Major delays of critical goods to farmers

Rural transport impact of Ansett collapse / US terror attack

The transport of critical goods to farmers could be severely affected by the collapse of Ansett, Logistics Bureau director Maurice Sinclair said today.

And the costs for overnight parcel delivery services between Australia’s regional centres could skyrocket, Mr Sinclair said.

“Many requests from the farmers are based on access to emergency spares to keep machinery operating,” he said.

“Other forms of transport, such as road, rail and small commercial planes, will have to be explored to meet the demand but at a cost to the man on the land.”

Mr Sinclair said US-made goods bound for the Australian agricultural industry had suffered major delays because of the grounding of all US flights and a backlog of orders was building.

“Failure to procure the goods in a short time frame can cost farmers thousands of dollars through loss of production,” Mr Sinclair said.

Without a viable air freight alternative the lead time associated with procuring goods through the more conventional methods of rail and road will be considerable.

This in turn will require come farmers to hold an inventory of high dollar value spares to compensate the “just in case” risk.

“More inventory means reduced asset utilisation and greater deployment of funds into non-cash working capital, all of which have an impact on profit.”

Mr Sinclair said the overnight parcel delivery service market relies on passenger planes, and although Qantas will take on a bulk of Ansett’s deliveries should the freight business not be resurrected, there would be an impact on these services.

“Despite the boom in electronic messaging there is still a major demand for the overnight delivery of documents and parcels, regionally and interstate,” he said.

The collapse of Ansett freight will affect both domestic and international services as other major international freight forwarders often rely on company’s like Ansett for feeder services into capital cities.

This may provide opportunities for smaller air-based transport companies to step in and deliver these commercially-essential services.

“Given the limited competition in the domestic air freight market, the Ansett demise will place pressure on what customers will pay for these services.”

Australia’s mining industry will also be affected because of its reliance on Ansett’s services to isolated locations like Roxby Downs and Kalgoolie.

Mr Sinclair said companies like Caterpillar needed to send machinery, equipment and spare parts to keep operations moving and failure to do so could severely affect production.

 

Best Regards,
Rob O'ByrneRob O’Byrne
Group Managing Director
Email: [email protected]
Phone: +61 417 417 307