JUNE 1, 2018KATHERINE BARRIOS
Is it a question of price, of speed, of convenience, or of cargo safety? These are the questions shippers and forwarders consider when determining the choice between air and sea for freight transportation.Of course, the answer could be all of the above, and often is, so how does one decide which mode of transit is the optimal choice for a particular shipment? For clients who ship cargo overseas, the choice of whether to use sea freight or air freight will depend on a few factors, including:
- Type of cargo
- Time sensitivity
- Cost consideration
- Cargo safety
In the following table, we will elaborate on how each of the above aspects differs between ocean and air freight and why.
Air freight is most preferred for a direct city to city transport and on the most direct routes between countries.
With so many advances in air freight movement, it has become the preferred mode of transport especially with retail goods which needs to reach the destination quickly and air freight greatly reduces the distance between two points.
Sea freight is preferred for shipments that need to travel great distances spanning the vast oceans.
Naturally, the further the distance, the longer the transit.
Type of cargo
Due to capacity, weight and safety factors, air freight is somewhat limited in the type of cargoes it can carry.
Air freight is used mostly in the transport of unitized cargoes. There are, of course, exceptions where entire flights are chartered to carry cargo for a single project. For extreme projects, shippers can use the Antonov An-225 Mriya which is the largest airplane in the world. At 275 feet in length with a 290-foot wingspan and a maximum takeoff weight of 640 tons, it can carry up to 250 tons of cargo.
This is probably where sea freight has an absolute advantage over air freight as you are able to carry any type of goods in containers.
Apart from the traditional parcel or box freight, sea freight is also used to transport heavy equipment, cranes, project cargoes, etc.
OOCL Hong Kong is the largest container ship yet built and has a capacity of 21,413 TEUs
This mode is chosen mostly due to its quick transit time and their usually reliable scheduled arrival and departure times.
Even if it involves a few transshipments, an air freight shipment will arrive at the destination way ahead of a sea freight shipment, and with the large network offering and alliances, air freight helps shippers to export or import their cargos to anywhere in the world.
Air freight is currently the fastest and quickest mode of transportation between points.
Benefits may be lower inventory carrying costs and the opportunity to capture market share.
Not all cargo is time sensitive and needs to reach the customer tomorrow.
In terms of cost benefits, a transit time of a month from point to point is quite normal for a sea freight shipment.
Because of the volume that can be shipped at the same time, many customers are able to plan their shipments on sea freight and still ensure just-in-time deliveries. A lot of automotive and consumer goods businesses use sea freight with this planning.
An air freight shipment is considerably more expensive than the same volume of sea freight cargo. This is mainly due to the capacity available on a plane, the higher fuel consumption and operational costs of a plane.
Due to the volume of cargo a ship can carry at once, as compared to an aircraft, the freight cost by sea freight is much cheaper than air.
However, the same ship may not be able to call at smaller ports due to size, which means the container should move further to the final destination by road or rail or barge or any mix of these modes.
Air cargo involves minimal handling.
Minimal handling means there is a minimal risk of cargo getting damaged and a higher chance of reaching its destination safely.
On top of that, airport regulations are controlled quite strictly and these regulations include the storage, handling and securing of your cargo.
While freight containers are a safe way of transporting goods, if the cargo inside the container is not packed properly, there is a big possibility ofcargo damage, which may even result in or be the cause of catastrophic damages including ships catching on fire, sinking or piracy.
As air freight volumes are considerably smaller than sea freight and handled quicker, there may not be congestion at the airports as compared to the long queues at the sea ports.
Due to the sheer volume of containers shipped in and out, there could be periods of severe congestion in sea ports, which brings with it its own problems of additional costs likedemurrage and detention.
In terms of accessibility to markets, sea freight has a better advantage than air freight as there is the possibility of containers moving further inland by rail on an intermodal basis.
A customer may have various requirements influencing their decision regarding the mode of transport to be used, but essentially, it comes down to the nature of the freight, the time frame and how much the shipper is willing and able to spend.Why Use Air Freight
Perishable goods, like flowers and fresh-produces, are often pigeon-holed into being carried by air freight because of their short lifetime. Naturally, there are many exceptions like bananas, which tend to travel on ship due their long ripening process.
North America and Europe are both huge consumers of flowers, for instance-- especially around holidays like Mother’s Day and Valentine’s Day. These flowers are sourced largely from South America and East Africa, so air freight is an obvious choice in such an instance.
Demand for cargo capacity on freight carriers tends to vary seasonally. A recent example is the unprecedented spike in demand for flowers that occurred before Valentine’s Day, which caused a scramble for freight capacity on planes flying from Kenya to Europe, where most of the flowers were sourced. Some carriers reported that the traffic moved in anticipation of the holiday soared to nearly double average rates.
Some pharmaceutical products also tend to be carried by air freight because of their temperature-sensitivity, which, if not monitored properly, can result in the product being spoiled and pallets of potential profit wasted. That means they need to be shipped within a limited time frame, with maximum visibility. However, depending on the exact nature of the pharmaceutical companies cargo, reefer containers on ships are also frequently used.Pros and Cons of Ocean Freight
E-commerce goods like electronics, cosmetics, apparel and home goods are all good candidates for ocean freight.
This mode of long-distance transportation is a great option because it is much less expensive than moving product by air. If time is not an important deciding factor in choosing a preferred mode of freight, ocean freight is the obvious choice.
One downside of ocean freight is that it can be difficult to predict and control the timeline due to circumstances like congestion at ports, which can end up causing delays.
A prudent customer would always seek a good balance between the service quality offered, cost component, the reliability of the service provider and time frame.
It's important to always keep an eye on both the air and ocean markets as both are extremely volatile. Readily available rate data for benchmarking and market intelligence for both markets will make tendering and negotiations for BCO procurement professionals more efficient.
In many cases, depending on how market rates are moving and other market dynamics, one mode of transport can be chosen over the other. Real time and on- demand rate data is what allows professionals to react instantaneously and make the right decision that positively impacts the bottom line.
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