What are the emissions and cost by mode of transportation?
Currently (May 2022), high supply chain costs are a major burden for most companies across various industries. In 2019, a 20-foot container (TEU: Twenty-foot Equivalent Unit) by sea freight from Shanghai to Seattle cost $1,400. Today it is $17,000.
Meanwhile, air freight is much more expensive: $142,000 for the same load. Air freight is not only more expensive, but also more detrimental, as it produces around 90 times more emissions per ton kilometer than sea freight.
Why are shipping costs so high currently?
The global shipping index peaked at over $10,000 in September 2021, an 8-fold increase from 2 years earlier. There are several reasons for this surge:
- Continued high demand as pandemic measures in some countries subside and consumption normalizes.
- Rising energy prices due to increased consumption and travel, and a changing global climate that requires more energy.
- During the COVID-19 pandemic, the shipping industry faced port closures and congestion, labor shortages, and a lack of new shipping containers.
Approximately 50% of all air freight is unplanned. Today, more than ever, advanced planning and supply chain management are critical to minimize the high costs and carbon emissions of air freight.
