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March 2020

A TGL Initiative to show our support

A TGL Initiative to show our support 1200 630 tgl_editor

In view of the looming economic crisis caused by the COVID19 pandemic, we at Think Global Logistics (TGL) understands the importance of spending money as it is the bedrock of all economies.

So aside from the practical hygiene precautions, we would like to stress the importance of SPENDING as this is the handwashing equivalent measure if we are to keep our economy healthy especially during these uncertain times. 

To spend is to create revenue and in turn create the lifeblood to all businesses especially small to medium-sized businesses, CASHFLOW. Governments around the world are taking action with their stimulus announcement to guard against the failure of SMEs so we at TGL have decided to do our bit for our Customers. 

For the month of April, all existing and new customers will receive free customs clearance to the value of AUD 100 per shipment. We know this amount will not solve the crisis but we hope that through this gesture we will encourage our community to adopt similar measures.

Because the old adage remains true, united we stand, divided we fall!

Financial stimulus packages for Australian’s businesses

Financial stimulus packages for Australian’s businesses 1200 630 tgl_editor
Since the upsurge of the Coronavirus, the commercial world has been the target of the unexpected event. More precisely, Australia, which has its main trading partners within Asia but especially with China.

So with Australia facing the pending economic crisis the Government has announced its COVID19 financial stimulus package in an attempt to halt and slow the dramatic slip in commerce due to the quarantine realities needed to stave off the virus spread and in turn avoid Australia slipping into recession.

The Morrison government announced its $17.6 billion stimulus package in hopes to stimulate the economy and assist small and medium-sized enterprises to keeps its workforce. 

Firstly, to help small businesses (less than 50 million turnover) with a tax reduction and provide them with up to $25,000 to help them pay their salary costs but also the ability to immediate asset write-off up to $150k. This is aimed at protecting Australians from unemployment. Then, large companies (less than 500 million turnover) will also be supported in the future. 

With 11 billions of this package to be spent before July 2020 and the remainder to be injected in to the economy by July 2021, it is an aggressive move which not many business owners will complain about even if it means that Australia will not be on track to achieve a budget surplus which until now has been the Government trump calling card. 

All in all, it is a very much welcomed move as Australia faces down what has now become a global pandemic.

dramatic-year

A dramatic year for Air Freight

A dramatic year for Air Freight 1170 658 La Chang

Air freight experienced its biggest drop, in volume, demand and shipments all in 2019. Indeed, the International Air Transport Association (IATA) said this hasn’t happened since 2009.

As Alexandre de Juniac, Iata’s director general and chief executive officer said, “Trade tensions are at the root of the worst year for air cargo since the end of the global financial crisis in 2009.” This drop is due to an accumulation of political, economic and social problems.

Since the crisis in 2009, all trade was affected specifically the industry of transport and logistics. However, this crisis won’t last. Indeed, this fall in demand for air freight is due to political and economic problems in the various regions of the world.

The IATA’s annual report shows the very poor results obtained this year on the world market. This is a considerable drop in the transport industry as a whole, with freight volume falling by 3.3%.

It can be seen that depending on the region, the results may differ. For example, in Africa, no international FTKs (freight tonne kilometres) have been contracted. But this region will experience better growth thanks to Asia’s investment: airfreight volumes were sustained.

In contrast, Asia has been the most affected by the decline in demand. Indeed, we know that this region is popular for the world’s manufacturing. Asia has seen its volume fall by 6.4%. With the arrival of the Coronavirus, this should not reverse the trend. It complicates the transport of trade between external and internal countries. However, it will not impact the market in the long-term.

“While these are easing, there is little relief in that good news, as we are in unknown territory with respect to the eventual impact of the coronavirus on the global economy. With all the restrictions being put in place, it will certainly drag on economic growth, and for sure, 2020 will be another challenging year for the air cargo business.” Alexandre de Juniac, Iata’s director general and chief executive officer

The European market were impacted by changes to the European agreements. Brexit, approved by the British, disfavoured the flow of trade. Indeed, this break accompanied by less efficient activity in Germany caused that fall.

In America, the fall was caused by social problems and economic difficulties in many American countries (from the second half of the year), leading to a 5.3% reduction in FTKs.

Finally, the Middle East region got caught between the problems in Asia and the changes in Europe. As a result, it lost 4.8% growth in 2019. Therefore, the region has lost all the growth it had generated in 2018 (4.6%).

Despite this year’s air freight crisis, IATA remains confident for the year 2020. Because this drop in demand is due to many factors in each region, but which are not permanent over time. The situation is not expected to get any worse despite recent events such as the coronavirus.

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