COVID-19 Update: Transport and logistics

International Freight Assistance Mechanism

The drastic cuts to passenger flights in response to the COVID-19 pandemic have had a major impact on Australia’s air freight industry and, as a result, on Australian agricultural businesses, manufacturers and other suppliers.

In response, the Federal Government has established the International Freight Assistance Mechanism (IFAM) to assist exporters and to help re-establish global supply chains.  Essentially, the Government will subsidise the freight costs for items which have been deemed eligible by the Department of Agriculture, Water and the Environment.

IFAM supported flights will depart from Sydney, Melbourne, Brisbane, Adelaide and Perth and travel to China, Japan, Hong Kong, Singapore, New Zealand, Taiwan and the Middle East.

While the focus of IFAM is on the export of high-value perishable items such as agricultural and fisheries products (particularly seafood, red meat, dairy and horticulture), one of the first IFAM supported flights has included mining equipment which was transported from Adelaide to Singapore.  There is also some indication that respirators manufactured in Australia will be deemed eligible for the subsidy.

On the return flights, the IFAM program is focused on bringing medical supplies back to Australia.

To seek IFAM assistance, exporters must lodge an Expression of Interest with the Department of Agriculture, Water and the Environment who will assess whether the product is eligible.  If the exporter is eligible for assistance, the exporter can then contact their Freight Forwarder who will coordinate with the IFAM providers.

The Federal Government is also supporting domestic air freight by making some funding available to commercial airlines to maintain connectivity for freight, medical supplies and other essential air travel.

Heavy Vehicle National Law

The heavy vehicle industry has faced a range of challenges due to COVID19.  There have been significant market changes to the demand for products and storage facilities as well as significant practical issues such as changes to border crossings and to access facilities at roadhouses.

In recognition of the critical role that road freight plays in the Australian economy, the Federal and State Governments have announced various changes to the usual laws regulating the road freight industry including the Heavy Vehicle National Law.

On 1 May 2020, the Federal Government published the National COVID-19 Emergency (Public Holiday Travel Condition) Derestriction Notice 2020 (No.2) under the Heavy Vehicle National Law to remove certain travel condition restrictions on heavy vehicle travel times during the COVID-19 Emergency.  The restrictions are those relating to travel on State controlled roads during public holidays which normally serve to reduce heavy vehicle traffic at peak holiday travel times.  This Notice will expire on 31 May 2020.

The Federal Government has announced a freeze on heavy vehicle road user charges at 25.8 cents per litre for diesel in 2020-21 instead of increasing by the scheduled 2.5%.

The National Heavy Vehicle Regulator has waived restrictions on all curfew permits, except those related to safety and access, to move general freight and grocery deliveries as part of the national response to COVID-19.  These arrangements will be reviewed on 19 June 2020.

In the meantime, the National Transport Commission’s review of the Heavy Vehicle National Law is ongoing.  The next phase will involve a Consultation Regulation Impact Statement on which the industry and general public will be invited to comment.  It will be interesting to see whether any of the temporary changes will be raised in this stage and the policy options that are developed afterwards.

SWS Lawyers advise clients in the transport and logistics sector on a range of legal matters including procurement, leasing, employment law and liability under the Heavy Vehicle National LawPlease contact Richard Suters, Principal and Elizabeth McDonald, Principal, for further information.