The Brief #11: A debate on air freight versus sea freight: Which should you choose?

Transportation Insights

For clients who ship cargo overseas, the choice of whether to use sea freight or air freight will depend on a few factors, including:

- Distance

- Type of cargo

- Time sensitivity

- Cost consideration

- Cargo safety

- Accessibility

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.