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MANY OCEAN SHIPPING LINES ARE MOVING TO AIRCRAFT

By: Ann Knapp | CRP, GMS, CMC

January 31, 2023


MANY HOUSEHOLD GOODS SHIPPING COMPANIES ARE INVESTING IN AIR TRAVEL

As shippers look for more efficient ways to ship household goods worldwide,
ocean freight companies are increasingly turning to air cargo. Although
airfreight represents only a tiny section of the broader cargo industry, the
pandemic has caused it to become more prominent due to supply chains, travel
bans, and consumer spending issues.

 

Air travel has become increasingly important for companies engaged in maritime
trade due to the recent pandemic. With more people shopping online, household
goods shipping companies are struggling to keep up with demand. This has caused
ships to be idly anchored at congested ports, unable to dock for weeks at a
time. Further complicating matters is a shortage of workers assigned to load and
unload vessels. Containers that could be used to hold exports are instead
sitting unused, while exporters with plenty of goods to ship need help to get
containers.

 

 

The three dominant European container shipping companies (AP Moeller-Maersk, CMA
CGM Group, and Mediterranean Shipping Co.) have primarily avoided airfreight,
feeling that it is an expensive distraction from their core businesses of
operating giant vessels, container terminals, and related logistics operations
around the world. However, executives claim that many customers are now opting
for air shipping because it is more cost-effective and reliable. Maersk, the
world’s largest container shipping company, began an air cargo division in April
last year and now has a fleet of 15 planes.

 


OCEAN FREIGHTERS TURNING TO BUY AIR PLANES

Boeing and Airbus are now part of this equation as they started selling
freighter versions of their newer widebody planes. These freighters are more
fuel-efficient than older cargo jets. And to show the rising demand for
converting old passenger planes into freighters, it should be noted that some
have been booked up for years.

 

In recent reports, Maersk is anticipating free cash flow to be about $19 billion
by the end of 2022. The company plans to obtain seven Boeing 767s (purchase
three and lease four) by the new year. The idea would be to have aircraft fly
routes between Asia, the United States, and Europe. 

 

Last year, Maersk moved into the air cargo game and increased volume by 100%
after purchasing German air freight company, Senator International. In addition,
Maersk has been buying airplanes for its air cargo division, which was formerly
called Star Air. The division, contracted by United Parcel Service Inc. and
Germany’s DHL to fly freight, now operates with 15 Boeing-made 767 freighters.

 

Also, earlier this year, CMA CGM, the world’s third-biggest ocean shipper,
agreed to share cargo space with Air France-KLM. And on top of that, CMA CGM
said it would buy a 9% stake in the airline.

 

Numbers released by the International Air Transport Association (IATA), last
year, the airfreight industry grew over 21%. This means that revenue will
increase to $289 billion in 2022, up from $238 billion last year.

 

Boeing reported that about 400 freight planes had been added to the world fleet
in the past three years. This is an eye-opening 20% rise. Boeing is now
estimating that the global freighter fleet will increase to about 3,600 by 2040.
To put that number in perspective, it is currently around 2,000.


HOW INCREASED AIRFREIGHT WILL AFFECT GLOBAL MOBILITY & RELOCATION INDUSTRY

In the past, airfreight for relocations was too expensive, and many relocation
companies didn’t even consider it an option. However, the lowering costs and the
congestion of ports have now made a more realistic answer for many.

 

As airfreight rates become more affordable, international relocation companies
can choose to ship household goods by air. With more employers turning to lump
sum packages for relocations and ocean shipping delays being a common factor,
transferees are leaving more of their belongings behind when they move abroad
for a work assignment. The fewer belongings the employee brings means the
quicker they can move, meaning the more likely they are to choose airfreight for
their next relocation. Although the airfreight method is still quite costly, it
eliminates many relocation delays, significantly improving the transferee’s
experience.

 

Global Mobility Solutions (GMS) is the industry leader in Global Mobility, which
is why we stay on top of all topics regarding relocation. Visit our Knowledge
Base to learn more about hot topics in the relocation industry. And feel free to
reach out to us with any questions regarding the household goods shipment.


READY TO CALCULATE YOUR PROGRAM SAVINGS? REQUEST ACCESS NOW!

Are you ready to calculate your potential relocation program savings? Request
access to our easy-to-use Relocation Cost Savings Calculator. Your Mobility Pro
will grant your access request within 1 business day.




ANN KNAPP | CRP, GMS, CMC



Director, Transportation Services Ann has over 20 years of leadership experience
in the moving and relocation industries. She is a council member for the
International Association of Movers (IAM) Leadership Alliance. As a 2nd
generation mover, Ann has worked in all areas of the industry from survey
scheduling to claims settlement which has provided her with a well-rounded
understanding of the ins & outs of moving. Ann is responsible for the day-to-day
operations of the Transportation Team, the GMS Transportation Network, managing
contracts, policy advisement, and monitoring quality.

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ADDRESS

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15333 N. Pima Road
Scottsdale AZ, 85260

1.800.617.1904 

Available 24/7/365


ABOUT

Contact Us

About Us

GMS Client Login

Privacy Policy


OTHER SERVICES

Our Technology

Global Relocation

Group Moves

U.S. & Canadian Relocation


ADDRESS

Global Mobility Solutions
15333 N. Pima Road
Scottsdale AZ, 85260

1.800.617.1904
Available 24/7/365


ABOUT

Contact Us

About Us

GMS Client Login

Privacy Policy


ADDRESS

Global Mobility Solutions
15333 N. Pima Road
Scottsdale AZ, 85260

1.800.617.1904
Available 24/7/365


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© 2021 GLOBAL MOBILITY SOLUTIONS. ALL RIGHTS RESERVED.

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© 2021 GLOBAL MOBILITY SOLUTIONS. ALL RIGHTS RESERVED.

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