The challenges at the ports and with strained capacity on the road have many shippers seeking alternative solutions. And given that 57% of the respondents in the 7th annual State of the North American Supply Chain Survey experienced delays with their truckload moves in 2021, it makes sense to see a surge in interest for air and rail services.
Approximately 53% of our survey’s respondents said they plan to use or are interested in using air freight services this year. That number marked a 9 percentage point increase over the previous year. At the same time, shippers that showed an interest in using rail services in 2022 increased by 10 percentage points year-over-year to 36%.
In many cases, these rail and air options can be a suitable alternative to traditional over-the-road transportation. However, these services also have their drawbacks that shippers need to be aware of.
In terms of pricing, air freight services tend to cost more than standard trucking rates. In the past, shippers generally used air freight services as an expedited solution. The pandemic, however, forced many shippers to turn to the sky, especially on international moves when lead times from Asia to North America were considerably extended. As a result, pricing on air freight has seen significant increases in the past two years as capacity has been stretched thin.
At the same time, the rail industry has faced an uphill battle against various supply chain disruptions related to the pandemic. Because many of the containers that move by rail across long distances originate at ports, the intermodal segment of the supply chain has seen its fair share of congestion. As containers piled up along the West Coast, the congestion eventually made its way to inland rail hubs, such as Chicago.
Using air and rail solutions can be a great alternative that can deliver big benefits to shippers under more normal circumstances. Given today’s climate, shippers should work closely with their service providers to determine which lanes in the air or on the rail may benefit them.