Air freight Vs Sea freight: How To Make The Most Money Out Of Your Supply Chain
If you’re looking to understand the differences between air freight and sea freight, including the advantages and disadvantages of each, this article is the right place to start. We’ll look at each factor in detail and suggest what to look out for when choosing your method of transport.
Air Freight Or Sea Freight – Why Compare?
Freight is often the biggest contributing factor to supply chain costs. Businesses will have to concern themselves with the aspects of freight and the hidden costs associated that may impact their bottom line. Costs such as duties and GST, storage charges, demurrage charges, detention, inspection charges, waiting time and so on are important considerations to take into account.
In order to stay competitive in a fast-paced 21st century economy, importers should aim to minimise their costs and waiting time when shipping material from overseas. The differences between air freight and sea freight, make a critical difference and importers should be aware of this.
Air Freight Or Sea Freight – Which Is Cheaper?
As we’ll explain below, sea freight will generally be cheaper. This is shipping takes longer but naturally the volume of goods moving by sea is higher, offering better economies of scale.
When you are shipping goods from overseas, you’ll likely encounter the term chargeable weight. ‘Chargeable weight’ is what the shipping line or airline use to determine the cost of your shipment, which may either be ‘volumetric weight’ or ‘gross weight’. Please read our blog on chargeable weight and volumetric ratios where we discuss this in further detail.
You can compare the costs of your shipment using air freight or sea freight by downloading our volumetric calculator.
But price is not the only consideration you should take into account.
Key Considerations When Choosing Air Freight Or Sea Freight
Below we’ve listed a number of considerations for your business to take into account when deciding between an air or sea freight service. We’ll consider factors such as speed and urgency, costs, risk, contractual obligations, environmental impact and reliability. It’s important not to consider each factor in isolation, but rather to consider the combined effect of all of them on your business.
There is no doubt that air freight is much faster than sea freight. If your freight is urgent, and you’re willing to pay a higher price for shipping if it will arrive sooner, air freight would be the more appropriate option. However, as stated in our China blog, shipping from Shanghai to Australia via sea can take just 13 days. If this surprises you then you should ensure you are comparing transit times advised to you by your forwarder rather than assuming that sea freight transits are extremely long.
As mentioned above, depending on how much you are willing to pay (especially considering urgency), you may find yourself more than willing to pay extra for air freight to ensure your stock arrives within a short time frame. On the other hand, if you have allowed for a long lead time sea freight is much more cost efficient. It is also important, in this regard, to compare insurance premiums for air freight and sea freight should you purchase a marine insurance policy.
It is sometimes the case that air transport is affected by poor weather or other exceptional circumstances such as industrial action. In September 2019, for instance, British Airways grounded its cargo operations when pilots went on a major strike. Furthermore, planes can be exposed to engine failure or an emergency landing. These are extremely rare, however, and air freight is considered one of the safest ways to ship cargo.
Sea freight is also reliable, with vessels built to overcome extreme weather conditions. Nevertheless, currents and harsh weather can cause unexpected delays. Another rare threat to cargo is piracy. It is important to consult your freight forwarder when considering these options and ensure you have marine insurance in the event of damage or total loss of cargo.
Contractual obligations to a buyer
Consider if you’ve got any obligations to your customers contractually. If your buyer requires a product before a certain date, you may find that a fast air freight solution is the option to choose. Conversely, perhaps there is a contractual obligation to keep costs to a minimum, in which case the answer may be to use sea freight. If you are ever in doubt about a term in your contract, we advise consulting with a legal professional.
Stock on hand
Depending on what stock is available on hand, you may be able to utilise sea freight or, if there is no stock on hand and the situation is urgent, utilising air freight. These options are situational and in these circumstances you will often need to make a choice on a case by case basis.
An advantage of ocean shipping is that you can ship heavy and bulky cargo much easier than with air freight. Air cargo is typically used to transport unitised cargo, when your goods become over dimensional you may need to consider freighters, charters or part-charter solutions. These options can have a substantial impact on cost.
