The impact on international trade across G20 economies varied widely in the first quarter of 2020, with Australia’s exports falling by 3.7 per cent. Read more
The Department of Home Affairs, which manages revenue and payment of liabilities on imports, has confirmed that they will consider requests for payment plans and other leniency measures related to COVID-19. Read more
The $125 million Port of Melbourne’s Port Rail Transformation Project (PRTP) is set to go ahead and take effect on June 1 this year.
The Australian Border Force (ABF) has stated that as of 26 March, the ABF has not issued any advice relating to goods prohibited for export in response to the COVID-19 pandemic.
Shipping lines are being urged to provide detention relief as a strike at the wharf causes container havoc for Australian shippers and transport operators. Read more
A new report by Infrastructure Partnerships Australia and BIS Oxford Economics’ shows the goods travelling in the belly of international aircraft arriving and departing Australia are worth a massive $109 billion annually.
The 2019 International Airfreight Indicator, the latest report in Infrastructure Partnerships Australia’s data and measurement series, reveals that one in every five dollars of Australia’s traded goods travels via air.
“Every day, more than 550 international flights arrive and depart Australia, yet until now, we have been remarkably blind to the value, the type of commodity, and the economic contribution of goods that travel in the belly of these aircraft,” said Infrastructure Partnerships Australia chief executive Adrian Dwyer.
“The 2019 International Airfreight Indicator shines a light on a multi-billion industry that has historically gone unnoticed in our broader trade debate.
“The indicator shows that airports are crucial to our trade story, and the cargo transported beneath passengers is vitally important to airlines, airports and the Australian economy.
“Last year alone, $109 billion of international trade passed through Australia’s airports, with airfreight set to top $114 billion this financial year.
“Whilst airfreight only represents 1 per cent of Australia’s trade volume, it punches well above its weight in value.
“One in every $5 of Australia’s imports and exports travels via our airports – making the airfreight sector one of the largest value contributors to Australia’s trade position.
“In a period of heightened trade tensions and structural economic change, it’s critical that we use data like that presented in the 2019 International Airfreight Indicator to improve the way we plan, regulate and invest in our freight sector.
“Without useful data to examine and measure our freight sector we will be flying blind on our international trade.
“That is why we have called on Government to establish a dedicated freight body to independently measure and publish detailed analysis of the overall performance of our logistic and supply chain networks,” Mr Dwyer said.
Some of the findings:
- In FY2017-18, $109 billion of international trade passed through Australia’s airports, with more than 96 per cent of international airfreight passing through the four main capital city airports – Sydney, Melbourne, Brisbane and Perth.
- Whilst airfreight only represents 1 per cent of Australia’s trade volume, it represents 21 per cent of goods in trade value.
- The amount of goods flowing in and out by air is now 70kg for every person – a 60 per cent rise in the last five years. This reached a record high over FY2017-18.
- More than 80 percent of our airfreight is carried in passenger aircraft, with the balance carried in dedicated freight aircraft.
Business information analysts IBISWorld believes Australia stands to be caught in the middle of a trade war between the United States and China, as the world’s two largest economies launch increasingly retaliatory tariffs at each other.
While some local industries may become more exposed to risk as a result, IBISWorld believes Australia will also have the rare opportunity to seize export market share in both markets.
“Australia is one of the best-placed countries in the world to reap the gains of a trade war, due to our natural advantage of having ease of access to maritime trading with both major economies,” said senior analyst at IBISWorld Jason Aravanis. “In addition, Australia has beneficial bilateral free trade agreements with both China and the US, which provide more stability to international trade.
“While the trade war presents opportunities for some sectors, others will likely be at greater risk, as Australia is being caught between its largest trade partner and its largest investor – between the economy we rely on and the nation we look to for our security.”
Why USA and China matter to Australia
According to IBISWorld, the United States and China are both vital trading partners for Australia, but for different reasons.
