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Shipping lines steal airfreight growth
[ March 19, 2014 // Chris ]The shift to ocean freight is costing the air cargo sector almost 2% a year’s worth of annual growth, according to research by Seabury Group and the International Air Transport Association (IATA).
The study by the advisory services firm showed that air freight’s share of total global containerised or unitised cargo transported declined from 3.1% in 2000 to 1.7% in 2013, about a third of it due to ‘modal shift’ – in other words, goods that used to be shipped by air are now shipped instead by sea or surface transport. ‘Commodity mix’ factors and ‘value effects’ were the other main causes.
Shipment of raw materials and perishables had been affected the most by modal shift, but there had also been significant shifts in fashion, high-tech and machinery parts goods from air to ocean. Trade lanes from Asia saw the biggest effect.
Shippers interviewed indicated that the main factors were transport costs, increased reliability of ocean freight, and the environment. According to shippers, air cargo could fight back by offering cheaper rates, better services and closer relationships with shippers, while the most popular suggestions from freight forwarders interviewed were increased sustainability through fuel efficiency, greater operational reliability and increasing the use of electronic communications.
Head of Seabury Cargo Advisory, Gert-Jan Jansen, commented: “Mode shift has eroded a significant portion of air freight growth and is expected to continue to do so, albeit at a moderate rate. Without this modal shift, the compound annual growth rate for air freight could have reached 4.5% from 2000 to 2013, instead of the 2.6% actually achieved.”
Jansen said the air freight sector needs to respond if it wishes to minimise or reverse its market share losses. “While shippers would like to focus attention on air freight rates, there are other aspects at play,” said Jansen. “Forwarders require improvements in terms of fuel efficiency, reliability and use of e-communication, while respondents also highlighted the importance of reduced door-to-door transit times.”