Of the new stations that Lufthansa added to its network in the Americas in March, Achim Martinka is most upbeat about Panama, which the German airline now serves three times a week from Frankfurt. The carrier’s vice president of cargo for the Americas sees promising opportunities in Panama, pointing to a large and growing free trade zone and a steady rise in regional flights that promises interline opportunities for LH Cargo.
Robert Villamizar, head of air product capacity, intra-Americas at DHL Global Forwarding (DGF), is more upbeat on the growing role of Panama as a transit point for cargo moving between Asia and Latin America. The express arm of DHL runs a regional hub operation at Panama, which gives the forwarding unit lift to a host of markets in Central and South America. Air cargo from Asia to the region is mostly routed over Los Angeles and Miami, but Panama is readily accessible by ocean vessel from Asia, which has opened the opportunity for a mixed modal routing.
“DHL Global Forwarding has been able to enhance solutions for customers using sea-air. Goods are shipped by ocean carrier to Panama, then by air to markets like Colombia, Chile and Peru. This is a growing sector,” he said.
Interest in sea-air traffic appears to be on the rise. CEVA Logistics has been approached by some customers enquiring about sea-air solutions, reported Rich Zablocki, vice president, global product development, North America.
The decline of air freight rates has undermined the case for sea-air to some extent, but it remains a solution for shippers who find that neither ocean nor air cargo offerings match their needs. According to DGF, sea-air is on average 30-50% faster than going by ocean and 30-50% cheaper than pure airfreight. It offers confirmed bookings with scheduled departures, control over the shipment from country of origin to final destination and carrier liability insurance for the complete transportation chain. In addition, the use of a single combined transport document helps track the cargo from end to end, the company stresses.
On the other hand, adding a transit and change of mode adds complexity to the move and increases the risk of disruption, noted Bob Imbriani, vice president, international at forwarder Team Worldwide.
This complexity extends to the pricing, he cautions. “Shippers should look at the total cost,” he advised. “Combining two modes brings in different charges.”
Security can also be a stumbling block, he added. If a US point is used for the transfer, the cargo will have to move on freighter aircraft, as the shippers at the origin of the goods are not considered known shippers by US authorities, and there is no chain of custody to match the requirements in US security regulations for air cargo, he said.
Team is not bullish on the concept. “Sea-air has been in place a long time. It is something that comes up once in a while. it has some limited function and appeal,” Imbriani said, adding that he has not come across many forwarders that are looking to develop sea-air offerings.
Some sectors are more prone to embrace the concept, such as the garment sector. Villamizar noted that some electronics manufacturers and shippers of consumer products have been using sea-air.
He is upbeat about the concept in Panama, calling it “a success story” for his company.
There are predictions that sea-air volumes through Panama stand to receive a significant boost this summer, when the expansion of the Panama Canal is completed. The expansion is slated to be finished in June, with the official opening scheduled for June 26.
Jeremy Metz, general manager, carrier development at DHL Supply Chain, expects to see a boost in activity in the wake of the canal’s expansion. For their part, authorities have striven to make it easy for foreign companies to set up shop, he noted.
“They’ve got the largest FTZ in South America there,” he added.
By Ian Putzger
Air Freight Correspondent | Toronto
