Ocean disruption drives no mass shift to airfreight, DSV warns

Airfreight can cost up to 20 times more than ocean transport, and that premium is keeping most shippers at sea despite ongoing disruption to container shipping, according to DSV.

Achim Martinka, the forwarder's head of global airfreight, told TIACA's Air Cargo Forum in Miami last week that conversion from sea to air remained limited. "Most of the customers still stay on the seafreight side because they are not used to having shipments on time anyway," he said. "If you have two or three weeks' delay, this is a normal thing."

The arithmetic is stark. A delay of two or three weeks has become routine for many ocean shippers; switching to air can multiply transport costs by a factor of up to 20. "So this is really a very tough financial decision to take," Mr Martinka said. Conversion volumes, in his assessment, are "still not in huge numbers" and remain at a lower level than disruption headlines might suggest.

What does the delay cost late movers?

Shippers that wait too long before seeking alternative lift face a second penalty: ad hoc capacity is priced above contracted base loads. DSV signs its airline contracts for six or 12 months, so anything booked spontaneously costs more than freight already committed on the aircraft.

Where the duration of a disruption is uncertain, Mr Martinka argued, shippers need to begin arranging an airfreight solution early. "Otherwise, you're going to be the last one, and then capacity is not affordable anymore," he said.

That competition for lift is visible at Atlas Air. Martin Drew, the carrier's chief strategy and transformation officer, said forwarders and shippers increasingly want the certainty of dedicated capacity (aircraft reserved under long-term contract rather than booked on the spot market).

"The contract durations we have are very lengthy, because forwarders, in particular, and shippers want that capacity locked-in," Mr Drew said. "It helps from a planning perspective, knowing they've got that capacity, especially in an environment where supply is constrained."

Atlas cannot currently meet the demand it sees. "We've got a pipeline today of business that is tens of aircraft, and we can't service that demand," Mr Drew said.

Why is switching modes harder than it looks?

Securing space is only the first obstacle. Mr Martinka warned that ocean shipments require new documentation and operational preparation before flying, including:

• dangerous goods checks
• verification against aircraft dimension limits
• rebuilding cargo for flight loading

The practical difficulties were illustrated by Emir Pineda, director of air service development at the Miami-Dade Aviation Department, who described a sea-air trial moving Honduran okra to the UK via Miami and Amsterdam.

The project required a USDA (US Department of Agriculture) permit to bring the perishable product by ship from Central America to Miami, then move it unopened to the airport for a freighter flight to Europe. "Sounds pretty simplistic, but it was actually quite complicated," Mr Pineda said.

The shipment arrived as two containers — a large single load for one aircraft. The freighter capacity had to be available on the day the ship docked, because USDA allowed only two days to move the cargo. The cool chain (temperature-controlled logistics) had to be maintained throughout, with refrigerated trucks carrying the produce from Amsterdam to the UK.

"In the end, it worked. One time," said Mr Pineda. Consistency was the barrier: the operation required a shipper willing to load at origin and reliable capacity for 60 tonnes over several weeks. "What do you tell that customer when the season's over? 'Could you bring back the freight?'" he asked. "That doesn't work for forwarders; they want consistency."

Is resilience planning changing flows?

Most shippers have developed some form of emergency plan since Covid, Mr Martinka said, but he is not seeing a regular shift of ocean volumes into airfreight purely to keep a contingency route warm. "It is certainly a part of a resilience plan, which perhaps needs to be tested from time to time," he said.

Forwarders and airlines have nonetheless become faster at adapting networks to disruption. DSV's ACMI capacity (aircraft, crew, maintenance and insurance — a form of wet-leased airlifter) lets it redirect its own network daily. "We can switch immediately if that's needed for the customer," Mr Martinka said.

His closing verdict on the market's flexibility: "The good thing in air cargo is that airfreight is like water: it's going to find its way."

With Atlas reporting unserviceable demand for tens of aircraft and spot rates punishing late bookers, the constraint on mode shift appears to be cost and consistency rather than the industry's ability to reroute freight.