Use of sea freight will increase and air freight will decline, says Ericsson logistics chief

Robert Mellin, head of supply and logistics at Swedish telecoms manufacturer Ericsson, has commented that surface transportation will take precedence over air cargo in the future. Speaking at the TIACA Executive Summit earlier this month, the logistics chief commented that he aims for 80% of Ericsson's products to be transported by surface freight, compared to 20% a decade ago.

For Mellin, the volcanic ash cloud of 2010 was a watershed: faced with the necessity of finding alternative means of transportation in light of flight disruptions, the company discovered the flexibility and cost effectiveness of going 'below the cloud' and moving towards surface transport. "Surface transportation is [...] more reliable," said Mellin; "boats are arriving on time. Combined with greater supply chain visibility, better transport management systems and track and trace, we know when the boat will arrive late and we can mitigate that."

It's not only about the benefits of sea freight though; the increasing sophistication of Ericsson's supply chain is vital to its ability to move away from air freight and towards the sea. Mellin explained, "We now have warehouses all over the world and buy hardware closer to our customers, so we need to transport products less distance." On top of this, it seems surcharges and the slow adoption of e-freight is irksome to business. Mellin stated, "We have a budget, a plan, a margin and we have told the customer how much we are going to spend, You cannot just increase the costs [with surcharges]. It is not professional."

Mellin's comments were delivered before the most prominent air cargo professionals and were no doubt provocative. While even Mellin admitted that air freight will always remain a valuable component of Ericsson's supply chain, his address does seem to indicate that changes are afoot in the balance between air and surface freight.

Source: Air Cargo Week