More air cargo finds its sea legs during COVID-19 More air cargo

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.

Mortan Bach, global chief commercial officer, Shipco Trasport (Courtesy photo)

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.

L.A. sea-air service throughput

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.

Tim Tudor, CEO, ECU Worldwide (Courtesy photo)

“We are targeting airfreight users and really not trying to convert our standard LCL clients to XLERATE per se. The commercial benefits are allowing our freight forwarding customers to give their “clients a third or middle service option both in price and transit between pure air cargo out of China and the standard ocean LCL service,” Tim Tudor, ECU Worldwide’s Miami-based CEO said.

Transit times are between 14 to 23 days, depending on the Chinese origin port and the destination European airport, while the cost is about one-fourth that of pure airfreight.

After devanning containers and reloading the cargo onto airline pallets at its facility in Los Angeles, Shipco turns the freight over to all-cargo operator Cargolux for air transport to Europe.

Both ocean wholesalers credit the success of their L.A. sea-air service to trans-Pacific, U.S.-flag ocean carriers Matson Navigation (NYSE: MATX) and APL, a subsidiary of French line CMA CGM, which operate scheduled container service from China and North Asia to the Port of Los Angeles. 

While other trans-Pacific liner carriers have announced numerous blank sailings during the COVID-19 pandemic, Matson has even added chartered vessels to increase its capacity to two sailings per week, according to Tudor. For Asia origins that are not served by Matson, ECU Worldwide uses APL’s “Gate Out” service.

“We are most certainly focused on knowing when these blank sailings will occur and adjust our schedule accordingly,” Tudor said.

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