Consolidators International chief sees cargo shift from air to ocean

Consolidators International chief sees cargo shift from air to ocean Julian Keeling, chief executive officer at Consolidators International Inc. finds a worrisome trend in the decline of air freight volume during the past two years at the two largest West Coast gateways: Los Angeles International Airport and San Francisco International Airport.

Keeling

   While the declines are small, less than 5 percent at each airport, it flies in the face of all the glowing reports of a healthy and growing air cargo industry, Keeling said.
   Keeling believes the answer lies in the enormous growth of ocean shipping between West Coast ports to destinations west of the International Dateline.
   “The ports of Long Beach and Los Angeles, making up the southern California seaport complex, have literally exploded with cargo volume during the past few years,” Keeling said. “This contrasts sharply with the declines in volume at LAX and SFO at the same time.”
   The CII chief noted that his customers, primarily air freight forwarders, are moving less of their shipments through LAX because of traffic choked highways leading to and from the airport, a freeze on new cargo construction at LAX and often inconvenient airline schedules for freight. “However, SFO with less congestion, also is witnessing a lessening of cargo traffic,” he noted.
   Keeling believes the international transportation business is changing, and not to the benefit of air. “While numbers of shippers are switching from expensive air to less costly sea, the reverse rarely happens. We almost never hear of a large or even small company announcing a switch from sea to air.”
   Adding to the pressures affecting air freight is a substantial increase in containership capacity entering service in 2007.
   “With all this new tonnage, ocean container rates inevitably will drop,” Keeling said. “Traffic managers may well be thinking, ‘air is the ideal transport mode to meet our just-in-time production demands, but sea is so much cheaper. Let’s save some real money and go with ocean.”
   Keeling believes forwarders should not waste their time in futile attempts to persuade the airlines to lower their fuel surcharges but try and find new ways to attract new customers to air.