That air freight has shrunk has been apparent for some time. Speaking at JOC's 2014 Trans-Pacific Maritime conference earlier this year, Fred Smith, indicated that although some ships take nearly as long to cross the ocean “as the Cutty Sark did more than a century ago”, boxships’ massive increases in size, as well as “improved ship and goods monitoring technology”, made a much more economical case for shipping by sea than a decade ago.
Using a graph which combined the Boeing Air Cargo Forecast with the findings of Global Insight, ACM Shipping and FedEx, Smith demonstrated how International Air Freight cargoes,excluding Air Express” cargoes, such as parcels, had shrunk from 38% in 1994 to 25% in 2012, while ocean-going cargo had increased from 55% to 63%.
One example of the technology improving prospects for sea freight is the application of “Controlled Atmosphere” technology for reefer containers, making it possible to ship perishables massive distances. For example, Maersk’s StarCare reefer, by reducing the Oxygen level while maintaining a specific CO2 value, “is able to keep perishable fruits, such as avocados and bananas, fresh for long periods of time,” explains Ole Schack Petersen, head of commercial and markets in Maersk Line’s Reefer Management.
“For example, we can basically put bananas to sleep and thereby keep them fresh for up to 50 days” – enabling carriers to ship them from Ecuador, the world’s largest exporter, to the most easterly ports of the Black Sea, something never before possible by ship.
“Cut flowers is an interesting ‘new’ reefer commodity to us, and a good example of where ocean freight can replace airfreight, like we have done over the latest decade for berry exports from South America,” says Petersen.
“Some of the important global trade lanes for reefer cargoes such as fresh fruit are South America to Europe, North America and Asia, and Southern Africa to Europe, Middle East and Asia. We are pleased to see growth in reefer cargoes also in several new regions – for example we see increasing volumes from Turkey to Europe and Middle East.”
Of course, other factors are threatening air freight cargoes too – the sector is under constant assault from passenger aircraft, which allocate excess hold space for the carriage of some cargoes. Further, Smith cites “low growth the US and Europe, increased manufacturing costs,” and “electronics miniaturisation” as difficulties. And although shipowners may bemoan high bunker fuel prices eating into their margins, jet fuel, the cream of the cracking tower, is not getting any cheaper either.
On top of this, air freight is suffering the same regulatory hurdles as shipping, with the International Civil Aviation Organisation (aviation’s IMO) requiring newly-constructed aircraft engines to comply with NOx emissions standards which become more stringent every few years (sound familiar?).
And then of course, there is the question of efficiency. According to estimations United States’ Environment Protection Agency (EPA), air transport generates 1.527kg of carbon dioxide per ton-mile, almost 32 times shipping’s total of 0.048kg. Meanwhile, air freight gave off a total of 0.0479 of NOx per ton-mile, 34 times the 0.0014g generated by ships.
“The CO2 savings when switching from air to sea is very significant,” says Jacob Sterling, head of sustainability at Maersk Line. “When we calculate the difference, we usually get a CO2 savings in the range of 90-95% in favour of ocean shipping.”
The European Commission has recently been criticised for introducing new measures which would penalise liners and force more cargo onto roads. But if shipping is taking cargo out of the air as well, its critics will be forced to take this into consideration, too. Apparently, slow and steady really does win the race.
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