Airfreight ‘a massive risk’ for hort exporters

International travel is back on, but few Australians are keen to jump on a plane. The problem could be huge for horticulture exporters.

Spiralling freight costs, made worse by the faltering return of international travel, are pushing some horticulture exporters to question their future in the industry.

Farmers and fresh produce exporters are concerned about how quickly the travel industry will take to rebound given that Australia’s most valuable and perishable fruit and vegetables, such as cherries, mangoes, peaches and asparagus, rely on airfreight – mostly cargo space in passenger planes – to reach their export destinations.

One cherry grower had decided his family could no longer wait to see how the next few years played out and was pushing their cherry orchard out.

Cherries Australia president Tom Eastlake produces about 500 tonnes of premium cherries annually on his NSW property at Young. He said the price and unpredictability of freight, labour difficulties, constraints within the domestic market and the recent uptick in farming inputs had led his family to exit the industry.

“Passenger volumes is the bulk of Australia’s cheap freight, (so) the further away that is to normalcy, the more the impact,” Mr Eastlake said.

“I’m choosing to exit the industry. Freight won’t improve, and for a medium-small producer like me who doesn’t have supermarket contracts, the squeeze has gotten too much. So we can suffer for a few years or … exit.”

There had been no surge of holiday-makers making up for lost time since Australia’s international border reopened two months ago after a two-year closure.

The number of short-term departures from Australia was less than one seventh of what it was pre-Covid, with fewer than 95,000 departures last month, according to the Australian Bureau of Statistics. That compared to about 667,000 in February 2020, just before the border’s closure.

The end of the Federal Government’s temporary International Freight Assistance Mechanism, which subsidised a portion of exporters’ highly inflated freight costs, in July was also compounding their concerns.

Craig Musson, owner of Australia’s second-biggest flower importer and exporter, Wafex, said freight was “a massive risk” for the business this year.

“Our expert season starts in July and runs until September and we’re very concerned we’re going to be competitive,” he said.

Wafex predominantly exported Australian wax flowers, proteas and roses, which competed globally with those grown in South Africa with significantly lower labour costs.

“IFAM has been a massive support to us in the last two years. Freight rates, exchange rates and labour rates; they’re all going the wrong way for us over the last few years so it makes it difficult to compete in the international market,” Mr Musson said.