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Maritime freight is today an essential mode of transport for international trade flows. Traded goods represented 2,605 million tonnes in 1970, and reached 11,076 million tonnes in 2019, i.e. a volume multiplied by 4.
The impact of the Covid-19 pandemic was less significant than expected. Maritime trade contracted by only 3.8% in 2020, and rebounded by 4.3% from 2021. According to UNCTAD, it should continue to grow at an annual rate of 2.4% between 2022 and 2026.
What are the main characteristics of international sea freight today? The detailed point with XP LOG.
Sea freight definition: what exactly is it?
Sea freight is a mode of commercial transport consisting of transporting goods by ship. It is traditionally distinguished from road, rail and air freight. Maritime freight uses trade routes crisscrossing all the water bodies of the globe: seas, oceans but also rivers, canals and large lakes...
For example, France is rich in its major seaports, also called industrial-port zones, but also in a navigable river network 4,773 kilometers long. This mode of transport is now the most widely used type of freight in terms of volumes traded.
The advantages of sea freight
An economical mode of transport
Sea freight prices are subject to strong variations, which can be explained by fluctuations in global economic activity. On average, however, they are lower than the fares of other modes of transport. Before the health crisis, the cost of rail transport between Europe and Asia was, for example, three times higher than that of maritime transport for an equivalent volume of goods. Air freight, on the other hand, is notoriously the most expensive and proves unprofitable for the majority of goods.
Securing of goods
Goods are traditionally packaged in shipping containers. However, other formats, standardized and easy to handle, can be considered depending on the type of product: bags, boxes, boxes, pallets, drums, etc.
The different types of freight vessels adapt to most goods and can even ensure complete transit by keeping the cargo at controlled temperature.
A particularly practical mode of freight
Transport over very long distances can be ensured from door to door, without multiple unloadings and without reloading. In addition, many international ports have quality port services ensuring efficient trade in goods and port handling.
Strong adaptability
Different types of ships easily adapt to different types of cargo. Sea freight is thus becoming a mode of transport suitable for almost all goods traded on the international market. The main categories of carriers include:
- Container ships, typically with a capacity of between 500 and 3,000 containers per trip;
- Ro-Ro ships also called "RO-RO", suitable for different types of rolling and towed freight such as cars, buses and trucks;
- Mixed vessels or "CON-RO", transporting both containers and rolling freight;
- Bulk carriers, specially equipped for the transport of bulk materials such as ores or cereals;
- Refrigerated vessels, essential for the transport of certain foodstuffs and perishables in compliance with the cold chain;
- Oil tankers for crude oil and refined products, classified by capacity (from 80,000 to 120,000 tonnes for the Aframax, up to 200,000 tonnes for the Suezmax, up to 300,000 tonnes for the VLCC or very large crude carriers);
- LNG carriers for all gases in their natural or liquid state, including butane, methane and liquefied natural gas;
- Chemical tankers suitable for the freight of chemical and dangerous products, but also, for example, alcoholic beverages such as wine.
Recognized reliability
Sea freight offers significant guarantees in terms of regularity and safety. There are two types of markets for ocean freight:
- “Tramping” consists of chartering a ship at the request of the customer and for a determined period;
- Regular lines offer fixed-day ship departures, with reservations open to all importing and exporting customers.
The rate of compliance with delivery deadlines and conditions reached an average of 70% for maritime freight during the period between 2018 and 2020. The health crisis then disrupted the sector for a long time, with a situation in the process of normalization: the reliability of ships increased by 3.6% between 2021 and 2022, to reach 40%.
An environmentally friendly mode of freight
It is estimated that sea freight, for an equivalent volume of goods, generates 5 times less CO2 than road transport and 13 times less than air transport. The International Maritime Organization (IMO) launched a strategy to reduce greenhouse gas emissions from maritime freight in 2018. The objective is to achieve an overall reduction of 40% by 2030 (compared to 2008) and 50% by 2050.
Sea freight prices
After high inflation due to the Covid-19 crisis, maritime freight prices are returning to a much more affordable level. The average price for a 40ft container was around $2,500 in December 2022 according to the Freightos Baltic Index. It was still $11,000 in September 2021. This average reduction in rates is due in particular to the relative slowdown in global economic activity observed at the end of the year.
The decline in global demand for maritime transport directly benefits importers and exporters who are still active. The cost of sea freight may continue to decrease in the near future if the trend does not change. As a reminder, the cost of the container was still only $1,500 in June 2020.
Key figures for international and French sea freight
According to TLF (Transport and logistics of France), approximately 80% of goods traded worldwide transit at least partially by sea. Containers represent, by far, the largest share of maritime cargo freight with 90% of the total volume. France itself relies heavily on its seaports and river network: 72% of goods imported into the country arrive by ship or barge.
The increase in maritime traffic to or from France is part of a long trend: 55 million tonnes of containers passed through French ports in 2017, compared to only 24 million tonnes 20 years earlier. About 90,000 sea freight vessels are currently active worldwide.
Conclusion
Sea freight is at the heart of long-distance international trade. In each port area, it must rely on high-level port logistics to ensure the delivery of goods in accordance with deadlines and specifications. XP LOG, an international logistics provider, has been supporting its importing and exporting customers for more than 20 years in the industrial-port area of Le Havre. Do not hesitate to contact us for any additional information.