Escalating airfreight transportation rates and capacity shortages from China due to the global pandemic have encouraged some shippers to split supply chain shipments between ocean and air pallets.
Escalating airfreight transportation rates and capacity shortages out of China in recent months due to the coronavirus pandemic have led many shippers to try hybrid services that combine sea and air modes.
So-called “sea-air” services offered by some global freight forwarders and non-vessel-operating common carriers (NVOCCs) have been around for decades, but they tend to come and go depending on airfreight market conditions.
The pandemic has spawned increased interest in moving freight from Asia by fast boat to Los Angeles where it is put on a plane to Europe. The new option has become more popular than the traditional routing through the Middle East, which involved an ocean leg to the United Arab Emirates’ Jebel Ali seaport, stripping the container and delivering the cargo to an airliner at the Dubai airport for transport to the destination city, according to logistics professionals.
“Sea-air is a reaction to lack of capacity and high rates,” said Morten Bach, global chief commercial officer for Shipco, a non-vessel carrier in Hoboken, New Jersey. “When air rates go up, sea-air becomes a viable alternative for cargo that cannot pay high airfreight rates, nor accept all-ocean transit times.”
Experts caution that not all freight is suited for the sea-air mix because of tight delivery windows and more touch points that increase the risk of delays, such as extra customs inspections.
The COVID-19 pandemic has turned Los Angeles into a center for sea-air logistics services.
Ocean consolidator ECU Worldwide earlier this year established a sea-air service from China to Europe via Los Angeles, called XLERATE. Less-than-containerload (LCL) shipments booked by forwarders are moved via ocean carrier from six Chinese ports to Los Angeles, for devanning and placement onto airplanes bound for Europe.
Central and South America
Both ECU Worldwide and Shipco said they also have expanded their sea-air services via Los Angeles to include destinations across Central and South America. They perform this by trucking the cargo to Miami International Airport for outbound flights to those regions.
Shipco operates team trucks seven days a week to Miami.
“It is an advantage for us that we are a truck broker in the U.S. and can control the trucking leg into Miami ourselves via our in-house domestic department to ensure we can deliver on the competitive transit times,” Bach said.
Since sea-air services thrive on supply chain emergencies, C.H. Robinson’s Castle said the number of shipper requests will likely decrease once the COVID-19 virus subsides.
But Shipco’s Ekstroem believes sea-air services will stick around once the COVID-19 pandemic subsides.
“I think the need for cargo capacity will increase faster than our appetite for traveling, and without us traveling, there will be limited belly capacity and airfreight rates will stay high,” he said.
