Australia is a huge exporter of farm products, iron ores, and other natural resources. The export market of Australia is very big and still growing. You might be wondering about the factors affecting freight costs in Australia if you have a business in Australia, and you are looking forward to expanding to the international market. You can check sea freight Australia to get a better idea of the pricing.
Various factors affect the sea freight industry in Australia. It is largely affected by the global markets, but some local factors also influence the Australian freight industry. You can find some of the significant factors that impact the freight market and the cost in Australia in the article.
Fuel cost is a deciding factor in the cost of sea freight costs all around the globe. If the fuel price goes up, the freight costs also rise. You can track the fuel price and notice the difference in the freight costs.
The ships burn a lot of fuel, which significantly affects a company’s cost to pay for fuels. That is why it has a big role in deciding the cost of sea freight globally.
Demand for Sea Freight
The other factor affecting the costs of sea freight in Australia is the demand. When the demand increases, the cost of sea freight also increases, and vice versa. You might have to pay higher prices when the demand is higher. In this case, if you have a long-term relationship with the freight forwarder, they can offer you good deals.
In post-COVID situations, there was a surge in container demands and a shortage of containers globally. In Australia alone, there were around 50,000 containers stuck in 2020 at container parks like the Port of Melbourne and Port Botany.
The freight companies also love maintaining relationships with their customers. They even introduce special prices for their loyal customers.
Change in Government Regulations
Any change in the government regulations related to the freight industry might affect sea freight costs in Australia. The pricing for shipping might go down if the government introduces a new policy favoring the freight industry. Similarly, it can go significantly up if the government introduces a new policy limiting the operations for the freight industry.
For example, the Australian government introduced the IFAM scheme in April 2020 to enable imports of critical goods and strengthen the supply chains. The scheme received funding of AUD 317.1 million. It relieved the freight prices to some extent.
Sometimes, the government introduces new regulations to ensure the safety of shipping businesses. If that regulation increases the cost of freight, your expense for the shipment will also increase.
International events also contribute to the changes in the price of sea freight. Sometimes, the change in other countries might impact the price of freight too. In such cases, the increase in the price might be specific to that particular country. The freight costs will be lower for a country having good relations with Australia.
If a country has bad or no strategic relations with Australia, it might increase the overall cost of sea freight correspondingly. Some countries even impose extra tariffs, which further increases the cost of sea freight.
These are some of the significant factors affecting the price of sea freight in Australia. You can maintain a good relationship and reputation with your freight forwarder to get the best pricing always.