Air Freight vs. Sea Freight: Which is Right for Your Business?
Australia’s geographical location and limitations rule out land freight (trucking and rail) as options for shipping cargo overseas. Hence, Australian businesses usually have to choose between air freight and sea freight to facilitate their international shipping needs. Making the right choice is easier said than done, considering the evolving dynamics of international trade. This article will delve into the advantages and drawbacks of each option to help readers better understand and come to the most optimal conclusion.
Air Freight
Air freight makes up an important part of Australia‘s overall freight task. Spanning across every Australian state and territory, air-freight is used to transport high-value and time-critical goods such as parcels, seafood and medical supplies.
Further Reading: 8 Things You Should Know About Air Freight in Australia
Benefits
Speed
Air freight is the fastest option for long distance transportation of cargo – essential for perishable goods like flowers, food, and pharmaceuticals. Transit time is typically between 24-48 hours.
Global Coverage
Air freight allows businesses to reach just about any location on the globe so long as there is an airport nearby. Since planes fly, there is no obstruction of land, mountains, water, nor reliance on infrastructure like railroads, to hinder the movement of the shipment. This is often crucial when businesses need to ship to landlocked countries (e.g. Laos), or remote delivery points.
Resilience
While air and sea freight can both be delayed by unfavourable conditions like weather, the former has much more frequent schedules. In the unlikely event of a disruption, the recovery time required is much shorter, with flights departing at more frequent intervals as compared to sea freight.
An underappreciated value of air freight’s high frequency is that it allows exporters (and importers) to place orders on demand, reducing lead time, inventory, and warehousing costs.
Security
Air freight requires minimal handling of cargo, while airports are notable for being one of the most tightly regulated facilities. This greatly reduces the risk of damage from mistakes, theft, etc., giving shippers a greater sense of security.
As one of the most secure forms of transports, choosing air freight can, in certain scenarios, contribute to lower premiums for cargo insurance.
Drawbacks
Cost
Air freight’s biggest drawback lies in its cost – possibly up to 20 times the cost of alternative transport options. Key cost drivers include the plane’s jet fuel, maintenance, labor and landing fees – adding up to one hefty price tag that typically makes it the most expensive shipping mode.
Cargo Capacity
Airplanes have strict size and weight restrictions, which can pose challenges for large or bulky shipments. Additionally, peak seasons and high demand periods may lead to congestion and limited availability of cargo space, potentially causing delays and higher costs.
Logistics Difficulties
Air freight also comes with other logistics difficulties. Stricter regulations can often translate to trickier customs clearance processes. Certain dangerous goods and hazardous materials, for example, may be restricted or require special handling, increasing the complexity and cost of shipping.
Sea Freight
Australia’s international freight task relies heavily on shipping in terms of tonnage moved, with all of Australia’s international trade in bulk commodities transported by sea.
Benefits
Cargo Capacity
The shipping vessels that facilitate sea freight have high capacities, allowing them to carry large and heavy cargo. This makes sea freight ideal for Australian businesses that require bulk shipping, out of gauge shipping; deal with the shipping of cargo that air freight is unable to accommodate; or are shipping massive inventories en masse.
Cost
Sea freight allows companies to consolidate their goods and reduce individual shipments, making it more economical to ship large quantities of goods over long distances. Some estimates have shown that it is generally four to six times less costly than air freight.
Global Coverage
Sea freight offers extensive coverage to all major ports and destinations around the world. This global coverage makes it suitable for businesses engaged in international trade, allowing them to access markets across continents.
Flexibility
Ocean freight services offer a variety of options to suit different shipping needs, including Full Container Load (FCL) and Bulk Cargo (LCL) options. This flexibility allows companies to choose the most suitable shipping solution based on the size and urgency of the shipment.
Drawbacks
Speed
Ships and barges typically travel at 5-11 miles per hour via inland routes and 20 miles per hour on the ocean. Depending on the distance your goods are traveling, most water shipments can take up to a month to arrive at their destination.
Resilience
The longer transit time, as well as rigid shipping routes and schedules of sea freight means that shippers have less tools at their disposal to adapt to sudden developments that affect global trade. The Red Sea crisis that spanned 2024, or, to give an example closer to home, port strikes in Australia, all led to delays and disruptions that cascaded down the shipping routes and supply chain.
Further Reading: Supply Chain Resilience: Managing the Australian Port Strikes fallout
Security
Sea freight is more vulnerable to piracy and theft in certain regions. Some ports may even suffer from inadequate security measures, aggravating the risks of theft, piracy, or terrorism, which could disrupt shipments or result in significant losses.
How To Choose The Right Option
Product Specification
At its core, the most suitable freight option is determined by the specifications and requirements of the product itself. For example, shippers that need to move bulky and/or heavy cargo will find sea freight more applicable to their needs. Conversely, businesses that need to ship high value and/or perishable goods (i.e. cold chain logistics), should prioritise air freight options, in spite of its high costs.
Lead Time
If the cargo can be shipped via both air and sea, the next major factor to consider would be the lead time required. Regardless of whether the business is pursuing a “Just-In-Time” supply chain model, understanding and planning for the lead time required is necessary to ensure that the goods are delivered to its destination punctually. The essential question to ask here is: Can it wait? If one cannot afford to wait or incur any delays, air freight would be to option to pick.
Cost Considerations
Another important aspect to consider would be the costings involved for each shipping option. Not just air or sea freight, mind you – one needs to fully evaluate the whole package from point of pick-up to point of delivery.
This is because air and sea freight, despite their strengths in moving goods over large distances, are conventionally insufficient to accomplish door-to-door shipping. One still needs to factor in the first and last mile delivery (usually via trucking), cargo handling fees at the respective terminals, warehousing costs, etc.
Conclusion
In conclusion, the choice between air freight and sea freight ultimately hinges on the specific needs of your business, including factors such as speed, cost, cargo size, and destination. While air freight offers unparalleled speed, global coverage, and security, its high costs and limited cargo capacity may make it unsuitable for larger, bulk shipments. On the other hand, sea freight is a more cost-effective option for large volumes of goods, but its slower transit times and susceptibility to disruptions can be a significant drawback for time-sensitive deliveries.
For businesses seeking the ideal shipping solution, it’s crucial to carefully weigh these factors and choose the method that best aligns with your operational goals and budget. Regardless of whether you opt for air or sea freight, working with a reliable, experienced freight forwarding service can help streamline your logistics, optimize costs, and ensure timely delivery.
Arc Freights is Australia’s leading Freight Forwarder offering QUALITY & RELIABLE logistics services in more than 140 countries. Having plied our expertise in ASEAN for nearly two decades, we are the trusted partner for logistics between Australia and Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. With expert knowledge, advanced technology, and a commitment to reliability, we provide seamless logistics management that helps you focus on what matters most—growing your business.
