What is the International Freight Assistance Mechanism?
The International Freight Assistance Mechanism (IFAM) is a targeted, temporary, emergency measure put in place by the Australian Government in response to COVID-19. The mechanism provides funding to help keep international freight routes and flights operating into and out of Australia.
IFAM has helped reconnect crucial global supply chains and supported the import of critical medical supplies, equipment and other goods of national importance. It also provides the opportunity, on the outbound legs, for high-value and time-sensitive perishable products to be exported to established markets. To date, IFAM support of flights has enabled over 160,000 tonnes to be exported or committed for export to 66 international destinations between April and early December.
By keeping key airfreight routes open, IFAM is providing Australian businesses disproportionately affected by COVID-19 time to adapt their business models, adjust to a new and tougher trading environment and preserve jobs.
When was IFAM established?
IFAM was established in April 2020 with $110 million in funding to help keep supply chains open. IFAM is led by Michael Byrne as the International Freight Co-ordinator General and Air Vice-Marshal Margaret Staib AM CSC as the Australian Government Freight Controller.
In October 2020, the Australian Government committed a further $317.1 million to extend IFAM until the middle of 2021. This is in addition to the $241.9 million injection announced in July 2020.
The additional funding also continues to support the re-building of domestic connections for producers and growers in regional and rural areas that rely on airfreight to get their products to customers.
Why is IFAM needed?
The necessary travel restrictions imposed in response to the COVID-19 pandemic resulted in an initial reduction of more than 90% of passenger flights in and out of Australia (Internal Paper prepared for the Department of Infrastructure, Transport, Regional Development and Communications, Boston Consulting Group, 2020).
This had an immediate and devastating effect on Australia’s ability to airfreight goods. As an island nation, Australia is heavily reliant on passenger flights for time-sensitive freight, with 80% of Australia’s airfreight typically carried in the bellies of passenger flights (pg.8 International Airfreight Indicator 2019, Infrastructure Partnerships Australia and Oxford Economics).
Restoring global supply chains has been vital to Australia’s COVID-19 health response and maintaining relationships between Australian businesses and their existing customers around the world. Around 35,000 jobs directly and over 120,000 jobs indirectly in the agriculture, seafood, and aviation and logistics sectors are at risk if airfreight supply chains fail – many of these in regional communities (Internal Paper prepared for the Department of Infrastructure, Transport, Regional Development and Communications, Boston Consulting Group, 2020).