Oceanic delays are flying desperate retailers, increasing emissions

Congestion at ports in the United States as well as in Asia causes significant shipping delays and leaves retailers “desperate to get their goods to the shelves of physical and virtual stores for the holiday season,” according to Eric Kulisch , FreightWaves Air Freight Editor.

Shippers move goods from oceans to air transport to avoid delays. But this costly ocean-air transfer has ripple effects, including environmental ones. Transporting freight by ocean-going vessel is much more efficient in terms of greenhouse gas emissions than transport by air.

“Port congestion and overloaded ocean networks everywhere, including the ports of Los Angeles and Long Beach, are pushing more and more shippers to shift high-value exports to air travel, especially in the near future. of the holiday shopping season, ”Kulisch said.

He noted that congestion doesn’t just happen on the west coast of the United States. Factory and port closures and limited operating levels in Asia are contributing to shipping delays in the Pacific, increasing interest in faster shipping methods, Kulisch said.

Read: Container ships are now piling up at anchorages off Chinese ports

“The current disruptions facing shippers are unfortunate, especially when backlogs and delays move freight to higher emission modes. Shifting from ocean freight to air freight can increase absolute emissions more than 20 times per tonne-mile, ”said Tyler Cole, director of carbon intelligence at FreightWaves.

Emissions figures

Even though it appears that ocean-going ships pollute a lot, the emissions from moving one ton of cargo over 1 mile are much lower when using ocean-going ships compared to airplanes due to the large amount of cargo ships. being able to move at the same time, Kulisch said.

Grams of carbon dioxide emitted per tonne-mile of goods transported:

Rail 23
Water craft 59
Medium / heavy truck 202
Airplane 1,308

For every tonne of cargo transferred from an ocean-going ship to an airplane, an additional 1,249 grams of carbon dioxide is emitted into the atmosphere, according to data from the Environmental Protection Agency. This means that moving goods 1 tonne-mile by air is more than 22 times more polluting than shipping in terms of carbon dioxide emissions.

The company ShipHero, based in Garnerville, NY, is completely focused on the sustainability of shipping by land rather than air, Aaron Rubin, co-founder and CEO, told FreightWaves in a previous interview. . The company aims to provide two-day or faster shipping without the use of air travel, reducing emissions that are typically associated with fast shipping.

Transporting goods by air is not only more polluting than all other modes, but also more expensive. Rubin said companies use slower modes of transportation when they can because it saves money. But port congestion and shipping delays are making retailers desperate to get their products into the hands of customers and stock shelves for the holidays.

“If you don’t have a product, you’re just going to put it on a plane because you need something to sell, and ships take forever right now,” Rubin said.

Reduced costs, limited air freight space

The big price difference between sea freight and air freight narrowed significantly this summer, as container freight prices skyrocketed. However, the limited availability of air cargo space is slowing this ocean-to-air transition.

“Given the collapse in the cost split between air and ocean, we should expect to see more of these modal shifts. Shippers have always had to balance cost and service while responding to market conditions. But the day is not far off when freight purchasing decisions must balance costs, service and emissions in a total logistics cost. This sure future is why there is so much emphasis on aligning the industry around carbon accounting standards, ”said Cole.

The International Air Transport Association recently said air cargo rose 7.7% in August, despite a 1.6 point drop in cargo space.

“With passenger belly space still in short supply due to the limited number of international trips, retailers are trying to hire entire planes to move their product. And the ocean tariffs are so high that air freight costs are easier to accept nowadays. The reality is that air is not a viable substitute for most shipping, as air only carries 1% of trade in normal times. There just isn’t enough space to handle what can fit on giant ships, ”Kulisch said.

The price of shipping a 40ft container by ocean vessel from Shanghai to Los Angeles (green) compared to the price per kg to ship goods from Shanghai to North America by air freight (blue). To learn more about FreightWaves SONAR, Click here.

The price per kilogram of air freight isn’t a direct comparison for 40ft containers, but the trends tell a compelling story.

Under normal circumstances, air transport is 10 to 12 times more expensive than sea transport, Kulisch said. However, current supply chain stressors and backlogged ports have dramatically increased the cost of shipping goods on the Asia-US route. Kulisch noted that air fares were only five or six times more expensive than sea fares this summer.

This trend, Kulisch said, is cooling off as the aviation industry continues to struggle with limited space for the stomachs of passengers. As businesses grapple with the peak season with shipping delays, port congestion, space limitations for air cargo and capacity constraints, Cole said emissions and environmental impacts would eventually join. cost and time on the list of considerations when it comes to choosing modes of transport and carriers.

Click here for more articles on FreightWaves by Alyssa Sporrer.

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