Page 21 - STAT July 2024 for Magzter

Freightos Baltic Index - East Asia - N. America West Coast

$22,000

$11,890

Even a 0.02% shift
$6,390
from ocean to air
$890
may result in a 10%
04-OCT-19 11-SEPT-20 20-AUG-21 29-JUL-22 07-JUL-23 21-JUN-24
increase in air freight

Freightos Baltic Index - East Asia - N. America West Coast demand.
Jeffrey Shih
Dimerco Express Group
$7,200
security concerns on sea freight, busi-
nesses increasingly rely on air freight for
$5,000 timely delivery. This shift not only strains
air freight capacity and raises rates but
also negatively impacts sustainability due
$3,000 to higher emissions, stated Shih.
Despite being more affordable and
sustainable, ocean-based transport faces
$1,000 challenges during crises, resulting in a
30-JUN-23 08-SEP-23 17-NOV-23 02-FEB-24 12-APR-24 21-JUN-24 surge in demand for air freight. As a result,
increased transit times and port conges-
Source: Freightos Terminal
tion drive a noticeable shift from ocean to
and delays as vessels waited weeks to be freight. Levine emphasised that this issue air freight, leading to higher costs.
unloaded, and container yards overflowed. is particularly noticeable in ocean freight, K+N's Findlay added, "The shift from sea
These operational challenges further where delays and rising costs are becom- shipping, which is responsible for handling
increased costs. ing the norm. approximately 90% of international trade
Levine mentioned that initial disrup- Many shippers have turned to air cargo by volume, to air freight is not without
tions in the Red Sea led to high rates and as an alternative due to the congestion reaction from the airlines. Decreased air
delays. The situation eventually stabilised, and expense of ocean freight, especially cargo capacities and increased rates indi-
allowing importers and exporters to during the pandemic and the Red Sea cate significant volumes moving from sea
anticipate costs and timelines. With the crisis. As ocean freight became more to air shipping."
current early ocean peak season, conges- congested and expensive, more ship- According to Levine, the demand for air
tion and demand have once again raised pers opted for air transport to expedite freight has significantly increased, leading
prices, highlighting persistent challenges deliveries despite its higher cost. Levine to a price rise. In South Asia, particularly in
in maritime logistics. highlighted the importance of having India, disruptions and increasing rates in
flexible logistics solutions when maritime ocean freight have pushed shippers to pri-
Maritime disruptions disruptions occur. oritise air freight. As a result, air cargo rates
accelerating the sea-to-air Agreeing on the point, Shih added, "As from India to North America increased
switch disruptions and port congestion continue from $3 to $5.40 per kilo and to Europe
In a recent interview with The STAT Trade to affect transit times drastically, shippers from $1.80 to $4 per kilo by April 2024.
Times, Levine discussed the challenges increasingly turn to air freight to recover However, despite ongoing ocean
in the shipping industry. He noted that lost time. Analysts suggest that even a disruptions, air cargo rates have remained
while carriers' adjustments have helped 0.02% shift from ocean to air may result in stable, indicating no further shift to air
reduce congestion, rising demand has led a 10% increase in air freight demand." freight recently. In the Middle East, par-
to higher rates and longer delays in ocean Due to rising geopolitical tensions and ticularly in Dubai, shippers have chosen

www.stattimes.com | JULY 2024 19