Air freight Sea freight - which is best for your business?
In regard to costing, there is no competition. Air freight is 12-16 times more expensive than sea freight according to the World Bank and typically exceeds $4.00 per kilogram. The difference is that sea freight is usually charged per container (20ft or 40ft) whereas air freight charges are calculated on ‘chargeable’ weight basis. Due to the limited space on the aircraft, the size of the goods have to be taken into consideration as well as cargo weight.
Although the shipping industry accounts for 940 million tonnes of CO2, which is at least 2.5% of the world’s total CO2 emissions, it is still less than air freight. Many sectors, including the shipping industry are aiming to cut emissions by 50% before 2050. Big names in the industry such as Maersk have also taken action by ordering 12 ocean-going vessels that run on methanol. Maersk estimates that these new ships could save 1.5 million tonnes of CO2 per year (4.5% of its fleet’s emissions).
A study by the UK government discovered a plane creates 44 times more CO2 than a ship when carrying the same freight over the same distance. With international bodies, individuals and governments taking more responsibility for their environmental impact, this could be a crucial factor for businesses when deciding how to transport their cargo.
In fast paced commodity markets the speed of transport can be crucial to success. Although air freight is more costly, it will get your cargo to your desired destination significantly quicker than a container ship would. When importing products from China air freight can take less than 3 days to arrive in the UK but for a containership to transport the same cargo it can be up to 35 days depending on the specific routings.
Despite recent developments involving space technology and wind power to increase the transit speed and lower emissions, sea freight is still the slower mode of transport. The speed of air transport will always make this option more desirable for businesses with short delivery deadlines in fast moving consumer markets. Even with advancements to increase container shipping transit time, the difference between the two will still be too great!
If you are planning on moving hazardous goods, there is a long list of prohibited items that may require documentation in order to be transported. Here is a list of examples below:
• gases (e.g. lamp bulbs)
• all things flammable (e.g. perfume)
• toxic or corrosive items (e.g. batteries)
• magnetic substances (e.g. speakers)
• public health risks (e.g. untanned hides)
• oxidizers and biochemical products (e.g. chemical medicines)
• anything with a danger sign on the packaging.
One of the main considerations for any business deciding how to move their cargo is the difference in price between sea freight and air freight transport. It could be the difference between healthy profit margins and breaking even. As a global freight forwarder Tuscor Lloyds have worked with a multitude of companies to improve their supply chain costs using the most efficient modes of transport. However, the more eco-friendly option is sea freight with the ongoing targets to cut shipping emissions by 50% by 2040. Despite the fast transit time air freight provides, modern day businesses and individuals may value transport that has less impact on the environment. New technology and start up ideas such as battery powered cargo ships may lead the way for the future of shipping. The concerning impact of fossil fuels and their rapidly approaching expiry date has meant companies in the freight industry have had to look for alternative methods to fuel their vessels/aircrafts.