Ocean freight set to expand

New research indicates that freight transportation by ship is set to expand through the end of 2012 and further into the future. This marks a switch from air shipping to marine transport, and could reflect the desire of businesses to implement better spend management techniques in an effort to lower expenses.

Increasing ocean freight
According to a research conducted by consulting firm Lucintel, companies are expected to increase their demand for ocean shipping services in the near future, and the international marine trade industry is expected to more than double within the next 20 years. This spike takes into account a growing United States economy and increasing shipments worldwide.

This increase in ocean shipping could be partially a result of the decreasing amount of cargo being transported by air. Survey data from investment firm Stifel, Nicolaus & Co. and research enterprise Transport Intelligence revealed corporations are attempting to drive down their logistical expenses by choosing less costly shipping methods such as marine freight. Companies were more confident about the future of ocean freight than air transport in November.

Besides business cost reduction concerns, companies have other reasons for choosing marine freight, according to Lucintel's report. Terrorism and the hijacking of cargo planes is one concern leading businesses to opt for slower ocean shipping methods, and another is environmental concerns. With more companies voicing support for sustainable technology and business practices, more are choosing company policies that are more green than those of the past.

Making changes to accommodate more ocean freight
Businesses that decide to increase their ocean shipping may need to make changes to their supply chains in order to make this switch possible. If a manufacturing facility or raw material supplier is not near a large port, it may be necessary for a company to find a new supplier or manufacturer to ensure products get on a cargo ship and to market as quickly as possible.

When dealing with ocean freight, shipping time is already much longer than air transport, meaning it is essential for businesses to ensure there are no holdups that could push back anticipated arrival time even further. This makes it important for a supply chain to function smoothly and be able to handle the time delays brought on by using ships to transport cargo rather than planes.