Despite recent price reductions, air cargo will continue to benefit from the narrowing of the pricing gap with ocean shipping.
On the first day of the IATA World Cargo Symposium (WCS), IATA chief economist Marie Owens Thomsen cited statistics showing that the price disparity between ocean and airfreight was at its lowest in September last year, when port congestion drove container pricing to record highs.
At the time, the cost of air cargo was less than five times that of ocean shipping, compared to a historical difference of 10–20 times.
This encouraged many forwarders and shippers to use air cargo to maintain supply chains. As issues in ocean shipping have subsided, the figure has risen back above a five-fold differential. However, not to the point where air cargo will no longer benefit. “The rise in maritime fares created a relative price advantage in favour of air cargo,” Thomsen explained. “We are still benefiting from this, but there is evidence that we are moving in the opposite direction.”
“For the time being, I believe this will continue to support air cargo, but I believe it will wane in 2023—not necessarily disappear, but become somewhat less supportive.” Accenture’s Seabury Consulting managing director, Marco Bloemen, also emphasised the trend of declining ocean freight pricing. According to Bloemen, ocean freight pricing in January 2022 will be approximately 5.5 times higher than it was pre-Covid.
While this had decreased, he stated that ocean shipping was still 2.2 times more expensive than before Covid. Ocean freight rates from Asia to the US west coast were 80 percent lower in mid-September, at $3,896 per 40-foot container, according to Freightos data.Prices from Asia to the US east coast are down 61 percent year on year, with a 40-foot container costing $8,553.
