World Air Cargo and Maritime Traffic
Although total maritime and air freight traffic have each expanded about 4.0 percent per year in the past decade, containership traffic has expanded faster, at about 9.8 percent per year.
Air cargo is only one part of the global goods distribution network. Shippers demand that shipments arrive at their destination on time, undamaged, and at a reasonable price, regardless of transportation mode. Different transport modes -- road, rail, maritime, and air -- can often move the same commodities. But shippers usually have only two choices for intercontinental freight: air and maritime. Maritime transport offers the primary benefit of low cost; air transport offers the benefits of speed and reliability.
The maritime industry, as measured in tonne-kilometers of goods transported, is much larger than the air cargo industry. In 2007, the world maritime industry generated a total of 60.9 trillion RTKs of traffic compared to 193 billion RTKs of traffic for the air cargo industry. However, this maritime traffic includes the movement of bulk commodities such as oil, metal ores, and grains, most of which cannot be directly compared to the high-value dry commodities associated with transport by air. A better comparison of the air and maritime modes can be made using the remaining maritime dry cargo after bulk commodities have been subtracted, which totaled about 17.9 trillion RTKs in 2007.
Containership transport, a segment of maritime dry cargo, is one of the fastest growing forms of freight transport. Since the late 1980s, globalization and regional specialization of industry, particularly in Asia, have driven rapid growth in freight flows on containerships. As of 2007, worldwide containership traffic is estimated to have totaled 6.4 trillion RTKs, representing about a third of world maritime dry cargo. Since 1997, containership freight traffic has averaged 9.8 percent growth per year in terms of tonne-kilometers.
To accommodate the demand for standardized freight transport, the world containership industry has grown rapidly, almost quadrupling in size from 1,100 ships in 1987 to over 4,300 ships in 2007. Driven by the need for increased capacity and lower unit transportation costs afforded by economies of scale, ship size has also increased. In 1987, average ship capacity was about 1,000 twenty-foot equivalent units (TEU) and the largest ship was about 5,000 TEU. By 2007, the capacity of the largest containership had almost tripled to 14,500 TEU and the average ship size had grown to 2,500 TEU.
Detailed data on the operational costs of the containership fleet are not publicly available, but it is estimated that from 1987 to 2007, the increased ship size of the world containership fleet has reduced the cost of transporting a unit of cargo by 8.0 percent to 30 percent. These estimates are for the effect of ship size only and do not include other variables such as capital costs, changing fuel price, infrastructure requirements, ship speed, or routing.
The air cargo industry has not been static, and there have been dramatic changes in the freighter airplane fleet as well over this time period. For long-range service, the air cargo industry has transitioned from standard-body jet freighters such as the 707 and DC-8, through first-generation widebody aircraft exemplified by the 747-200 and DC-10, to newer, more efficient, aircraft such as the 747-400 and MD-11. This evolution of the long-range freighter fleet has reduced the average cost of transporting a unit of cargo in 2007 by 15 percent compared to 1987, which is in line with the improvements made in the maritime industry. The 747-8F and 777F now entering service will bring greater efficiency to the fleet in the future. The current and future competitiveness of the air cargo industry is augmented by twin-aisle passenger aircraft, which possess freight capability greater than that of the aircraft they replace.
The recent unprecedented rise in fuel price has led to increases in the cost of air cargo. The rising price of air cargo has caused some shippers to increase their use of maritime transportation. This practice is not new. Some commodities, particularly consumer goods, have historically migrated from air freight to containerships as they matured in their product life cycles and no longer warranted the speed and reliability of air cargo. Although it might be possible to find specific examples of commodities or products shifting from air to sea in response to rising air cargo prices, examination of the trade data for the United States shows no systematic shift from air freight to maritime transport over the past 10 years.
Rising fuel costs have affected sea and air transportation equally. Between 1994 and first quarter 2008, the price of marine and jet fuel increased 600 percent. Fuel reached 60 percent of operating expenses for ships and airplanes. The air cargo and containership industries have responded to improve fuel efficiency. Some maritime shipping companies have slowed the speed of their ships to reduce fuel consumption, and airlines have accelerated the retirement of older, less fuel efficient airplanes, replacing them with more modern aircraft.
The maritime fleet and air cargo fleet will continue to develop. Further growth in containership size may slow as technical constraints such as power plant, propulsion, and structural limitations are reached. Reductions in the cost of transporting cargo by sea are expected to continue as new ships enter the fleet and the average ship size continues to increase. Growth in containerships may be constrained by port capacity and congestion, particularly in North America and Europe. Based on the ships and airplanes forecast to enter service, these transportation modes will see similar efficiency improvements in the next five years.