The seasonal increase in demand for air freight has reached new levels.
Costs are at their highest point and a capacity shortfall exists for prominent long-haul intercontinental routes. Along with Asia to Europe and North America, Europe to North America is one of the most severely affected routes, which has the potential to threaten U.S. vehicle production if suitable contingencies are not implemented to safeguard supply-chain operations. Companies’ willingness to pay sharply rising premium rates for available space also has seen some standard air-cargo shipments being held back for several days.
Many major manufacturers are scheduling a ramp-up in production ahead of new ʼ18 models, which intensifies supply-chain pressure. As auto-industry suppliers operate within significantly contracted timescales – resulting in the need for increased agility and often with shorter lead times – it is common practice to book air freight at the last minute. The essence of emergency logistics expertise is the ability to make time – or space – when traditional logisticians can find none. Modern automotive technologies are evolving quickly, but OEMs’ use of logistics as a way of safeguarding production currently is just as innovative. A willingness to work with a dedicated multimodal emergency logistics partner helps prepare fleet-footed response to potential supply-chain threats, such as the sudden air-cargo capacity shortfall.
A number of contingencies have proved vital during this latest concern, and have been tailored to provide an optimal solution depending on the individual needs of each client. It is crucial to see the bigger picture when considering shipments, available space and time frames; consideration of what actually needs to be where, when and for whom, rather than just looking at initial inventories, can provide a crucial advantage.
Co-loading with other charters, breaking shipments into smaller loads that can be distributed across several airlines and rerouting to alternative airports that not normally are considered due to location, cost or trucking time all can help bridge potential breaks in the supply chain. As well as maintaining short-term production, such measures also buy automakers and their suppliers extra time to continue original, or additional, shipments by alternatively less time-sensitive means, such as sea freight.
Without extensive knowledge of automotive manufacturing and global freight routes, an issue such as air-cargo capacity shortfall can cause problems affecting all companies shipping from a certain region, resulting in a bottleneck of delayed shipments.
Unforeseen supply-chain turbulence need not result in shipment delays and unscheduled production stoppages, nor does it mean no alternatives exist, however. You just need to know to look in the right places.
Brad Brennan is managing director of Evolution Time Critical, a Metro Supply Chain Group Company that specializes in the provision of emergency logistics expertise to the global automotive industry.