China is Australia’s largest two-way trading partner, accounting for 17.7% of all imports into Australia and 29.6% of Australian exports in 2016-17. As such, the Australian economy is intrinsically tied to the performance of the Chinese economy. Many industries rely on Chinese demand for exports, or Chinese supply of imported production inputs.
The United States is Australia’s third largest trading partner, after Japan. However, the United States is the largest foreign investor in Australia, with over $860 billion invested in 2016. In contrast, China is only the seventh largest investor in Australia.
As China and the United States increasingly lock each other out of their domestic markets, certain Australian industries have the ability to seize market share.
“The Australian agricultural sector is likely to be one of the largest winners, as China has enacted tariffs on popular US food products,” said Mr Aravanis.
In 2017-18, China is expected to account for 25.1% of export demand in the Australian Wine Production industry, and this is forecast to grow in response to a 15% tariff imposed on US wines this month. Similarly, a 25% Chinese tariff on US soybeans will create massive opportunities for the Australian Grain Growing industry, particularly as China consumes about two-thirds of global soybean production each year. Rising demand for premium meats in Chinese households has led to strong growth in Australia’s Meat Processing industry, and this industry’s performance is expected to further improve as a 25% tariff is imposed on US meats. Other Australian agricultural industries are also likely to benefit, including fruit and seed industries.
According to IBISWorld, some Australian industries also have the opportunity to gain market share in the United States, however, Australian exports are likely to encounter greater competition from other countries in this market, such as Canada, Brazil, and the European Union.
“As the United States has imposed a 25% tariff on steel and 10% tariff on aluminium from China, the Australian Black Coal Mining and Aluminium Smelting industries may experience greater demand from US clients. In addition, US tariffs on Chinese chemicals, medicinal products, and electronic components are likely to create opportunities for Australian firms,” said Mr Aravanis.
Despite the positive gains for some Australian industries, others are likely to be negatively affected by a trade war.
“On a macro-economic scale, a downturn in either Chinese or US GDP growth is highly likely to undermine the growth of Australia’s GDP. This could lead to an increase in unemployment, as well as a sustained hit to business confidence as the stability of trade liberalisation in undermined,” said Mr Aravanis.
“Some industries are highly exposed to the risk of a trade war. Major mining industries such as the iron ore mining industry could be affected by a slowdown in Chinese economic growth, which would lead to far lower export prices and total demand. Tourism in Australia would also likely be negatively affected, as a hit to consumer confidence in both China and the United States would encourage consumers to postpone luxury expenses such as international holidays.”
Despite these challenges, IBISWorld believes the overall Australian economy is well placed should a trade war eventuate, at least relative to the conditions of other global economies. However, a trade war would likely lead to an overall decline in economic prosperity for Australia.
Tariffs imposed by China and the United States against each other:
|Soybeans and grains||25%|
The Australian Border Force (ABF) has launched an awareness campaign to encourage the Australian community to support the work of the ABF by reporting suspicious or illegal immigration, Customs and border-related activity to Border Watch.
It is critical that the ABF partners with the community — including business and industry — to help keep Australia safe. Reports to Border Watch help the ABF to investigate, detect and stop illegal and dangerous activity, the organisation said.
ABF Assistant Commissioner Strategic Border Command Kaylene Zakharoff said the ABF has seen some extremely positive outcomes thanks to the reports made by industry. These reports have been instrumental in hundreds of seizures of illicit drugs, tobacco, weapons and wildlife, as well as a number of immigration and visa related operational outcomes.
“In just the second half of last year, the ABF received in excess of 21,500 Border Watch reports, which led to over 1.4 tonnes of drugs and precursors being seized,” she said.
Recently, information was received from a customs broker through Border Watch about a sea cargo consignment. The broker noticed several suspicious things about the shipment that raised potential concerns around its stated contents.
The referral to Border Watch resulted in a large seizure of methamphetamine, located within the consignment, with a street value of over $150 million. This seizure prevented the potential manufacture of over 1.5 million hits of ice.
“Business and industry members are often well placed to identify suspicious activities in their industries and local areas. You or your business can play an important role in helping to protect the border, the economy and the safety of the community by reporting suspicious activities to Border Watch. You don’t have to give your name,” Assistant Commissioner Zakharoff said.
