International travel resumes, but ag exporters sticking to sea freight

Pre-Covid international travel is half of what it was before the pandemic, but increasing passenger planes aren’t being filled with agricultural goods.

Many agricultural exporters will not return to transporting their produce in the bellies of passenger planes, despite international travel slowly returning to pre-pandemic levels.

Substantially increased costs and the ending of a federal government airfreight subsidy scheme has pushed exporters away from the skies for good.

New Australian Bureau of Statistics data shows international travel during July was at its highest level since the pandemic began in 2020, with provisional arrivals and departures reaching 54 per cent and 55 per cent respectively of July 2019 levels.

But the uptick in international travel has not led to a corresponding increase in agricultural airfreight exports.

International travel is just over half of what it was two years ago, before the Pandemic ground the industry to a halt. Picture: Speed Khan / AFP

Australian Meat Industry Council chief executive Patrick Hutchinson said prior to Covid the nation’s meat industry was sending $1 billion of product overseas via airfreight.

But he said the pandemic put pressure on the industry to explore sea fright as a viable alternative and few have looked back.

“Everyone has gone towards managing sea freight,” Mr Hutchinson said.

And he predicted there wouldn’t be a dramatic shift back to airfreight either, given the federal government’s subsidy scheme, the International Freight Assistance Mechanism, was wound up at the end of June.

The government set-up dedicated airfreight routes to more than 50 locations including China, Singapore and the Middle East for producers, with cost subsidies, to replace the loss of passenger planes due to Covid travel bans that they relied on to export their goods.

Horticulture was one of the biggest users of the IFAM program, but it’s too early in the season for exporters to be considering whether to send their produce off shore in search of better prices.

Red meat is currently the biggest agricultural export, but Meat and Livestock Australia manager of global trade development Tim Ryan said overseas demand for the product was still playing catch up to pre-Covid levels.

“Market forces are driving airfreight volumes at the moment. In the Middle East, our traditional airfreight market, we’re yet to see a shift back,” Mr Ryan said.

He said the pandemic had led to a structural, long-term shift that he saw as advantageous to the industry.

“Traditionally airfreight has been an expensive option and you only choose airfreight if you have to, (but) if you can unlock sea freight it’s a lot more affordable and you can get products into the market cheaper and be more competitive. We have arguably the best shelf life in the world, so we have a really compelling value proposition.”