By Cate Hull
On the surface, it appears to be an easy decision.
Ship your cargo via air freight if it must be there sooner than later; go be sea if schedules will permit a longer delivery window.
Shippers, however, need to take a closer look at the detail, cost, restrictions and other aspects of the shipping process when choosing between ocean and air freight.
When shipping internationally, airlines use a chargeable weight, which combines the weight and size of the cargo.
Ocean carriers charge per container size with 20 and 40-feet being the most common sizes. Your cost will also vary depending on whether you are shipping with a Full Container Load (FCL) or Less than Container Load (LCL).
With FCL, you have the entire container. With LCL, you share the container with other shippers and pay a percentage of the cost based on volume used. LCL rates are often determined by cubic meter.
Generally, larger and heavier loads are more suited for ocean shipping.
In addition to basic shipping rates, shippers also face destination charges and fees. While ocean freight shipping charges are usually less than air, warehousing fees at seaports tend to run higher than at airports.
As a rule, air freight is the better option when the cost of shipping is less than 15-20 percent of the value of the cargo.
For light shipments, first determine if your shipment will be charged based on actual weight or dimensional weight.
Air freight is faster, but you pay for that speed in delivery. A $195 ocean shipment could cost you $1,000 by air.
Airlines also have more strict rules when it comes to shipping hazardous materials. Make sure you confirm with your freight forwarder what restrictions exist that may apply to your cargo.
With air freight, the list of prohibited items includes, but is not limited to, the following:
- Gases (light bulbs)
- Flammable materials (perfumes)
- Toxic or corrosive items (batteries)
- Magnetic substances (speakers)
- Public health risks
- Oxidizers and biochemical products
With ocean freight, you get capacity and value. With ocean freight, you must deal with customs, port delays and other obstacles associated with ocean shipping. From an environmental perspective, ocean freight has a smaller carbon footprint than air freight.
Many shippers are adopting “green” policies to reduce carbon emissions. CO2 emissions from ocean freight are much smaller than air freight.
To combat the speed advantage held by air freight services, many ocean shippers are now providing “express” or “expedited” LCL services with guaranteed delivery dates that are challenging air on competitive delivery times.
The express ocean shippers are closing the gap with faster ships, canal upgrades resulting in shorter routes, and more sophisticated cargo tracking to optimize weather conditions along the route.
Another factor in the ocean versus air debate is reliability. Though air freight is newer than ocean shipping, consensus in the industry is that air freight is more reliable.
Airlines suffer flight delays due to weather but tend to have high percentages of on-time delivery. Airlines can often make up lost time in the air with increased air speeds.
Ocean carriers, however, are working with larger scheduling windows and less frequent cargo shipment opportunities. As a result, ocean shippers often face delays of several days. Ocean lines have weekly schedules, airlines have daily, multiple schedules.
Currently, air freight shippers are trying to lure customers away from their ocean shipping competitors.
With ocean shippers facing increased environmental restrictions, air shippers believe they have an opening.
Andrew Coldrey, vice president of Oceania at C.H. Robinson and an air freight expert, told FreightWaves that current factors are creating opportunities for air freight shippers.
“Some people say they only or mainly do ocean. But the reality is you need to be agile and look at different opportunities. The air market is soft now,” he said. “So, the thinking is that supply chain is becoming more sophisticated and many factors can be taken into account when determining the best method of transport,” he added.
Cate Hull is the CEO of FreightExchange, a freight and logistics company based in Sydney.