The continuing frailty of maritime container spot freight rates could spur a new era of modal shift from air to ocean, Drewry Supply Chain Advisors warned today as the pricing gap between the two modes reached record level.

In recent weeks, container freight rates, particularly on the main east-west trades between Asia and Europe and the transpacific, hit some of the lowest levels ever seen, caused by a combination of unexpectedly low demand and overcapacity.

At the same time, while air freight volumes have also stagnated, the pre-Christmas peak season remains in full swing for air cargo operators and Drewry’s east-west air freight index in October rose for the fourth consecutive month.

As a result, the traditional multiplier that air freight is 11 times more expensive than sea freight has dramatically increased recently, and last month stood at 22.3 times, the highest multiple recorded by Drewry since it began covering air freight rates in May 2012.

The multiplier stood at 11.8 times in January, and rose continually month on month – bar a slight decline in August – through to October.

“The longer the multiplier remains above the historical average the greater the chance there will be acceleration to the ongoing modal shift of certain transferrable commodities from air to ocean,” Drewry said.

“The shift towards the much cheaper ocean freight mode has gathered momentum in recent years as shippers have developed more sophisticated IT systems, leaner inventory strategies and greater faith in container service reliability.”

The widening gap is almost entirely explained by the weakness in the ocean freight markets. In October last year, Drewry’s east-west air freight index stood at $3.75 per kg, compared with $3.31 per kg last month, a year-on-year decline of nearly 12%

In contrast, air freight was 16.5 times more expensive than ocean in October 2014, while last month it was 22.3 times more costly – indicating that the widening gap between the two is entirely driven by the sharp decline in sea fright pricing.