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Cargo airlines losing out to ocean container carriers

Cargo airlines losing out to ocean container carriers

Airlines have permanently lost out to ocean container lines as box carriers grab an increasing share of the freight that was previously moved by air, according to logistics and cargo executives, reports the South China Morning Post.

Alfred Hofmann, senior vice-president for sea freight in the Asia-Pacific at logistics giant Kuehne+Nagel, said the pharmaceutical industry and manufacturers of temperature-controlled products were at the “forefront of change” from airfreight to sea freight.

“It’s a trend that can’t stop,” he said. Hofmann said that sea transport was considerably cheaper. However, he said there needed to be better planning between manufacturers, logistics operators and shipping lines to achieve more reliable transit times and a reduction in overall lead time in shipping product.

Charles Wellins, a senior vice-president of supply chain solutions at Ceva Logistics, agreed that there was a growing shift to ocean freight by cargo owners who had a historic reliance on airfreight.

Nick Rhodes, director of Cathay Pacific Cargo, said he thought Hofmann and Wellins were correct. “I suspect they are right and that much of the shift to sea is permanent. Only time will tell. Our loads are definitely down but it is hard to say how much is due to less production, more competition or modal shift. A bit of each, I suspect.”