Transatlantic airfreight shortfall threatens vehicle production
The seasonal peak in demand for air cargo space has far exceeded traditional levels, increasing the shortfall of air freight capacity and inflating prices. Prominent long haul intercontinental routes are among those most severely affected, which has led to major automotive component suppliers experiencing increasing booking difficulty as available global capacity tightens. Europe to North America has been heavily impacted and offers potential ramifications for US vehicle production, with capacity and cost issues also hitting routes from Asia to Europe and North America. Spiralling global e-commerce has been partially blamed for contributing to this emerging concern.
“Air freight prices have more than doubled in the past two months, just as vehicle manufacturers are ramping up for 2018 models,” says Brad Brennan, managing director of emergency logistics specialist Evolution Time Critical. “The shortfall in air freight capacity from Europe into North America, in particular, could have connotations for ongoing vehicle production without steadfast contingencies. It is an established practice for many suppliers to book airfreight at the last minute as demand dictates, but many of these companies are finding inadequate capacity.”
The International Air Transport Association (IATA) says that demand for air cargo grew in 5 of the last six months and although air cargo capacity is increasing, it is increasing at a much slower rate than is required.
“Working with a dedicated emergency logistics partner can help find alternative solutions and routes to avoid unscheduled production downtime,” explains Brennan. “This year we opened Evolution Time Critical’s first North America-based control centre in Atlanta, GA, as a response to demand for our expertise from manufacturers and suppliers operating in the country. Supported by our global expertise, established for over a decade from several European locations, we can provide the knowledge, contacts and fleet-footed capability to maintain production in the face of potentially fractious supply chain links. “For example, for each individual case, our tenacious and lateral-thinking teams are working hard to identify, plan and deliver optimal solutions that utilise the added agility enabled by emergency logistics,” explains Brennan. “Examples include co-loading with other charters, breaking shipments into smaller loads that can be distributed across several airlines, and even flying to airports that would not normally be considered due to the extensive trucking time. The need to explore all options for staged delivery due to the variety of challenges posed, has called upon our extensive knowledge of automotive manufacturing and global freight routes.”
A recent project demonstrates the size, breadth and agile nature of potential solutions. In the last month, the company’s recently-launched Critical Projects service has aided a customer with the relocation of production lines from Europe to Mexico, which included substantial tooling relocation. “We have also moved large amounts of finished materials from Europe to North America,” concludes Brennan. “Space has been tight, so we have had to use dedicated air charter and a variety of airlines to ensure that our customers can maintain production. We have also experienced a growing demand for our on-board courier services, including our innovative Virtual On-Board Courier, which is ideal for smaller parts or high value materials.”