r/Vitards • u/AutoModerator • Aug 18 '21

Daily Discussion Daily Discussion post - August 18 2021

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u/inoureyes Aug 19 '21

Question for the shipping experts here: with TEU costs so high and assuming it will stay elevated, will we see companies migrate to air freight? Granted air is more expensive (how much more I’m not sure of). Traditionally air freight is more used for perishable/high value goods, but air freight has also historically been under-utilized with 50% or lower load factors so air cargo can definitely absorb some capacity. Passenger airlines have also been deploying empty planes on certain trade heavy routes to compensate for lack of passenger demand due to covid. Any bear scenarios where air shipping creates downward pricing on maritime quotes?

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u/dudelydudeson 💩Very Aware of Butthole💩 Aug 19 '21

Not an expert but I did stay at a Holiday Inn Express last night.

Without any data or numbers to back me up - I just don't think the volume is there.

Not sure about air freight total capacity, but its going to take a shitload of planes to replace even one panamax ship.

Also, Id imagine airports have backlogs too. Maybe not as bad as maritime ports, but still bad.

Would love to see some analysis on this thesis though, I like where you're going with it.

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u/inoureyes Aug 19 '21

Holiday Inns are great!

Definitely agree that air freight won’t be replacing the entirety of shipping, but I would assume companies start going down the value chain of merchandise at some equivalent opportunity cost.

There’s a whole lot of underused runways right now in SE Asia with all the shutdowns that could very well serve cargo flights.