SIMIC

AIR cargo could benefit from a reduction in ocean shipping reliability next year as box lines contend with antitrust rule changes.

Speaking at the TIACA executive summit, Xeneta chief airfreight officer Niall van de Wouw ranked the criteria shippers considered when selecting between air and ocean.



He said that reliability was by far the most important ahead of environmental impact and price, reports London's Air Cargo News.



Mr Van de Wouw said that airfreight rates rise - indicating higher demand - when ocean schedule reliability decreases.



He pointed out that airfreight rates reached a peak in April last year when ocean reliability was at its lowest.



Looking at the current market, Mr Van de Wouw said that the low rates in ocean sailing meant shipping lines were missing out sailings to balance supply and demand.



"Interestingly enough, we have seen [reliability] go down a little bit," he said. "They say there is a bloodbath in rates on the ocean side which means more blank sailings, they cancel the vessels which reduces the reliability which makes shippers a little bit worried."



And next year there could be further disruption after the European Commission in October decided not to extend container shipping's block exemption from certain competition rules.



The current block exemption runs until April 25, but after this date container carriers will be less able to cooperate on operations.



"[Block exemption] will no longer be extended so there is a lot of concern about what the ocean freight market will look like from a supply point of view from April next year," said Van de Wouw.



"If that were to result in more competition, less consolidation, it could well be that certain niche markets become underserved, become less reliable, and therefore potentially supportive of airfreight demand."