COVID-19 impacts on freight

Air freight

There was a drastic decline in international air passenger and air freight services as nations closed borders and introduced strict compliance requirements. From June 2019 to June 2020, international passenger services were down 98 per cent to 65,000 passengers carried, with international air freight volumes experiencing a decrease of 23 per cent over the same period. Domestic freight volumes on scheduled flights were also down 16 per cent over the same period and passenger numbers were down 92 per cent. By June 2020, the majority of international flights were freight-only.

Figure 1: Passengers and freight carried on scheduled air services to and from Australia

Figure 1: Passengers and freight carried on scheduled air services to and from Australia

Figure 2: Decline in domestic air freight - top 5 cities

Australia

-16%

Adelaide

-23%

Perth

-47%

Brisbane

-2%

Sydney

-19%

Melbourne

-11%

Surface transport

Road and rail freight has not seen the same levels of reduced activity as other sectors. The Bureau of Infrastructure, Transport and Regional Economics (BITRE) estimates that of national vehicle kilometres travelled (VKT) based on GPS-probe data, heavy vehicle VKT did not decline significantly during the peak of COVID-19 restrictions and is currently estimated to be above pre-COVID-19 levels.

Transurban toll road data between December and July also supports this, showing that truck activity on Sydney toll roads did not decline significantly, despite a significant drop and gradual recovery for car activity. This reflects road freight resilience through the pandemic, and the critical role it has played throughout the pandemic in keeping up supply.

Similarly, the Australian Rail Track Corporation (ARTC) reported increases of as much as 13 per cent across its national rail network to meet increased consumer demand. Extra rail freight services ran across the Sydney network to service increased demand for essential supplies and exports, using infrastructure freed up by reduced commuter services during peak periods.

Figure 3: National vehicle travel

Figure 3: National vehicle travel

Since March 2020, the data has showed signs of increasing freight activity, ensuring that supplies were reaching Australian communities and keeping export supply chains open:

Online shopping and home deliveries
Aside from disruptions due to border closures and increased health compliance requirements, COVID-19 has impacted the nature of freight by greatly accelerating the trend towards online shopping and home deliveries. Shifts in consumer behaviour are clear – spending on food delivery has increased 192 per cent and with parcel volumes up 80 per cent compared to last year. To meet the unprecedented parcels demand, Australia Post has established 16 new or recommissioned parcel processing facilities, has chartered additional freighter flights, is operating some of its processing facilities 24/7 and has created more than 600 new casual roles.

Woolworths doubled its home delivery capacity. Google searches for Australia Post and online shopping peaked in March/April in-line with increased restrictions to flatten the COVID-19 curve.

Figure 4: Online shopping and Australia Post Google search

Figure 4: Online shopping and Australia Post Google search

Telematics insights

Since early 2017, BITRE and the Australian Bureau of Statistics (ABS) have been liaising with industry and government agencies to develop an ongoing freight telematics data collection. This real-time data collection has allowed for some useful insights into the impact of COVID-19 on heavy vehicles and road traffic.

In the first four months of 2020, increasing home-based work and schooling drove large reductions in urban traffic. Freight traffic did not reduce but, due to reduced congestion, it experienced lower and more predictable travel times, helping to maintain supply chains during the pandemic.

BITRE analysis of telematics data found clear patterns in selected routes in the five mainland state capitals. In early January, travel times were relatively constant over the day and the interquartile range was relatively narrow, so there was a fair amount of certainty about how long a trip would take.

By late February, as holidays had ceased and students returned to school, distinct morning and/or afternoon peak periods had emerged, so the median trip took longer and the expected travel time was more uncertain.

By late April, following the closure of many schools and workplaces in late March, these peak periods had become less pronounced or had disappeared altogether, and expected times and uncertainty were either comparable with or improved relative to January.

Figure 5: Examples of selected freight routes in Sydney, Melbourne and Perth (the blue line represents the median travel time and the shaded area represents the distribution of the middle 50 per cent of vehicle travel times)

Figure 5: Examples of selected freight routes in Sydney, Melbourne and Perth (the blue line represents the median travel time and the shaded area represents the distribution of the middle 50 per cent of vehicle travel times)

Ports and container movements by ships

Australia is reliant on imports for some of the medical equipment and products needed to treat COVID-19. International transport networks will affect the level of risk but global demand is another key factor. For example, when the number of cases of COVID-19 globally is high, demand for these goods is also high, thereby increasing the risk index. However, such risks continue to evolve, and some commodities have improved as other countries, such as the Philippines and Hungary, have made improvements in handling COVID-19.

Preliminary data from Lloyds List Intelligence showed that over the first half of 2020, the number of unique ships calling directly from China was down 12.3 per cent compared with the first half of 2019, but this had returned to normal levels in the second quarter.

In February, imports from China were 3 per cent lower than the five-year average. Low levels persisted in March, but recovered in April by rising more than 50 per cent to 40 per cent above the five-year average.

Commodity trade has also remained stable since the COVID-19 pandemic. While some reductions in commodity trades were observed early in the COVID-19 pandemic (in the order of 10 per cent), many commodities’ trading levels have returned to pre-COVID-19 levels.

An acute concern has been Australia’s reliance on imports for some medical equipment and products needed to treat COVID-19. International transport networks and increasing global demand have meant a higher risk to Australian supply.

Domestic Shipping

Domestic shipping volumes carried under the Commonwealth’s Coastal Trading Licencing System experienced a slight decrease in the first half of 2020. From February-June 2020, when COVID-19 impacts were most acute, domestic voyage numbers fell by 7 per cent compared with the February-June 2019 period — Department of Infrastructure, Coastal Trading License System Data.

During this same period, 54 coastal trading licences were issues compared with 61 from February-June 2019. Despite these modest decreases, cargo volumes have been relatively stable, indicating that domestic shipping has remained an effective way of moving goods during the COVID-19 pandemic.