BREAKING NEWS: NSW Tipped To Close Retail Stores, Air Freight Now A Problem
The Morrison government is considering further extending its $780 million International Freight Assistance Mechanism (IFAM) scheme in a move that could overcome year end delays for CE and appliance suppliers in Australia.
The move comes as the NSW Government gets set to close down non-essential retail stores in Sydney a move that is set to hit the likes of JB Hi Fi, The Good Guys & Harvey Norman.
By cutting down International flights into Australia brands have already struggled to get goods into the Country now consumers face significant delays and price hikes for imported goods ahead of the peak Christmas period.
It’s expected that CE and appliance retailers along with specialist audio shops such as NSW based Digital Cinema will experience a surge in online demand this week as NSW moves to force people to stay at home.
The federal government will this week step in to help support businesses crippled by Sydney’s extended lockdown which is tipped to now stretch for weeks as contact tracers fail to keep up with surging Covid-19 infections – as health officials expect more than 100 new cases by Monday.
In a marked shift in policy underscoring the threat to the national economy, Scott Morrison and Josh Frydenberg held a phone hook-up with NSW Premier Gladys Berejiklian and state Treasurer Dominic Perrottet on Sunday to discuss a joint financial assistance package for businesses that will be devastated by the prolonged shutdown.
There is now concern that stock for online sales could be affected as new international arrival caps force airlines flying cargo to consider pulling out of the Australian market.
The Australian Financial Review claims that freight experts are claiming that more assistance and planning is needed to avoid shortages of key goods, including consumer electronics and toys which are in demand during lock downs.
National cabinet’s international arrivals cuts are due to come into force on Wednesday, halving the cap to just 3035 people arriving in the country per week after a revolt from Labor states demanding pressure be taken off the hotel quarantine system.
But specialist freight consultant Frederic Horst said the cuts represented a significant chunk of Australia’s inbound capacity and would hurt cargo.
Mr Horst managing director of Cargo Facts Consulting claimed “[Airlines] are going to charge more for tickets, or charge more for air freight coming out of Asia and the Middle East, and that is where you are going to see price increases,” Mr Horst, the managing director of Cargo Facts Consulting, said.
“Its basically air freight rates are going to go higher, and the capacity is already tight at the moment. You’ve got to remember too that we are at the moment is a peak for air freight costs globally”.
He said supply for the consumer Christmas rush would face unprecedented pressure.
“The problem is accentuated in Australia more than anywhere else because we rely on belly capacity more than most. For Australia, the number of freights coming in on the belly of a passenger aircraft is about 80 per cent; globally it’s closer to 50 per cent.
“On something like an iPhone, you probably won’t notice the price hike as much because it is a higher-end, luxury electronic. But you’ll probably see a far larger impact on toys and smaller electronics.”
Australian Retailers Association chief Paul Zahra told The Australian Financial Review he was deeply concerned about the cut to incoming flights and flow-on effects to the supply chains of Australian retailers that are reliant on sourcing their products from overseas.
“This comes at a time when businesses are already dealing with global supply chain issues and high shipping costs due to COVID impacts outside of their control,” he said.
“The federal government should continue to work collaboratively with industry to understand and support freight channels to ensure customers can get the products they want.”
Carriers are concerned about the cuts, especially those running three to four flights into Sydney per week.