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Analysis: Tight Air Freight Threatening Auto Industry Supply

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Feb. 12, 2018—As auto industry suppliers operate within contracted timescales and shorter lead times, it’s a common practice to book air freight at the last minute—and the demand for air freight has reached new levels, according to Wards Auto.

Costs are at their highest point, and a capacity shortfall exists for popular long-haul, intercontinental routes. Europe to North America is one of the most severely affected routes, lately, which has the potential to threaten U.S. vehicle production if contingencies aren’t utilized to safeguard supply-chain operations. Businesses’ willingness to pay increasing premium rates for available space has also led to some standard air-cargo shipments being held back for several days.

Many manufacturers are scheduling a ramp-up in production ahead of new 2018 models, which only intensifies supply-chain pressure, noted. However, a willingness to work with dedicated multimodal emergency logistics partners can help provide solutions to potential supply-chain threats like air-cargo capacity shortfalls.

The article’s author, Brad Brennan, a managing director at supply-chain group company Evolution Time Critical, says it’s important to see the big picture when considering shipments and time frames—consideration of what actually needs to be where, when, and for whom. In an effort to bridge potential breaks in the supply chain, Brennan suggested co-loading with other charters, or breaking shipments into smaller loads that can be distributed across several airlines.

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