Let’s start with the numbers.
The Port of Los Angeles moves the most containers of any port in the world, carrying 182.8 million metric tons of freight. Nearby Los Angeles International Airport moved 2.1 million tons of cargo in 2016.
Maersk is the world’s largest shipping company, with more than 16 percent of market share, 15 percent of all sea freight capacity, and 652 ships.
FedEx operates the world’s largest air freight business, moving 15.8 billion metric ton-kilometers’ worth of cargo on 657 planes from more than 375 airports.
You’ll notice that the sea freight business is significantly larger than air freight. But why?
Today’s newest and largest cargo ships can carry a lot more stuff a lot more efficiently. The OOCL Hong Kong, currently the largest, has a capacity of more than 21,000 twenty-foot equivalent units (TEU). Ship sizes have increased dramatically in recent decades — back in 2003, OOCL’s newest and largest ship carried barely 8,000 TEUs, which was then the most in the world.
A freighter plane, by comparison, can only carry about 4 TEUs at once.
In addition to these economies of scale, ocean shipping is significantly better for the environment and a great deal more fuel efficient. Each metric ton shipped by cargo ship produces about 15 grams of CO2 — less than 3 percent of the 545 grams per metric ton created with air travel.
But perhaps most importantly, sea freight costs less: about $195 for what would cost $1,000 to ship by air. For global corporations shipping millions of goods around the world, small differences in marginal shipping cost can make a big difference to the bottom line.
For certain goods like smartphones, where the security of shipping is important and marginal costs are easily passed on to the consumer, air travel is the way to go. This is also true for items that need to move quickly, like perishable food, seasonal clothing, or holiday toys.
But most goods going most places are best shipped one way: on a boat.
