SIGNIFICANT, unbudgeted costs arising from shipping disruptions linked to the Middle East conflict have prompted calls from exporters for “targeted financial assistance”.
In a letter to Prime Minister Anthony Albanese, Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) wrote that the conflict underscored “a clear market imbalance”, where external shocks such as pandemics and wars transferred "disproportionate costs and risks" onto the Australian trade sector.
FTA director and APSA secretariat Paul Zalai said exporters had little practical ability to mitigate or avoid these impacts.
“Key global maritime channels appear likely to remain impacted for a significant period,” Mr Zalai said.
“Government support should therefore reflect the scale and duration of this impact and the broader implications for Australia’s trade, productivity and economic resilience.
“Given the cross-portfolio impacts spanning trade, agriculture, infrastructure and treasury, a coordinated whole-of-government response is recommended.”
Mr Zalai said Australian exporters were being subjected to emergency conflict, war risk and deviation surcharges ranging from about USD 800 to USD 4,000 per container, “imposed unilaterally by shipping lines with little or no notice”.
He said Australian shippers had “no meaningful ability to verify whether these charges reflect genuine cost recovery or profit expansion, particularly when cargo remains in the custody of foreign-owned container shipping lines”.
Mr Zalai said surcharges created an immediate cashflow shock, “often resulting in budget overspend in the current accounting period”.
He said smaller exporters, particularly in agriculture and regional Australia, faced escalating cashflow crises also noting airlines had been introducing surcharges of between 20% and 30%.
FTA and APSA have proposed "extraordinary event relief", similar to assistance provided to businesses during the COVID-19 pandemic.
“We respectfully request that the Australian government introduce targeted financial assistance or compensation for Australian exporters to offset emergency conflict, war risk and deviation surcharges,” Mr Zalai said.
“These could include a temporary surcharge relief scheme, for example grants or rebates per impacted container, with baseline consideration of USD 2,000 per 20ft container and USD 5,000 per 40ft or special equipment container, and access to short-term concessional finance or working capital support.”
Mr Zalai said the situation highlighted the need for long-term regulatory reform to introduce fairness, transparency and balance in carrier-shipper relationships.