Higher prices at home are reshaping trade decisions at the border
Australia’s inflation story has moved back into the spotlight at the start of 2026 — and for importers and exporters, the impact is being felt well beyond household budgets.
According to the latest data, inflation has re-accelerated, driven by higher energy, housing, transport and service costs. For Australian trade-focused SMEs, this is translating directly into higher landed costs, tighter margins, and tougher pricing decisions.
Importers: Landed Costs Are Climbing Again
For Australian importers, inflation is showing up first in the supply chain. Higher domestic fuel, warehousing and transport costs are being layered on top of already-volatile ocean and air freight pricing.
Many import-reliant SMEs are now facing:
- Rising local transport and delivery charges
- Higher storage and handling costs at ports and warehouses
- Pressure on cash flow as suppliers tighten payment terms
While a stronger Australian dollar can soften offshore purchase costs, those gains are often offset by domestic inflation-driven expenses once goods arrive.
For importers operating on fixed retail pricing or long lead-time contracts, margin compression is becoming a real risk.
Exporters: Competitiveness Helps — Costs Still Bite
For exporters, inflation creates a mixed picture.
A weaker or volatile Australian dollar can improve export competitiveness, making Australian goods more attractive overseas. This is positive for exporters of agricultural products, food, and commodities.
However, inflation is also lifting:
- Inland freight and fuel costs
- Labour and processing expenses
- Packaging, compliance and logistics charges
For SME exporters, the challenge is passing these higher costs through to overseas buyers without losing price competitiveness — particularly in price-sensitive markets across Asia and the Middle East.
Interest Rates Matter at the Dock
With inflation running above the Reserve Bank of Australia’s target range, expectations of higher interest rates are growing. For importers and exporters, this matters because trade is capital-intensive.
Higher rates mean:
- More expensive trade finance and overdrafts
- Higher costs to carry inventory in transit or storage
- Reduced appetite for speculative or last-minute shipments
SMEs with long cash-conversion cycles feel this pressure first.
How Trade-Focused SMEs Are Responding
Australian importers and exporters are adjusting by:
- Reviewing pricing more frequently, not annually
- Reducing quote validity periods to manage cost swings
- Forecasting shipments earlier to control freight exposure
- Working closely with logistics partners to avoid surprise costs
Inflation is forcing trade businesses to become more disciplined, data-driven and proactive.
In an inflationary economy, logistics mistakes are expensive. Flying Fox Solutions helps Australian importers and exporters protect margins, manage risk and plan with confidence — turning freight from a cost pressure into a controlled part of the business.
Source: Australian Bureau of Statistics CPI release; Reserve Bank of Australia commentary (January 2026)
Disclaimer – Market data is from public sources we consider reliable but has not been independently verified; accuracy is not guaranteed