Breath of sea-air
Non-vessel-operating common carrier Shipco Transport has recently expanded its service of combining neutral ocean and air cargo consolidations moving from Asia to destinations in Central and South America.
With this service, less-than-containerloads travel by ocean container from Asia to Los Angeles where they are devanned. Shipments designated for air transport are then transferred to Los Angeles airport, and are either flown directly to the final destination or team-trucked to Miami where they connect with flights to South and Central America.
'We started the service last year out of Shanghai,' said Kim Ekstroem, Shipco's senior vice president, in an interview. 'We have daily LCL departures from Shanghai to Los Angeles, and that makes for a perfect platform for a sea-air product.'
He added the key to operating this type of service successfully is to have total control over the process.
'We load the containers, we do the devanning, cut all the documentation, so for the forwarder this becomes a seamless product which is very easy to handle and sell,' Ekstroem said. 'We offer one simple per-kilogram rate from port of origin to airport of destination.'
Shipco's SeaAir service has recently added Pusan, Tokyo, Taipei, Hong Kong and Shenzhen to its list of Asia origins. The average transit times from these Asian cities to South and Central America through the SeaAir service is 16 to 20 days.
With the addition of these new China origins, Shipco now offers 83 direct LCL export services to the United States and 24 directly into Los Angeles. Once the shipments are prepared for air transport they are often loaded onto daily departures.
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| 'We load the containers, we do the devanning, cut all the documentation, so for the forwarder this becomes a seamless product which is very easy to handle and sell.' | |
| Kim Ekstroem senior vice president, Shipco Transport |
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'Right now we see a lot of activity to Brazil and Venezuela,' Ekstroem said. 'Particularly Venezuela is interesting. There are heavy delays in the seaports of Venezuela, and we help the forwarders circumventing this by flying the last mile, so to speak.'
Shipco's SeaAir service has become particularly popular among freight forwarders in the peak season. During this period, an air shipment from Shanghai may sit two to three days waiting for uplift to the United States. Then it may sit another couple of days at the transit point. A total transit time for an all-air shipment of 10 days during the peak season is not uncommon, Ekstroem explained.
'There are a lot of products that cannot wait for a 50-day transit via ocean, but certainly do not have to arrive in a few days either, and this is where sea-air comes into the picture,' Ekstroem said. He added that if the forwarder's customer can accept an additional transit time of six to seven days over straight air carriage, then the total transportation cost may be reduced by 60 percent to 70 percent via a sea-air service.
Dubai in the Persian Gulf has stood out among the hubs consistently catering to sea-air service. With its international airport beside an equally bustling seaport, Dubai easily allows containerized freight from Asia to be unloaded and placed on numerous outbound flights to Europe.
Several years ago, when there was very little air cargo capacity on flights to Australia and New Zealand, air-sea services popped up. German airline Lufthansa, for example, introduced an air service from Europe to Shenzhen, and then switched to ocean transport south to Australia. Shipco, which has had an air consolidation service since the mid-1990s, offered a similar service for cargo from the United States via Hong Kong to Australia.
'Air-to-sea or sea-to-air will only work in trades with very high air freight rates and over long distances,' Ekstroem said. 'You need to be able to save a lot of money over conventional air freight, and cut down the transit time over conventional ocean freight. If you only can save a few cents, or cut a few days, it has no attraction.'
He noted that all-water transits from Asia to South and Central America have been particularly impacted by slow steaming and overbooked vessels in the past year.
'If the air freight rates start to go down, or vessel capacity opens up, you will see lesser demand for sea-air,' Ekstroem said. 'But then a new opportunity might open up somewhere else.'
Econocaribe Consolidators, another neutral consolidator, has long provided its forwarder customers with air-sea service from Miami to the Caribbean and Central America. When the cargo for this service, arrives by airline in Miami from Asia, it's shuttled to Econocaribe's nearby U.S. Transportation Security Administration-approved and Customs-bonded warehouse, where it's staged for onward ocean transport to its forwarders' customers in the Caribbean and Central America.
'The transit time to all of the markets in the Caribbean and Central American via ocean is less than one week and we have service to each at a minimum of once a week,' said John Abisch, president of Econocaribe. 'Air freight from Asia to Miami and ocean from Miami to the Caribbean and Central America is about a 10-day service and the cost is much less than air-to-air service.'
Some large forwarders have raised their sea-air service profiles. Damco, the logistics services arm of A.P. Moller – Maersk, in mid-August appointed Serge Tripet to the new position of global head of sea-air product. Tripet will focus on sea-air opportunities in the Asia-Pacific, Europe and Middle East markets, the company said.
'If you look at it with air freight eyes, this is a lot of freight. And we are in a unique position to offer this product,' said Ekstroem, touting the worthiness of pursuing sea-air services. 'Shipco is a leader in the transpacific LCL import market, and Shipco has a dominant position as a neutral air freight wholesaler in the U.S. export market. It is simply a matter of connecting the two.'
Yet, executives interviewed by American Shipper believe cargoes generated from sea-air services will remain a minor component of their overall volumes. 'The volume of air-sea we handle is small and my expectation is it will remain that way,' Abisch said. ' Chris Gillis
