According to The Colography Group's projections, the total value of cargo moving by vessel or across borders by truck will grow 13.7% over 2005 forecasts. In addition, the value of each pound of "surface" cargo is projected to rise by 4.5% next year.
The total value of air shipped goods is projected to rise by 8.9% in 2006, still a healthy gain. But the value of each pound of international airfreight will increase by only 0.4% year-over-year, suggesting a growing percentage of lower-valued commodities will enter the airborne mix.
As a percent of worldwide value, the value of surface-shipped goods continues to grow at the expense of air. Goods moving by surface transport will account for 65.4% of total cargo value in 2006, up from 59% in 1999. By contrast, air's share peaked in 1999 at 41.1% and is projected to drop to 34.6% by 2006.
The Colography Group projects the value of the global cargo market'excluding all domestic goods and all goods moving via transborder rail and/or pipeline'will reach $10.2 trillion in 2006.
Continuing another recent trend, global surface tonnage will expand at a faster rate than air tonnage. Surface tonnage is projected to increase by 8.7%, compared to an 8.5% rise in air tonnage. Across all modes 14.3 trillion pounds will be shipped in international services next year, a projected 8.7% gain over 2005 estimates.
"Transportation remains a volumetric exercise, so naturally more attention is paid to tonnage trends. Still, the extraordinary pace of growth in cargo value moving by ship and truck demands we explore this issue because of the impact we expect it to have on overall shipping activity," said Ted Scherck, President, The Colography Group, Inc.
Scherck cited several factors, most prominently the rise in global demand for and prices of petroleum products, most of which moves aboard ships and on trucks.
"Value growth, especially in the maritime sector, is influenced by the fact that more barrels of oil are moving at higher prices than ever before," said Scherck. "In addition, the rapid price escalation for refined products such as jet fuel has an adverse impact on demand for air transport, which is already priced at a premium to competing modes. As a consequence, shippers and consignees may find it more cost-effective to configure their supply chains to increase the use of more economical surface transport services."
Scherck added that the gains in surface value might also be driven by service improvements among vessel and truck operators.
"Over time, steamship and trucking operations have become more reliable and expedited in delivery times," he said. For many companies capable of migrating to surface from air, modal conversion is becoming an increasingly viable option. Indeed, if fuel prices remain at their current levels, modal conversion may become a competitive imperative for shippers and goods at the margin of the cost/value proposition."
Among the findings in The Colography Group's Global Expedited Cargo Market Projections For 2006, which is now available on a subscription basis:
- Despite comparative market share erosion, the value of airfreighted goods (excluding domestic services) will rise by nearly $290 billion in 2006. "Demand for airfreight services will remain robust, and it will play an integral role in maintaining a positive environment for global trade next year," Scherck said.
- Western Europe will lead the nine "Colography World Areas" in transborder air export activity, accounting for 48.1% of all tonnage and 52.1% of all value.
- An estimated 99.46% of all global transborder tonnage will move by surface transportation in 2006, virtually flat over 2005. Air weight as a percent of total transborder glo
