Mode shift in perishables To take Capsicum as a specific example, the chart below shows how the volumes have grown for air and ocean: Capsicum volumes transported by air cargo have contracted slightly over the past decade, while all of the trade growth has been captured by ocean freight. As part of a mode shift study recently executed in partnership with International Air Transport Association (IATA), Seabury interviewed a number of shippers and freight forwarders for their perspective on future trends. Going forward, shippers and forwarders alike expect a continued shift from air to ocean to occur, but unequally for different commodities. Automotive and electronics are expected to be most impacted by continued mode shift, while pharmaceuticals and perishables are thought to have already completed their shift to ocean. However, new technology in controlled atmosphere containers, such as MCI’s Star Cool containers, has the potential to further disrupt the balance between air and ocean cargo. The technology’s ability to slow down the ripening process potentially opens up ocean transport as a viable alternative to air cargo on some of the longer trade routes. Whereas previously some fresh foods could only be transported in containers for short or medium-length voyages, controlled atmosphere containers remove this limitation. Even on some trade routes that are already within range for regular reefer containers, controlled atmosphere technology could still improve the status quo by extending shelf life. The example in the chart below shows the current share of containerised ocean trade relative to total trade, for papayas, by trade lane. It is apparent that while volumes have already shifted to ocean on the shorter trade lanes (represented by high ocean share on the shorter trade lanes), it has yet to happen on some of the longer trade lanes. As controlled atmosphere containers become more common, we may expect volumes on these longer trade lanes to start shifting from air to ocean as well. May 2014 4
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