28 January 2021 ·

What do the trade restrictions between China and Australia mean for the trucking industry in 2021?

Timber

As a response to COVID-19, Australia supported a growing call for an international enquiry into the way China have handled the pandemic. This sparked a backlash from China, who responded by introducing tariffs on Australian wine and barley exports, and restrictions on coal, lobster, timber, red meat and cotton. 

China is Australia’s biggest trading partner, taking 30% of Australian exports between 2018 – 2019. Iron ore has not been tariffed which is our biggest export to China. The top 10 exports from Australia globally are mineral fuels, ores, gems and precious metals, meat, inorganic chemicals, cereals, machinery, aluminium, electrical machinery and medical equipment. We are one of the only nations in the world to export more to China than we import from them. 

In this piece we take a closer look into the problems and opportunities that might arise from China’s trade restrictions, more so with the timber industry.

Timber restrictions

China has banned timber imports from QLD, VIC, SA and TAS. The tariff has been introduced on the basis that pests have been found in shipments of logs. Timber restrictions will have the biggest impact on the trucking industry.

What does this mean for the timber industry? 

Hundreds of direct and indirect jobs within the timber and haulage industries could be impacted as a result of these reduced exports. However, some experts believe the change in the industry structure could result in opportunity for investment into manufacturing processes within Australia, instead of exporting raw materials to China for processing. Whilst it is still unknown when trade will resume to normal, this could provide a new opportunity to develop and expand Australian production chains. 

What does this mean for the trucking industry?   

To keep up with the demand for products, state governments are looking into opening up new domestic manufacturing opportunities. If this is a success, the trucking and haulage industries could benefit immensely as it would increase steps of the production chain within Australia. Raw materials will need to be transported to factories for manufacturing, then manufactured goods will require Australia-wide delivery by road. Previously the raw materials would have just been driven to ports and shipped offshore. 

In another attempt to increase the use of timber in Australia, investigations are being made into how more wood could be used in infrastructure and public buildings. Implementing this would help secure long-term domestic solutions which would open opportunities for construction and haulage industries. 

However, currently there has been a big impact on the harvest and haul sectors as lots of companies have had to initially slow down their production as a response to the announcements.  

Whilst jobs might be at risk primarily, it seems that the trade restrictions could create new opportunities for the transport, haulage and construction industries in the long run. 

Truckies Australia-wide could benefit from a domestic focus timber manufacturing as greater demand for transportation will arise from delivering raw materials and finished products around the country.