Sea Freight vs Air Freight - What you need to know
If you're a merchant or manufacturer shipping to andfrom overseas throughout the past 18 months, you will have been faced withsome challenging decisions in terms of freight costs and the differentservices available.
The global supply chain has been stretched to andbeyond its capacity due to the coronavirus pandemic, a huge surge ineCommerce, and a lack of available space across all different modes offreight. Shippers of all sizes and scales have had to deal with risingcosts and longer lead times because of the disruption, meaning thatinformed decision making and accurate forecasting have become moreimportant than ever.
In this post, we will explore two of the most widelyused modes of shipping - sea freight and air freight - by weighing up thepros and cons of each, to help you make the best possible decisions foryour personal or business pallet shipping requirements.
Sea Freight vs Air Freight - Cost
In the majority of circ*mstances, sea freight is andalways has been a cheaper option than air freight. Generally, sea freightcan be between 5 - 6 times cheaper than air, but this gap can extend evenfurther if you increase the weight of your cargo - by sea freight it'sunlikely the cost will increase, whereas importing heavier cargo via airfreight will be much more than 4 - 6 times the cost of sea freight.
For smaller shipments though, air freight can bebeneficial. If shipping 1-2 small pallets via sea freight, the cost iscalculated per cubic meter, so if your consignment is that small then airtransport may cost you less when you take into account all chargesassociated with sea freight. However, if shipping a small quantity ofsensitive and expensive items, the speed and security of air freight mightbe preferential for you.
Sea Freight vs Air Freight - Transit Times
In terms of speed and reliability, air freight is asuperior option. Shipments via sea freight can take several weeks, or evenup to two months or more given the current disruptions, whereas shipmentsvia air tend to be at the intended destination in a matter of days.
One of the main considerations here is what you willbe shipping. For high-value or perishable items, or medical products, airfreight has significant advantages because of high levels of security andexpress delivery options. There is an added advantage of being moretraceable too, as all flights are tracked, which gives businesses greatervisibility and peace of mind. This doesn't mean that sea freight is nottrackable, indeed, it is, however the details are far superior for airfreight.
If you are a small or medium-sized business, it'salso worth taking into account your business goals and what has broughtyou success to this point. If you have built a reputation amongst yourcustomers for speed and reliability of delivery, it may be worth takingthe short term hit in terms of air freight costs for the purposes ofcustomer retention and acquisition whilst other competitors may bestruggling to fulfil orders.
However, if you are shipping for personal reasons,such as sending goods to family or friends or moving abroad, timescaleswill be less important and cost effectiveness to the fore. In thisinstance, sea freight is likely to be a far better option for yourrequirements.
Documentation, Duty & Taxes
The requirements in terms of documentation for seafreight and air freight are largely similar. Both require a commercialinvoice containing HS/Commodity codes. If you are shipping personaleffects then you will need a proforma invoice and packing list, and threecopies of the invoice must be attached to the pallets on all occasions.Depending on the destination country and the nature of your goods, furtherspecific documentation may be required.
It is also worth bearing in mind that the list ofprohibited items is far more extensive for air freight than for seafreight. For example, no items containing batteries, no gasses, magneticsubstances, or anything flammable can be shipped via air freight. You canfind out more on this by visiting our section.
As far as Duties and Taxes are concerned the verysame percentages apply to both modes of transport, so the requirements arelargely similar. Duty is calculated at an allocated percentage based onthe nature of goods, so it will be the same regardless of what shippingmethod you choose. Tax is basically VAT in Europe or GST in the USA,Australia, etc and it would also remain the same for both modes. However,Tax applies on the value one the goods plus the shipping costs, so if theshipping costs are greater, the result will be a small increase in thevalue of Tax that needs to be paid.
One advantage of air freight is that with Pallet2Shipthis service operates as a door-to-door option - this means that all costsare included in the original quote. However, with sea freight the pricesare quoted for shipping to port only. When goods arrive at port there willbe a number of other charges before those goods can enter the country,including things like local port and handling fees, customs clearance, anddocumentation fees. All of these charges need to be paid before the goodscan make it into the country, where collection from port can then bearranged.
Environmental Impact
Climate change continues to be in sharp focus in thepublic and corporate consciousness, and it is not an issue that is goingaway any time soon. With everyone from international organisations toindividual people considering their impact on the environment morecarefully, SMEs are also taking more responsibility to work towards a moresustainable future.
If you are concerned about your carbon footprint whenit comes to shipping, sea freight is the option for you. Research has shown thataeroplanes emit around 500 grams of CO2 per metric ton of freight per kmof transportation, while ships only emit 10 to 40 grams of CO2 per km.
There are some concerns around the measurement inthis regard, as there are pollutants other than CO2, and jet fuel producesfewer of these as it burns much cleaner than lower grade fuels used onships. However, it is widely recognised that overall, sea freight isbetter for the environment than air freight.
Clearly there is much to consider when it comes toshipping via sea freightor air freight, but we hope that the advice in this article andprovided in our infographic is useful to you. If you feel you need furtheradvice for your shipping requirements then please consult our FAQs, or youcan contact our customer service team.
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