky they are."
Industry associations like the AFCQ focus on all airfreight issues, from ensuring that growers, producers and exporters are catered for by the airfreight carriers, to working with the airlines to make certain they have the right infrastructure and conditions to operate at their optimum. Overall, these associations work to improve the airfreight environment for the industry as a whole.
Ready to launch
If you're an exporter (or potential exporter) thinking of sending your product by air, there are three main areas you'll need to examine before your product leaves the runway. The first is to understand your product and find suitable packaging for it, if only because you'll save some money on space when your product is efficiently packed.
Many fruits need to be packaged correctly to avoid bruising, which may involve special foam cladding or custom-sized boxes. And temperature is an important factor, with cool and dry storage conditions suiting most other perishable exports like flowers, vegetables, meat and seafood. If transporting livestock or live seafood, you may need to consider animal safety and the regulations that govern animals in transit.
"Australian exporters are very good at retaining product integrity, looking after the product," says Templeman. "We have some pretty sophisticated packaging companies. If you tell them what your product is, they can come up with something to put it in; we invented the thermal blanket. There are some wonderfully innovative things happening with packaging, product temperature-wise, and with data logging."
Quarantine is another issue agricultural and horticultural exporters will need to understand, both the quarantine laws of this country and those of the destination country. Some restrictions may apply to the type of product you're trying to export, for example some species of native plants, or the quantity of product you're trying to export. And of course it's wise to make sure your product is acceptable at the destination country as well, so the flight isn't in vain. Needless to say, there's a fair bit of paperwork involved at both ends, which is where a freight forwarder steps in.
A freight forwarder is a company committed to looking after the safe passage of your product from its departure point at its country of origin, to its arrival point at the destination country. "Forwarders will look at: What sort of business is it? What's the commodity, what are they exporting? Where is it going? The weights and volumes. Once that's ascertained, your freight forwarder will do all the documentation for you. They'll look after your insurance, security, fuel charges, and make sure their agent at the other end looks after your business," explains Templeman.
"Along with the homework you do in sourcing a good freight forwarder, you should get quotes. Shop around. There's a heap to choose from; about 200. The bigger companies have international offices and a lot of them are IATA [International Air Transport Association] accredited. The airfreight industry is highly regulated and highly controlled."
Different freight forwarders have different strengths so the right freight forwarder will depend on your product. Templeman recommends asking advice of any of the airfreight councils (see box) or industry associations such as AFIF (Australian Federation of International Forwarders), CBFCA (Customs Brokers and Forwarders Council of Australia) or ICHCA (International Cargo Handling and Coordination Association).
On the perishable front, Templeman notes that the AFCQ has been trying to establish a 'fresh port' in Queensland for some years. Perth has one, and the council is eyeing off one of Queensland's three international airports—Cairns, the Gold Coast and Brisbane—as possible sites.
A fresh port is a facility dedicated to the transport of perishable products. The advantages of having a fresh port are the availability of purpose-built resources and use of specialised transport equipment, and the potential to reduce handling that might delay its journey from producer to plate. "Instead of going to a freight forwarder then to the cargo transport, it might go from the grower straight to the complex to make things seamless. That should keep the rates low; we don't want double handling or double costs," he says.
Time is money
Airfreight isn't restricted to perishables, however. Templeman lists other time sensitive items that travel by air, including commercial samples, componentry, scientific instruments and even mining equipment. "It might be a prototype that may be holding up production of something," he suggests. "Wine is very expensive to airfreight, but there might be a pallet going to an international wine show or a big ambassadorial function or an Aussie function where they can show off Aussie wines."
Pharmaceutical and biological products also regularly travel by air; Templeman mentions that inoculations for equine influenza flew in to alleviate the recent epidemic. He also notes that many biotechnology companies that import products for research and development may then export them at a later date. "Biotech is growing. Products might come in from the States and then something happens to it here and then it goes out elsewhere, even just to research complexes," he says. "When we get the fresh port, treatments, blood and body parts will have to be looked after."
The substantial increase in the volume of airfreight is testament to the importance of this mode of service, but airfreighting is not immune to obstacles that may prevent it from reaching its potential heights. Factors such as security, safety, infrastructure, the environment and the skills shortage have weighed heavily on the rise of airfreighting rise.
Templeman nominates air traffic as a particular problem, considering that many of Australia’s main airports are expanding and the skies are becoming more congested. The good part is something’s being done: “The air industry as a whole will be affected by increased air traffic and parking problems, but the industry has noticed it and planned for it,” he says.
Exporters shouldn’t discount the possibility of air-sea freight as another option, if their load isn’t too time-sensitive. Air-sea combinations usually involve shipping commodities by air to a centralised location such as Singapore, then by ship to their final destination. This is handy for the budget conscious, considering that the frequency of container ships to Australia is not as high as some of the Asian ports.
Airfreight clearly has advantages for time-sensitive, high value items and may just be the right fit for your cargo. Was that chicken or fish?
Into Thin Air
There are a number of different freight and logistics councils that operate in Australia that you can contact for help. While the branches are mostly state-run, they usually connect at a national level as a network. Councils and associations are non-partisan and should be able to supply you with information about freight forwarders suitable for your product, which service your area.
Australia Airfreight Council: www.australianairfreight.com
Australian Freight Councils Network: www.freightcouncils.com.au
Australian Logistics Council: www.austlogistics.com.au
Air Freight Council of NSW: www.airfreightnsw.com.au
NT Freight Working Group: www.nt.gov.au/dcm/freight
Airfreight Council of Queensland: www.australianairfreight.com/secondp.htm
South Australian Freight Council: www.safreightcouncil.com.au
Tasmanian Freight Logistics Council: www.freightlogistics.com.au
Victoria Airfreight Council: www.australianairfreight.com/vac
What doesn't fly is usually not what cannot be carried by air, but what will not be permitted in the air by law. Bet you never thought these things would fly:
The Flying Grocer
The Middle East is a hungry market with an appetite for our fresh produce, judging by their consumption of Australian fruit and vegetables. Chris Pardy, from Ernest Pardy & Sons in Sydney, estimates about 70 percent of their exports travel by air to their main markets in the Middle East and south east Asia. "We find that we’re getting orders which have to be acted on very quickly before the market changes, rather than taking three or four weeks to get there," he says. "We can react to the current market within 48 hours of placing the order and that’s mainly what we specialise in."
The tiny agriculture sector of the Middle East doesn't quite feed the region's population so as a result they import a lot of produce from Europe, Asia, the Americas and, of course, Australia. This works out well as it means that our seasons don't clash with their northern hemisphere imports. Ernest Pardy & Sons do well in their niche of specialising in stone fruit. "A lot of the tropical fruits come out of Thailand and other Asian countries, but we do the temperate fruits like peaches and nectarines that can't be provided by the tropical and subtropical countries," explains Pardy.
The business uses a freight forwarder for their air cargo "because they have better deals than we would have, dealing with an airline" but process all the sea shipments themselves through a shipping company—"I don't think a freight forwarder could get us better rates". Pardy says they looked for a forwarder who would be available at key times for providores, late at night and in the early morning, and someone "prepared to do a little bit more than the normal freight forwarder", a specialist for the perishables market.
Pardy is also a member of the Air Freight Export Council NSW, invited by the government to represent providores. Of the issues he discusses with the council, securing the cold chain and freight rates are two priorities. But, he says; "We’re very lucky to have a lot of airlines that fly here to offer a service to Australian perishables so freight rates are reasonable considering what they were 10-15 years ago."