Air Freight Replaces Ocean Freight For CE Marks As Costs Rise
Cargo flights could become the new normal for getting consumer electronics and small home appliances to Australian stores amid shipping issues and rising shipping costs, analysts say.
Airports such as Sydney are now looking to build new cargo facilities to meet the dramatic increase in demand for air cargo.
At the same time, freight operators have seen an increase in dedicated cargo flights to and from Sydney Airport during the COVID-19 pandemic, Chief Executive Officer Geoff Culbert, and this could continue as as the demand for online shopping increases.
Several brands told ChannelNews they had to resort to air freight because of a “quadrupling” in the cost of a 40-foot sea container.
Speaking to the Australian Financial Review, Culbert said the switch to air freight is not an accident but part of a long-term trend, justifying the airport’s decision to develop a larger hub for freight and logistics, said managing director Geoff Culbert.
Sydney Airport’s non-aeronautical commercial director Vanessa Orth said demand for freight flights is expected to remain strong even after the new Western Sydney Airport – which will operate 24 hours a day when it opens in 2026 – because of many freight operators had service agreements on how quickly they delivered their packages.
Sydney Airport is approximately 12 kilometers from Sydney CBD while Western Sydney Airport will be approximately 44 kilometers.
Several freight operators who had long-term leases at the airport were looking for more space, Ms Orth said. The airport negotiated 25 new real estate deals at 58 locations in six months until June after the leases expired and secured a 21% increase in rental rates
Flights carrying cargo to and from Sydney Airport have more than tripled since mid-2019, from 5,120 movements in the 12 months in 2019 to 18,301 movements in the 12 months to June 2021, depending on the airport.
While the big jump partly reflects passenger airlines putting cargo in holds previously used for suitcases and strapping crates in seats, it also reflects the wider shift to online shopping, Culbert said. at AFR.
76,183 tonnes of cargo were transported to and from Australia in May, up 16% from the same month a year earlier, according to the Bureau of Infrastructure, Transport and Regional Economics (BITRE.)
The three largest freight carriers in May 2021 were Singapore Airlines, Qantas and FedEx, with Sydney-Singapore the busiest route.
Brands struggling to fit containers outside of China en route to Australia are moving CE and small devices to Vietnam and Singapore claims a big PC company.
Sydney Airport handled 61% of all cargo entering and leaving Australia during the month, up from around 47% before the COVID-19 outbreak, with Melbourne handling 24%.
The airport, which projects it will handle more than one million tonnes of cargo per year by 2039, is studying how to increase its cargo and logistics capacity as part of a larger property development plan.
He identified some 107 hectares of airport land available for development, including 25 hectares occupied by the Qantas Jet Base. Qantas’s lease expired last year.
“The pipeline assessment is underway right now, and we are well advanced on a series of different decisions,” Culbert said.
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