International Airfreight in Sydney

IPA/BISOE report highlights Sydney as a key airfreight hub

 

As an economic development organization, RDA Sydney has for many years recognized the importance of freight and logistics to the Sydney and national economies. RDA Sydney has facilitated a number of forums and participated in task forces aimed at improving freight and logistics planning and skills development.

 

Quantifying the freight task has been vital in planning infrastructure, measuring the impact of new freight infrastructure, as well as identifying changes to the freight task and business trends. However, while there have been frequent reports detailing the number of trucks and containers through our ports or on our roads, or the increasing capacity of the freight rail network, there has been little information about airfreight.

 

A recent report by Infrastructure Partnerships Australia and BIS Oxford Economics (IPA/BISOE) gives detailed information about international airfreight to and from Australia’s airports based on unpublished data from the Australian Bureau of Statistics.  Of particular interest is the type, size, and value of airfreight at Sydney Airport.

 

The report highlights the following about the airfreight task at Sydney Airport:

  • Sydney Airport accounted for approximately 45% of all Australian airfreight imports/exports in 2017/18;

  • Imports through Sydney Airport were 306,000 tonnes in 2017/18 while exports were 225,000 tonnes;

  • The estimated value of imports through Sydney Airport was $39.6 billion in 2017/18 and exports $12.9 billion.

 

 

Sydney Airport Exports

IPA/BISOE were able to identify approximately 75% of exports from Sydney Airport by both value and tonnage (the remainder did not have a known classification).

Sydney Airport – Leading International Export Categories 2017-18 (based on value)

Source: Infrastructure Partnerships Australia / BIS Oxford Economics “2019 International Airfreight Indicator”

The leading three sectors by tonnage were in the agribusiness sector – prepared foodstuffs, beverages, spirits and vinegar etc.; vegetable products; and, live animals and animal products. Together, these three sectors make up 47.7% of airfreight exports out of Sydney by tonnage.

By value, however, the lead sectors are machinery and mechanical appliances, electrical equipment; sound and television equipment; optical, photographic, medical or surgical instruments etc.; and, chemical and allied industry products. These three sectors made up 56.4% of exports by value in 2017/18.

Sydney Airport Imports

The IPA/BISOE report notes that, by mass, approximately 40% of imports don’t have a known ABS commodity classification while the value of these unknowns is only 11% of total imports.

The leading three sectors for imports by tonnage are machinery and mechanical appliances, electrical equipment; sound and television equipment; chemical and allied industry products; and, textiles and textile articles. Together, these three classifications make up 118,840 tonnes or 38.8% of total imports.

Sydney Airport – Leading International Import Categories 2017-18 (based on value)

Source: Infrastructure Partnerships Australia / BIS Oxford Economics “2019 International Airfreight Indicator”

By value, the three leading categories of imports are machinery and mechanical appliances, electrical equipment; chemical and allied industry products; and, optical, photographic, medical or surgical instruments etc. These three categories made up an incredible 84.0% of all imports by value in 2017-18.

 

What does all of this mean for Sydney freight?

One of the interesting areas to explore in follow-up to the data analysis by IPA/BISOE would be around the demand for airfreight out of Sydney and whether it is being met. According to a submission by Sydney Airport to the National Freights and Supply Chain Strategy dated 26 July 2017, only 2.4% of flights into and out of Sydney are dedicated freight flights (both domestic and international). Around 80% of total airfreight is carried in passenger flights. In the same submission, Sydney Airport comments that freight contributes about 9% of airline revenue meaning that the airfreight task becomes an important consideration in route profitability.

 

According to the Sydney Airport Master Plan 2039, total airfreight at Sydney Airport is expected to grow to 1 million tonnes, an increase of 58%.

Western Sydney Airport is due for completion in 2026 and, as a 24/7 airport, there will be increased opportunities for dedicated freight flights. The preliminary design for Western Sydney Airport includes throughput capacity of 220,000 tonnes and a facility of 65,000 sqm. However, these figures are likely to change as stakeholders are consulted and airport development progresses.

Sydney is a critical port for Australian airfreight imports and exports and one can only imagine that this will grow even stronger once Western Sydney Airport is operational. Planning for freight infrastructure for the new airport as well as for Sydney Airport will continue to be a high priority to ensure that the landside freight task remains as efficient as possible and does not contribute to or is not adversely affected by urban congestion.

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