Coty Cut Air Freight 48%: A Mode-Shift Control Plan for Ocean and Rail

Air freight is an excellent recovery tool and an expensive default. Coty's recent results show what becomes possible when a shipper treats mode selection as a controlled planning decision rather than a last-minute reaction.

Supply Chain Dive reports that the beauty company has reduced its reliance on air freight by 48% since 2019 while expanding its use of ocean and rail. That progress did not eliminate volatility: Coty's air-freight emissions increased 33% from fiscal 2025 to fiscal 2026 amid global disruptions. However, its mode-shift work helped the company avoid an estimated 3% year-over-year increase in air-freight volume.

The lesson is not that every shipment belongs on a vessel or train. It is that a shipper can reserve air capacity for the orders where speed protects more value than it costs. Achieving that balance requires four connected controls: shipment eligibility, scenario-based economics, routing-guide rules, and exception governance.

Start with SKU and order eligibility

A mode-shift program should begin below the lane level. Two products moving between the same origin and destination may have completely different time sensitivity, margin, shelf life, and stockout exposure.

Create an eligibility score for each SKU-lane combination using at least these factors:

• Demand variability and forecast confidence
• Product value, margin, and value density
• Shelf life, launch date, and obsolescence risk
• Available-to-promise inventory at destination
• Replenishment lead time and supplier reliability
• Customer service commitment and order priority
• Ocean or rail schedule frequency and reliability

Stable, high-volume replenishment with predictable demand is the strongest candidate for ocean or rail. New product launches, short-lived promotions, critical components, and orders already close to a service failure require tighter review. The score should classify freight as eligible, conditionally eligible, or air-only—not merely recommend the cheapest mode.

This approach also avoids a common analytical trap: judging modes only by average transit time. A 25-day ocean service with low variability can be easier to plan than a nominally faster service with wide, unpredictable swings.

Model the total tradeoff before changing the routing guide

Transportation savings alone do not prove that a mode shift creates value. The decision model should compare landed cost, working capital, service risk, and emissions across realistic scenarios.

For each option, calculate freight cost plus origin handling, destination handling, customs, insurance, drayage, storage, and expected disruption cost. Add pipeline inventory: daily cost of goods sold multiplied by the extra door-to-door transit days. Then quantify the expected cost of stockouts, lost sales, production downtime, markdowns, or contractual penalties.

The resulting comparison might show that ocean is cheaper for base demand while a planned rail option supports seasonal replenishment and air remains economical for a small emergency allocation. Inbound Logistics' guide to freight mode optimization makes the same practical point: the best answer is often a combination of modes that balances cost and transit time across different stages and requirements.

Emissions belong in this comparison as a measured operating variable. Coty uses EcoTransIT World to calculate greenhouse-gas emissions for managed transportation and identify targeted reduction opportunities. Whatever calculation method a shipper adopts, it should be consistent by lane, mode, weight, distance, and equipment type. That creates a defensible baseline and prevents sustainability claims from resting on generic averages.

Build inventory before moving freight

Moving from air to ocean or rail increases pipeline time. If planners change the transport mode without changing inventory policy, expedites will return as soon as demand deviates from plan.

Before activation, recalculate reorder points, safety stock, and order cycles. Separate the one-time inventory needed to bridge the longer initial transit from the ongoing inventory needed to absorb variability. A phased transition is safer than a full lane conversion: move 20% to 30% of eligible volume first, measure results over several cycles, and then expand.

Planners should monitor destination days of supply, forecast error, supplier on-time performance, port or terminal dwell, and end-to-end transit variability. If those measures deteriorate beyond agreed thresholds, the system should recommend a controlled response rather than wait for a stockout.

Reserve air freight through explicit exception rules

Air freight should require an exception reason, an owner, and an expiration date. Useful approved categories include critical production stoppage, confirmed stockout with material revenue at risk, regulatory or patient-safety requirement, launch commitment, and disruption recovery.

Weak explanations such as "urgent," "customer request," or "planner preference" should not pass automatically. The request should show the affected SKU, quantity, required delivery date, inventory position, value at risk, alternative-mode arrival dates, incremental freight cost, and estimated emissions impact.

Approval thresholds can rise with cost and frequency. A local planner might approve a limited recovery shipment, while recurring expedites or high-cost movements require a transportation or finance leader. Every approval should feed a cause code—forecast miss, late production, supplier delay, inventory error, or customer change—so teams can attack the process creating the expedite.

Manage the program with a mode-shift control tower

A transportation management system can connect planning assumptions to execution. The dashboard should track air share by weight, volume, spend, and shipment count; eligible volume shifted to ocean or rail; service performance by mode; avoided cost; inventory effects; emissions; and exception reasons.

Coty's results also show why percentage reduction alone is insufficient. Road transport represents 91% of its total shipped weight, according to Supply Chain Dive, so the next opportunity may sit outside the most visible mode. A control tower should therefore expose the whole transport portfolio and help teams decide whether better utilization, consolidation, rail, ocean, electric vehicles, or route redesign offers the next best gain.

The target is not zero air freight at any cost. It is zero unplanned air freight caused by preventable decisions. When mode eligibility, inventory policy, routing rules, and approvals operate from the same data, ocean and rail become dependable planning choices—and air returns to its proper role as a deliberate exception.

Ready to turn mode selection into a controlled, measurable workflow? Request a CXTMS demo to see how transportation planning, routing rules, and exception management can work together.