Rising ocean freight rates
and fuel surcharges are threatening sea-air cargo volumes on Asia-Europe
John Cheetham, Regional Commercial Manager
of Asia Pacific British Airways World Cargo, said sea-air was becoming
less attractive because shippers were not prepared to pay fuel surcharges
for both modes. “The savings are smaller now than in a low-fuel
environment,” he added.
Shippers and forwarders use sea-air options
on both Asia-Europe and Transpacific trade lanes with airports such
as Dubai, Kuala Lumpur, Incheon, and Miami used to deliver exports from
China into the major consuming markets on the air-leg. While some shippers
build their entire supply around sea-air deliveries, others move between
modes depending on relative costs and their ability to cope with changing
Spot rates on Asia-Europe have almost
tripled to USD $1,934 per TEU in early May from the record lows of USD
$490 per TEU in the first week of December 2011. According to shipping
analyst company Alphaliner’s latest survey, Bunker Adjustment
Factor surcharges levied by lines increased from an average of $606
per TEU in March 2011 to $827 per TEU this month.
Airline fuel surcharges have also seen
significant increases over the same period, with most carriers increasing
surcharges by at least 10 percent.
Claus Schmidt, Managing Director for the
Middle East at Swiss forwarding giant Panalpina, which uses the sea-air
model via Dubai extensively on Asia-Europe routes, said that the impact
of double fuel surcharges had previously been negated by low sea-freight
rates to Dubai, but rising sea rates had changed the equation with sea-air
now mostly used as an upgrade on ocean to shorten transit times.
“This is in comparison to the past
when high air freight costs forced shippers to look at sea-air as a
cost effective alternative,” he added.
However, Schmidt said that although the
double fuel surcharges were having an impact, General Rate Increases
by shipping lines remained the biggest threat to the sea-air mode of
transport, which he still insisted offered time and cost savings to
customers as well as access to new markets in the Middle East and Africa.
“Transit times for sea-air shipments
are almost halved when compared to moving the goods via sea only, whereas
from the costs side, savings can be between 25 and 50 percent depending
on origin when compared to pure air freight.
“Sea-air volumes greatly depend
on the level of direct air freight rates and capacity. That is, in times
of high air freight rates and limited capacity combined with slow-steaming
ocean carriers, the volumes of sea-air will generally increase.
“Due to the volatility in air freight
rates during the past years, sea-air volumes have varied greatly, and
we believe they will continue to do so.”