'The bulk of our consumer's goods move ocean. So when you have the capacity situation that we have and demand that we're seeing in ocean, the ocean market is not having the containers in the right place, not being able to get loaded, not being able to get your containers, then all of those other industries shift over into air as well,' said Expeditors vice president Kelly Blacker.
'Your general goods, whatever it might be. Automotive, home goods, everything might shift over into air so we see that conversion. The challenge is very small amount of ocean has a big impact on air in terms of total capacity,' said Ms Blacker.
Ms Blacker declared that higher prices in ocean shipping were also helping make air a more doable option.
The average cost of air cargo in May was six times more expensive than seafreight, compared with 12 times more expensive before the Covid crisis.
Ocean rates from China to the US west coast in the first week of July were US$6,533 per FEU, a 151 per cent increase from a year ago. China to the US east coast prices was up 209 per cent at $10,30 per FEU.
'We're seeing some significant congestion in the US traditional gateway locations. There's just too much cargo. It starts with the airline ground handlers and trying to unload the aircraft and get that turned around and make it available for us,' said Ms Blacker.
'They can't handle it as well, they don't have the capacity, warehouse capacity to turn it quickly. Labour is also an issue. Equipment is also an issue in terms of forklifts and things like that to get the cargo mode. Then it compounds into the container freight station operations, same issue, lack of warehouse capacity and labour and just being able to do that throughput,' said Ms Blacker.
Its expected bellyhold capacity won't return to pre-pandemic levels until 2024, which means constrained cargo capacity until then.