International Freight Assistance Mechanism

 

IFAM is a temporary Australian government funded measure to help restore critical global supply chains which have been impacted by COVID-19 containment measures around the world. 

Below are several key highlights from that briefing:

  • 80-90% of freight travels in the belly of passenger aircraft so COVID19 restrictions on international travel have seen cargo rates increase up to 15-fold 
  • IFAM has reduced cargo rates, but they’re still considerably higher than pre-COVID and are reserved for high-value perishable exports 
  • Freight rates are unlikely to decrease until about 30% of pre-COVID passenger traffic is achieved – not predicted to happen until 2022 
  • Freight rates will not go back to pre-COVID levels until passenger traffic returns close to pre-COVID levels – not predicted to happen until 2024 
  • All IFAM cargo space is fully booked up to 5 December 2020 
  • IFAM will not cater for small tonnages, so smaller cargoes will need to be consolidated 
  • IFAM will soon begin “take and pay” arrangements, where exporters will pay for the cargo space they book, regardless of whether they use the full allocation or not 
  • Quentin Masson has just been appointed Queensland IFAM Director and will be collating real-time data, coordinating between agencies and generally supporting stakeholders 
  • 54% of air cargo is currently leaving from Sydney, because major warehouses for Telstra and other telecommunications companies are located there. This inbound traffic determines available outbound traffic. 

What it means for you 

  • Exporters of high-value perishables need to honestly assess their business models and decide whether they can stay profitable with elevated freight costs over the next 2-4 years; 

  • Exporters need to book their cargo space immediately if they hope to use IFAM to export before the end of the 2020 calendar year 

  • Exporters of smaller cargoes need to work with other parties to consolidate shipments to make them practical for IFAM use 

  • Consider sea freight if your exports are non-perishable

  • Plan for "take and pay" arrangements on cargo bookings

  • Exporters to consider alternative logistics for their freight to go to Sydney as 54% of air-cargo is leaving from Sydney