Airfreight premium of up to 20x keeps shippers at sea despite ocean disruption

Emergency airfreight can cost up to 20 times more than ocean carriage, and that arithmetic is keeping the bulk of disrupted sea freight out of the sky, DSV's head of global airfreight, Achim Martinka, told TIACA's Air Cargo Forum in Miami last week.

Speaking on the sidelines of the event, Martinka was blunt about the economics. "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. And if you would switch to airfreight, it could be up to 20 times more expensive. So this is really a very tough financial decision to take."

The premium, translated simply: a shipment costing $2,000 to move by sea could approach $40,000 by air. For most cargo, that gap swallows any benefit from recovering two or three weeks of transit time.

Conversion volumes from ocean to air remain modest, Martinka confirmed: "The conversion to air is still not in huge numbers. It's still on a lower level, from what we see."

Why waiting makes it worse

Shippers that hesitate before seeking alternative lift face a second penalty. DSV typically signs contracts with airlines for six or 12 months, so ad hoc requests price well above the base load already committed on the aircraft. "Everything which comes on a spontaneous, ad hoc basis will be even more expensive than the base load already on the aircraft," Martinka explained.

When the duration of a disruption is uncertain, shippers should start arranging airfreight early, he warned. "Otherwise, you're going to be the last one, and then capacity is not affordable anymore."

Dedicated capacity demand outstrips supply

The scramble for certainty is visible at Atlas Air, where chief strategy and transformation officer Martin Drew said forwarders and shippers increasingly want dedicated capacity locked in. "The contract durations we have are very lengthy, because forwarders, in particular, and shippers want that capacity locked-in," he said. "It helps from a planning perspective, knowing they've got that capacity, especially in an environment where supply is constrained."

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

Documentation and rebuilds slow the switch

Securing space is only part of the problem. Martinka noted that ocean shipments moving to air require new documentation and operational preparation, including dangerous goods checks, verification of aircraft dimensions and rebuilding cargo for flight.

Emir Pineda, director of air service development at the Miami-Dade Aviation Department, illustrated the friction with a sea-air trial moving Honduran okra to the UK via Miami and Amsterdam. USDA granted a permit to move the perishable by ship to Miami, then transfer it unopened to a freighter within two days of arrival, while maintaining the cool chain throughout.

"It got to Miami: two containers – that's a lot of cargo for one airplane," Pineda said. Freighter capacity had to be available on the exact day the ship docked. Refrigerated trucks carried the cargo from Amsterdam to the UK. "In the end, it worked. One time."

The scheme collapsed under its own complexity: it required a shipper willing to route via Miami and consistent capacity for roughly 60 tonnes over several weeks — capacity that seasonal produce cannot guarantee year-round. "That doesn't work for forwarders; they want consistency," Pineda said.

Resilience, not migration

Most shippers have built some form of emergency plan since Covid, Martinka said, but he sees no standing shift of ocean volumes into air purely to preserve a contingency lane. "It is certainly a part of a resilience plan, which perhaps needs to be tested from time to time," he cautioned.

Networks have nonetheless become faster at adapting, he conceded. DSV's ACMI capacity lets it redirect freighters daily: "We can decide every day with our ACMI flights where to fly. We can switch immediately if that's needed for the customer."

His closing metaphor carries the market's pragmatism: "Airfreight is like water: it's going to find its way." Whether it flows at a price shippers will pay, the conversion numbers so far suggest, is another matter entirely.