Shippers choosing ocean transport for cargo previously carried by aircraft has cost the air cargo sector almost 2 percentage points of annual growth since 2000, according to research by Seabury Group and the International Air Transport Association.
There has been much anecdotal evidence of the modal shift for years, but until now, no one has been able to quantify the amount of cargo diversion.
Seabury, a global advisory and financial services firm with specialty industry practices such as freight transport, found that air freight's share of total global unitized cargo declined from 3.1 percent in 2000 to 1.7 percent in 2013, with ocean freight capturing about one-third of the products that previously moved by air.
Seabury's research for IATA indicated that the shipment of raw materials and perishables were most affected by the modal shift, but fashion, high-tech and machinery parts shipments have also migrated from air to ocean freight. Trade lanes from Asia have been hit the hardest.
Shippers interviewed in the survey indicated that the main factors driving modal shift included transportation costs, increased reliability of ocean freight and environmental benefits in terms of carbon output per unit.
The conversion is also made possible, experts have said, by better technologies for preserving goods in transit and a reevaluation of shippers about what products are needed on an urgent basis. (See "Reefer transshipment
," to learn more about how ocean carriers are adding reefer capabilities for perishables.)
Shippers surveyed said air cargo could minimize or reverse the effects of modal shift by offering cheaper rates, better air freight products and close relationships with shippers. Freight forwarders recommended that carriers continue to improve fuel efficiency and operational reliability, and rely more on electronic communication. Respondents also said it was important to reduce door-to-door transit times.
last year spotlighted shippers' disenchantment with air cargo in a profile of Ericsson's supply chain ("Airfreight retrenchment: Ericsson takes hands-on control of supply chain, limits air transport through better planning
Seabury said a modest shift to ocean freight will continue in the next few years, with shipments from the automotive and electronics sectors possibly making the change.
“Mode shift has eroded a significant portion of air freight growth and is expected to continue to do so, albeit at a moderate rate. Annual global air freight volumes would be 15.2 million tons higher if air freight had retained its 3.1 percent market share, and over the past 13 years, 5.4 million tons have shifted from air to ocean -- an average annual loss of more than 400,000 tons per year," Gert-Jan Jansen, head of Seabury Cargo Advisory, said in a statement. "Without this modal shift, the compound annual growth rate for air freight could have reached 4.5 percent from 2000 to 2013, instead of the 2.6 percent actually achieved.”