The Border Watch program and its predecessors, Customs Watch and Customs Hotline, has a proven track record of more than 20 years of delivering positive outcomes at the border and has become an integral part of the ABF’s information gathering methods.
By continuing to report suspicious activity to Border Watch, you or your business can help the ABF to stop illegal activity.
The types of reports to make to Border Watch relate to:
- Customs and border-related offences such as drug and precursor imports, revenue/duty evasion, illegal currency movement, movement of weapons and firearms, and imports of illicit tobacco
- Immigration offences such as people smuggling, illegal work operations, contrived relationships, false statements, visa overstayers and employer sponsor breaches.
If you see anything suspicious, business and industry are encouraged to report it to Border Watch via the industry premium number 1800 06 1800. Alternatively, you can flag it anonymously with Border Watch at www.australia.gov.au/borderwatch or contact the program via firstname.lastname@example.org.
If you or your business are involved in international trade or transport sectors, you are strongly encouraged to partner with the ABF by joining the Border Watch industry program. To find out more, visit www.australia.gov.au/borderwatch.
The 2017 Tmall Global Annual Consumers Report has revealed Australia has moved into third spot, on the list of importer countries into China, on Alibaba’s business-to-consumer (B2C) platform. This is up from fourth spot in 2016.
Led by strong demand from Chinese consumers for Australia’s health and nutrition supplements, baby products and milk powder, Australia ranked behind only Japan and the United States, and ahead of Germany and South Korea.
Managing Director of Alibaba Group, Australia and New Zealand Maggie Zhou said: “Since opening our ANZ headquarters in Melbourne last year, we have worked harder than ever to support the success of Australian businesses in China. These incredible results for Australian merchants demonstrate that we are succeeding in our mission to make it easier for local businesses to do business anywhere.
“With 515 million annual active consumers now using our China retail marketplaces the opportunity for Australian businesses remains enormous, and we are excited to be part of the China journey for even more local brands in 2018.”
The 2017 Tmall Global Annual Consumers Report was jointly published by Tmall Global and CBNData, a big data-based business research and integrated marketing communications strategy platform. Elsewhere, it found that Chinese post-millennials have become the main purchasing power for imported products, with content and emotional interaction becoming a major factor in driving consumers’ decisions when buying imported products.
The report highlighted that people born in the 1990s have now become the biggest spenders on imported products, which come from a more diverse range of countries and are consumed more frequently throughout the year.
Tmall Global sustained its position as the largest B2C e-commerce platform for imported products in China, with a market share of 27.6% in the fourth quarter of 2017. There is still significant untapped potential in this sector, with the report estimating annual growth of 20 per cent in transaction volume and a market scale of RMB620 billion by 2019.
Award-winning Australian international logistics company and freight forwarder, VISA Global Logistics, is joining inaugural supply chain event, MEGATRANS2018, to showcase its service offerings.
VISA Global Logistics CEO, Simon Hardwidge, said that MEGATRANS2018 is not just about equipment suppliers, it embraces the entire freight and logistics chain.
“As a global enterprise with dealings with importers, exporters, retailers and manufacturers, VISA Global Logistics is seizing an important opportunity to represent at MEGATRANS2018 to demonstrate how we add value to our clients,” said Hardwidge.
“As one of Australia’s largest privately-owned international freight forwarding companies, we have an extensive global network that continues to grow.
“Last year alone, the company acquired offices in India, Spain and the Netherlands while opening new facilities in Italy. In order to remain competitive, and to look to the future, it is vital for businesses in the freight and logistics space to push innovation and share ideas.”
VISA Global Logistics was awarded the Freight Forwarder of the Year Award at the 2017 Australian Shipping & Maritime Industry Awards.
MEGATRANS2018 aims to bring together leaders and stakeholders in the wider Australian and international supply chain, including those in the transport, logistics, warehousing solutions, materials handling and infrastructure sectors.