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Home » Shippers continue to shift from air to ocean freight on European trade lanes, monthly study finds
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Shippers continue to shift from air to ocean freight on European trade lanes, monthly study finds

November 19, 2012
DC Velocity Staff
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More than 80 percent of shippers and freight forwarders operating on trade lanes linking Europe with Asia and the United States expect a continued migration away from air freight and toward ocean, according to a monthly survey conducted by investment firm Stifel, Nicolaus & Co. and U.K. research firm Transport Intelligence Ltd. This shift is driven by cost-conscious shippers "trading down" to lower-cost ocean services from traditional airport-to-airport airfreight, the survey said.

In a November poll of 300 international users of freight services, 81 percent said a trend is emerging where goods previously moved by air are shifting to ocean freight. About 6 percent disagreed with that scenario, and 13 percent had no opinion. The survey canvassed users operating in trade lanes linking Europe and Asia and Europe and the United States.

The prevailing sentiment can be seen in the erratic flow of airfreight volumes. European air imports from Asia fell 6.3 percent from October levels, and imports from the United States declined 5.5 percent over that same period. Asked to predict air import volumes into Europe for six months from now, respondents expected declines, though not as severe as November's figures.

The survey data is compiled to form a monthly "confidence" index. The airfreight "confidence" index rose in October, largely due to shipments of the new Apple iPhone 5, which debuted in late September. However, the bump from the iPhone's release seems to have worn off, as volumes and confidence retreated in November, according to the survey.

The long-term outlook appears dim for the airport-to-airport airfreight services that are mostly handled by forwarders. Airport-to-airport services are being squeezed on price by ocean carriage and on service by faster, door-to-door services managed by integrated carriers like FedEx Corp. and UPS Inc. The latter service is aimed at high-value shipments that must be delivered swiftly to avoid high inventory carrying costs.

By contrast to the weakness in air, ocean volumes—and corresponding confidence in current and future shipping trends—were relatively strong in November. The increase in confidence over sea freight services offset the decline on the airfreight side, leading to the overall logistics confidence index rising—albeit marginally—for the first time since March, the report said.

Transportation Air Maritime & Ocean Business Management & Finance
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