Page 22 - STAT July 2024 for Magzter

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However, studies show that the gap be-
tween air and ocean freight is narrowing
significantly. Does that impact the switch
from sea to air?
The CEO of Dimerco Express Group stat-
ed that the decreasing price gap between
ocean and air freight rates is leading to a
shift in preference. Dimerco's recent report
revealed that global ocean rates are now
only six times lower than air freight rates,
significantly decreasing from the historical
12 to 15 times difference. This change is
attributed to factors such as the pressure
on ocean shipping, increased volumes,
capacity shortages, and port congestion
exacerbated by the Red Sea crisis.
Shih added that unacceptable transit
time increases and growing equipment
shortages primarily drive the shift from
a sea-air combination for faster and more Is maritime disruption the only ocean to air freight. Carriers have also
cost-effective transport. factor fuelling the sea-to-air implemented General Rate Increase
He added that shipping rates in- switch? (GRI) schemes and tripled Peak Season
creased and remained high during peak The primary reason for switching from ocean Surcharges, prompting some to offer pre-
seasons, indicating a sustained shift from to air cargo is disruptions in maritime choke- mium options for priority loading without
sea to air freight. However, in China, the points, such as the recent Red Sea crisis. This roll-over risks. Freight rates for Europe
shift from ocean to air freight is less no- shift is especially evident in B2C e-com- Westbound and Trans-Pacific Eastbound
ticeable, possibly due to the high volume merce, where goods previously shipped have experienced substantial increases
of e-commerce. As a result, air freight by ocean are now being sent directly to since March, with further hikes anticipated.
rates from China to North America and consumers by air. Although air cargo is more Shih added that another critical factor
Europe are still high, at $4.43 and $4.33 expensive, it is used when speed is essential. is potential disruptions in the supply chain
per kilo, respectively, driven by e-com- In the absence of disruptions, ocean ship- due to the ongoing contract negotiation
merce demand rather than a shift from ping remains the preferred choice due to its dispute between ILA-USMX [International
sea to air freight. cost-effectiveness and reliability. Longshoremen’s Association (ILA) United
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