Inventory how-to

How to choose between air and ocean freight

Pick ocean freight when you have long, predictable lead time and want the lowest cost per unit.

Short answer: Pick ocean freight when you have long, predictable lead time and want the lowest cost per unit. Pick air freight when you are close to a stockout, need a small batch fast, or the unit value is high enough that the extra freight cost does not wreck your margin. Most stores use ocean as the default and air only to patch gaps.

Start with what you are protecting

The real question is not "which is cheaper" but "what does a stockout cost you versus what does faster shipping cost you." If a SKU sells steadily and you reorder with enough lead time, ocean freight is almost always the right default. If you misjudged demand, a supplier slipped, or a product is trending and you are about to run out, air freight can save the sale even though it costs more per unit.

Think of it as two separate budgets: a shipping cost budget and a stockout risk budget. Ocean freight spends more time but less money. Air freight spends more money but buys you time back.

Compare landed cost per unit, not just the freight quote

A low freight rate on ocean can look attractive until you add the extra weeks of warehousing, the capital tied up in a bigger order, and the risk of forecast error over a longer horizon. Air freight costs more per kilo but the order is usually smaller and arrives sooner, so you carry less inventory risk. Work out approximate cost per unit landed for both options, including duty, before deciding. SteadyShelf does not calculate landed cost, so run this comparison yourself in a spreadsheet using your supplier's freight quotes.

Use lead time and safety days to decide, not habit

If your reorder point math shows you are already past the point where ocean freight gets stock to you before you run out, that is your trigger to consider air for that one order. Keep ocean as the lead time you plan around normally, and treat air as an exception path for emergencies, not a routine choice. Mixing both regularly on the same SKU makes your lead time assumptions unreliable, so flag in your own notes when you've used air so you don't accidentally treat it as the new normal lead time.

Watch order size and case packs

Ocean shipments are usually sized to fill a container or pallet efficiently, which pushes you toward larger order quantities and case pack minimums. Air shipments are often smaller and more flexible, useful when you only need to cover a short gap until the next ocean shipment lands. When you are choosing between the two, check whether the quantity you actually need lines up better with one mode's typical minimums.

Step by step

  1. List the SKU's current days of stock and compare it to ocean lead time plus safety days.
  2. If ocean lead time plus safety days is longer than your days of stock, you have a gap to cover.
  3. Get a quote for air freight on just enough units to bridge that gap until the next ocean order arrives.
  4. Calculate landed cost per unit for both the air top-up and a normal ocean order.
  5. Check if the gap-filling quantity meets the supplier's minimum for air shipment.
  6. Decide based on whether the margin on the air-freighted units still covers your costs after the higher freight charge.
  7. Note in your own records that this batch used a different lead time so you don't mix it into future forecasts by mistake.

Worked example

A store sells a SKU at 10 units a day. Ocean lead time is 45 days and safety days are 7, so the ocean reorder point is 10 x (45+7) = 520 units on hand. The store only has 150 units on hand and 0 on order, so it is already short. Air freight lead time is 10 days, so to cover 10 days plus 7 safety days the store needs 10 x (10+7) = 170 units, minus the 150 on hand, meaning an order of 20 units by air to bridge the gap. Meanwhile a full ocean order is placed as normal to restock for the following months.

How SteadyShelf helps

SteadyShelf gives you the order-by date and suggested quantity based on each supplier's lead time and safety days, which tells you when you are cutting it close enough to need a faster shipping mode. It does not calculate landed cost or compare freight modes for you, so the air versus ocean cost comparison and the decision itself are manual.

$29/month flat, unlimited products and suppliers, 30-day free trial. Run the numbers now with the free reorder point calculator.

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FAQ

Can SteadyShelf automatically switch a SKU to a faster supplier or shipping method when it detects a risk of stockout?

No. SteadyShelf will show you the order-by date getting close or passing based on the lead time you've set for that supplier, which is your signal to consider air freight or another faster option. Switching the shipping method, getting the quote, and placing that order is done by you outside the app.

Should I set up two different suppliers in SteadyShelf for the same product, one for ocean and one for air?

You can set up a supplier record with the lead time that reflects your normal ocean shipping method, since that is what you will use most often. If you occasionally need air freight as an emergency fix, handle that order manually outside the regular reorder flow so it does not distort the lead time assumptions SteadyShelf uses for future forecasts.

Let SteadyShelf do this math for every SKU

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