Boom in air freight the flipside to ailing retail sector
Australians have been buying more and cheaper goods from overseas since the dollar hit parity with the greenback over two years ago. But the air freight industry is still adjusting to the shift in demand.
DHL has just doubled the frequency of its wide-bodied freighter connections between Australia and the US from two to four days a week.
It has also introduced to its fleet two new Boeing 767-300ERF wide-bodied freighters. "The first one arrived last night," senior vice-president of DHL Express Oceania, Gary Edstein, said on Thursday.
Economists say two of the biggest winners from the high exchange rate have been wholesalers and global air freight companies.
Chris Richardson, from Deloitte Access Economics, says two things have happened in the past two years: the high exchange rate has made it a buyer's market for Australian consumers, and the channels by which they shop have become more direct.
"We often hear about the losers from the high exchange rate, such as the big retailers, but there are winners too, like the air freight companies," Mr Richardson said. "And the wholesale sector is now bigger than the retail sector. Consumers are cutting out the 'bricks and mortar' retailers a lot of the time."
The growth in the volume of consumer goods flying into Australia has forced DHL to replace the two 747s it was using on its US-to-Australia route with two new 767s.
"It's a massive change for our operation because it adds an extra 50-tonne capacity to our global network," Mr Edstein said.
Things have changed for the air freight business since the financial crisis.
DHL's competitors, UPS and Fed-Ex Express, have both been expanding as shoppers migrate online. Fed-Ex Express has 660 aircraft in its global fleet, making it the largest express transportation company. UPS now has a global fleet of more than 500 aircraft.
A few years ago, DHL was using the belly of commercial aircraft to ship cargo into Australia. Then 12 months ago it started using its own 747s.
But the continued growth in volumes in recent years, driven by the surge in online shopping, has seen it add the new 767s to its fleet.
Its new Boeing 767s increase its global fleet to 250 aircraft.