News / Priority ocean services on the rise as air freight capacity becomes scarce

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Soaring airfreight rates have left some commodities on the ground, but expedited ocean services offer an alternative.

To offer a faster maritime link across the Pacific, less-than-container load (LCL) consolidator ECU Worldwide launched an LCL express service between Shanghai and Los Angeles towards the end of last month.

Its Xlerate offering uses Matson Navigation for a 10-day transit between the two ports and ECU claims this is the fastest port-to-port time on the route.

The traffic is unloaded in Los Angeles at the company’s bonded container station, 24 hours after its arrival, and moved on ECU’s bonded express truck service to eight inland container stations.

“Xlerate reiterates our commitment to provide an expedited LCL product to our freight forwarding clients from Shanghai to final container freight stations in the US,” said ECU Worldwide chief executive Tim Tudor.

“It combines the benefits of an express service with a day-definite arrival, and an all-inclusive simplified fee structure, which includes price per kilo on freight-on-board Shanghai basis and the final CFS destination fees.”

CMA CGM has also spotted an opening for a priority offering. Last month it launched Seapriority Go, offering priority allocation and loading for containers and includes a money-back guarantee. The service is available on all sectors in the line’s network.

Similar offerings have been around to cater to high-value commodities requiring expedited handling and movement, but they are increasing to meet a rising need.

“We definitely see a dramatic increase in queries received for expedited services. These requests at this point are more FCL than LCL,” said Ken Sine, vice-president North Asia at Crane Worldwide Logistics.”

The dearth of airfreight capacity, coupled with soaring rates in that sector, has elevated the appeal of such services, said Bob Imbriani, executive vice-president international at Team Worldwide.

“Almost immediately they become an option when you can’t get airfreight,” he said. “There isn’t tremendous capacity, but it became an alternative. It’s a good option if it’s available.”

Extended wait times for airfreight links have further augmented the appeal of expedited ocean services.

“If you use airfreight and wait 10 days for your flight and ocean is 12 days, why not?” Mr Imbriani said. “Some manufacturing clients can wait and adjust their schedules.”

Chris Connell, senior vice-president North America of Commodity Forwarders, a subsidiary of Kuehne + Nagel, claimed these services could also become an option for perishables not viable to be shipped by air at current prices.

Mr Sine added that personal protective equipment (PPE) and medical equipment would be moved on such services before long.

“Presently, we see many PPE shipments moving via airfreight to provide immediate relief and once that stock gets to a level that meets the needs of our frontline heroes, we will see a modal shift to these expedited ocean services to continue to feed the demand at a reduced price,” he predicted.

The pricing should beat the rates charged for sea-air, which has become another popular alternative to airfreight. Some forwarders have reported a marked rise in their clients’ interest in that modal mix.

“We have to explore every option” Mr Imbriani said.