Ocean to air conversions surge as box congestion issues worsen
Air freight exports from China and other parts of Asia are picking up again as worsening congestion and capacity issues add to backlogs of ocean freight cargo and increase the volumes of ocean-to-air freight conversions – increasingly including some non-premium consumer goods being shipped by air.
European air freight forwarder Senator International is among several recently highlighting the surge in ocean to air conversions, noting that “the situation in China’s ports – especially Yantian-Shenzhen region – is having a massive impact on supply chains worldwide. Cargo is already switching to air freight in some cases. Demand for air freight to South Africa is also expected to increase again due to delays in sea freight.”
And its latest air freight market update yesterday, US freight forwarder Flexport noted that air exports from north and south China were “picking up and showing stronger demand towards (the) month- and quarter end”, highlighting that the “backlog in ocean markets adds incremental demand due to ocean-to-air conversions”.
Non-premium consumer goods moving by air
Seko Logistics last week said the well-documented “conversion” of some ocean freight shipments to air due to the on-going logistics difficulties in the maritime sector now extended to a range of non-premium consumer goods that would normally be transported by container ship, the modal shift being principally driven by cross-border e-commerce and to a lesser extent, traditional bricks and mortar retail.
The freight and logistics group’s chief growth officer Brian Bourke noted: “This pivot to air freight is a big pivot. The old saying is that ‘air freight is nothing but ocean gone wrong’. That’s not the case. A lot of our clients build their supply chains around air freight because of either the demand for their goods and the value of the goods themselves. But with that said, we are seeing clients leverage air freight as an option, when they can, for commodities at the bottom end of the price spectrum, especially for large items.”
He continued: “We’ve shipped hot tubs, we’ve shipped bikes, and I believe we've shipped leaf blowers too and even grills – commodities that typically would not be transported by aircraft. Now, I don’t mean we’re going to see this (ocean to air conversion) for things like sofas or luggage; but there are a lot of other commodities that we are pivoting to air freight and it’s really driven by two things – firstly e-commerce. A lot of our clients have really made it their position not to run out of inventory, and if that means for a couple of weeks they have to spend a lot more (on shipping costs), so be it.”