August 10, 2020
The government’s International Air Freight Capacity scheme has been extended until at least the end of August, making international airline cargo newcomer Freightways one of the largest trans-Tasman operators since New Zealand’s lockdown began on March 25.
Freightways was awarded the contract in May for just two months initially, but with borders still shut is continuing to provide reliable freight capability between Auckland, Christchurch, Sydney and Melbourne.
The freight operator has also found a strong niche for its trans-Tasman flights, with crayfish, blue cod, flounder and mussels making up a large portion of the 1million kilograms per month of Kiwi product landing in Australia’s top restaurants and retail outlets as a result.
“It’s good to know the Aussies aren’t going without,” quips Neil Wilson, General Manager of Freightways.
“On a more serious note, we’re glad to have adapted quickly to provide Kiwi export businesses some certainty after freight became near impossible to move when the borders closed.”
As a result of the scheme’s success and extension, Freightways has purchased over 200 extra airfreight containers mainly from Singapore to cope with the volumes which has it moving over 250,000kg of produce per week.
The listed company was able to step in almost immediately once borders closed to keep exports and imports moving with our nearest trade partner, using its freighters in partnership with Parcelair and adding daily flights to Australia’s two largest cities whilst maintaining its overnight domestic service.
While not without its challenges, the scheme has meant that local operators - from large fish exporters through to smaller players - have been able to remain profitable.
Canterbury Seafoods, a small family-owned export company based in Christchurch, saw that despite the logistical challenges with fewer flights available, fair freight costs have been maintained thanks to the scheme.
“We’ve been able to sustain our standard weekly export volumes of around 1.5 tonnes of fresh fish supplied to key seafood markets in Australia.
“With sixty per cent of our business reliant on exports, we hope this will increase as the seafood season approaches and reliable flight schedules continue,” says Isaac Box, Operations Manager.
International freight is usually carried in the belly of passenger airlines, but with 95 per cent of flights cancelled during New Zealand’s lockdown and beyond, exporters were faced with few options and rising costs to move product.
Operating passenger aircraft to move freight only is not cost-effective as the bulk of the aircraft space is designed around passenger requirements with only a smaller amount in the aircraft belly reserved for baggage and freight available to use. As a result, once the regular flow of international passengers stopped the cost per kilogram to move freight increased by over 300 per cent spurring the government to implement the scheme.
“It’s a good news story to keep these businesses ticking and we tip our hat to our team who made it look easy.
“When we set up the international service, we didn’t even have an automated booking system so the process has been an absolute human effort from those working through the logistics to our locally based pilots meeting quarantine restrictions by not leaving the aircraft and flying back on the same rotation,” says Neil.
Freightways’ ability to mobilise 737 freighters with a capacity of 18 tonnes per aircraft has improved costs, plus given exporters certainty that delicate produce like crayfish will arrive at market when required.
“Our fleet is already set up for chilled goods and perishables and our flights are designed to get high quality seafood to the key Australian fish markets on the same day. It’s a win-win for Kiwi exporters and for our hungry neighbours,” says Neil.
Currently the operation is running twelve sectors per week between Auckland and Christchurch, Sydney and Melbourne, with Australian product also making its way back to New Zealand on the return flights.
“At this stage the contract has been extended until at least 31 August however with the developing situation in Victoria, the agreement will likely extend.
“It’s been a godsend for Kiwi exporters to get product to Australia and it was a natural extension of our operations. We’re really happy we’ve been able to keep these businesses thriving and, in some cases, provide a more competitive model to what they had pre-Covid,” says Neil.
Freightways Limited (NZE: FRE) has varied business operations in New Zealand and Australia split into three core portfolios, Express Package, Business Mail and Information Management. Listing on the NZX in September 2003, today its portfolio of brands includes New Zealand Couriers, Post Haste Couriers, Dataprint, DX Mail, SUB60, Stuck, Now Couriers, Kiwi Express Couriers, Castle Parcels, Security Express, Pass The Parcel, Lit Support, Shred-X, Med-X, TIMG, Freightways Information Services, Fieldair Holdings Limited and Parceline.