Competition is of utmost important in today’s global economy. Businesses have learnt to compete with cheaper offerings, faster shipping times and quicker order fulfilment. If your competitor base is strong you may want to consider air freight over sea freight to offer a faster to door service.
To many customers, environmental policies are important. If you place importance on having a ‘green’ brand or are targeting an environmentally conscious market, you may want to consider which of the two shipping methods is more environmentally friendly.
Sea freight is generally much more environmentally friendly than air freight. The Department for Environment, Food and Rural Affairs in the UK conducted a study on the greenhouse gases emitted by both air and sea freight. In regard to two tonnes of freight transported 5000km, the sea freight emitted 150kg of CO2e and the airfreight emitted 6605kg of CO2e. Evidently, there’s a significant difference between the two.
Summary: Air Freight Vs Sea Freight
- Air freight is much faster, but generally more expensive than sea freight
- Both are reliable modes of transport, but both can encounter unexpected delays
- Sea freight is typically more environmentally friendly than air freight
- Sea freight is more suitable for a heavier load capacity than air freight
- Always consider the urgency of stock, the terms of your contracts with customers and the actions of your competitors before making a decision
Planning In Advance: Building Sea Freight Time Lines Into Your Supply Chain To Maximise Your Money
In most cases, sea freight will always be the cheapest option when shipping, but with this comes longer transit times. However, if you build these considerations into your supply chain you can still run your supply efficiently. You should consider:
Transit time port to port
Due to the amount of time it takes to ship using sea freight, it is important to allow for a realistic lead time so that neither you, nor your customer is disappointed.
Possible delays at transhipment ports
Delays can occur at any time, even in ports. This can be because of a variety of reasons such as:
- Harsh weather conditions – whilst ships are built to withhold rough weather conditions, aggressive storms can bring cause significant delays in ports. In 2018, for instance, it was reported that heavy fog caused delays and congestions in Shanghai and Ningbo ports.
- Congestion of ships – some ports, such as Singapore, can become so busy that ships are congested. It can sometimes take numerous days to reach an available berth.
- Technical faults in port or on the ship
In order to avoid these delays, plan ahead and be prepared.
If weather may be an issue, keep in touch with your forwarder throughout your shipment and adjust accordingly. If documentation might be an issue, contact an expert freight forwarder to ensure your documentation is ready and correct (such as, for instance, having the correct HS Codes on your commercial invoice). If customs might be an issue, have your paperwork prepared and abide by the port’s laws and rules as to what you can and cannot bring into the country.
- Handling time at port of origin – this will usually be two days prior to ship cut off.
- Handling time on arrival – typically this will be two days from ship arrival.
When Air Freight Is The Only Option
Sometimes urgent deliveries mean air freight is the only option – but that doesn’t mean you must pay a fortune.
Consider longer transhipped options for less urgent cargo. Ask your forwarder to compare multiple airlines and/or shipping lines and search for the most appropriate option for you.
Additionally, air freight is especially convenient and useful for shipments of high value, as well as being of low volume. As discussed above, air freight is typically used for unitised cargo rather than large container shipments.
Air Freight Costs – Where Flying Becomes Expensive
Air freight is calculated per kilogram of the chargeable weight. In general, anything over 500kg starts to become expensive.
The heavier an item is, the more difficult it becomes to manage and move around.
Make sure to contact your expert freight forwarder in advance, and they will inform you the best way to manage your shipment.
With the advent of commercial aeroplanes in the modern world, ships are no longer the only way to transport cargo for customers and businesses. Aircraft provides plenty of benefits compared to shipping that importers must pay close attention to. However, these benefits come at the cost of load capacities and, of course, the greater cost itself.
Shipping via sea freight can keep costs low and load capacity high, but generally your goods will take longer to arrive at the end destination.
Prior to making a final decision, we suggest contacting an expert at International Cargo Express. You can leave a question or comment below, or contact us.