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Air Freight Replacing Sea Freight For CE Brands As Costs Rise

Freight flights could become the new norm to get consumer electronics goods and small appliances, into Australian stores due to sea shipping problems and rising shipping costs claim analysts.

Airports such as Sydney are now looking to build out new freight facilities to cater for the dramatic increase in demand for airfreight.

At the same time freight operators have seen a surge in dedicated freight flights in and out of Sydney Airport during the COVID-19 pandemic chief executive Geoff Culbert claims and this could continue as demand from online shopping grows.

Several brands have told ChannelNews that they have had to resort to airfreight due to a “quadrupling” in the cost of a 40-foot shipping container.

Speaking to the Australian Financial Review Culbert said that the move to air freight is not a blip but part of a long-term trend, justifying the airport’s decision to develop a bigger freight and logistics hub, chief executive Geoff Culbert says.

Sydney Airport’s non-aeronautical chief commercial officer, Vanessa Orth, said demand for freight flights was expected to remain strong even after the new Western Sydney Airport – which will operate 24 hours a day when it opens in 2026 – because many freight operators had service agreements about how fast they delivered their packages.

Sydney Airport is about 12 kilometres from the Sydney CBD while the planned Western Sydney Airport will be about 44 kilometres away.

Several cargo operators that had long-term leases at the airport were looking for more space, Ms Orth said. The airport negotiated 25 new property agreements on 58 sites in six months to June after leases expired, and secured a 21 per cent increase in lease rates

Flights bringing freight in and out of Sydney Airport have more than tripled since mid-2019, rising from 5120 movements in the 12 months to 2019 to 18,301 movements in the 12 months to June 2021, according to the airport.

While the big jump partially reflects passenger airlines putting cargo in holds previously used for suitcases and strapping boxes into seats, it also reflects the broader shift to online shopping, Mr Culbert told the AFR.

76,183 tonnes of freight was carried in and out of Australia in May, up 16 per cent on the same month a year earlier, according to the Bureau of Infrastructure, Transport and Regional Economics (BITRE.)

The three biggest freight carriers in May 2021 were Singapore Airlines, Qantas and FedEx, with Sydney-Singapore the busiest route.

Brands struggling to get into containers out of China enroute to Australia, are trans shipping CE and small appliances to Vietnam and Singapore claims one major PC Company.

Sydney Airport handled 61 per cent of all freight that came in and out of Australia during the month, up from around 47 per cent before COVID-19 broke out, with Melbourne handling 24 per cent.

The airport, which forecasts that it will handle more than 1 million tonnes of freight annually by 2039, is investigating how to boost its freight and logistics capacity as part of broader property development plan.

It has identified some 107 hectares of airport land available for development, including 25 hectares occupied by Qantas’ Jet Base. Qantas’ lease expired last year.

“The pipeline assessment is happening at the moment, and we’re well advanced on a range of different decisions,” Mr Culbert said.

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