Honda, Toyota and Nissan turn to air freight as supply chain impacted
By Dan Boaz
As the West Coast port issues continue few industry sectors are finding the impact to business quite as pronounced as the big three Japanese automakers. The port delays are gnawing away at the economy in general with it estimated that in total the commercial freight traveling through these ports accounts for a staggering 12.5 percent of the nation's GDP. Numbers like that make you sit up and take notice and it's no wonder that air freight and air charter services are a growing option for many. For some automakers so reliant on imports from Asia the obstacles increase on a day-to-day basis.
For Honda things are reaching a crisis point in terms of them being able to keep their North American production on schedule as the delays continue to mount, while Nissan and Toyota are also impacted. Gaps in their respective supply chains are becoming more pronounced as the months roll by and the lack of parts means that vehicle manufacturing through to completion is now becoming a real issue to be faced.
Honda have been using air freight services in recent months to try and fill the needs for parts by this week announced that four plants in the US and Canada will need to reduce vehicle output by some 20,000 units and further scale-backs appear inevitable if the situation does not change very soon.
Nissan too have resorted to air cargo as a viable alternate means of acquiring needed parts but it appears that both they Toyota source a higher ratio of their necessary parts from North American suppliers resulting in the total impact to business not being quite as severe to date.
Pressure continues to grow on both sides in the continued dispute as the losses to the economy escalate daily. While air freight is providing some measure of relief to manufacturers it is apparent that until the port situation is fully resolved these problems will only mount. For the production schedules of the largest Japanese automakers, 2015 could rapidly become a disaster in the North American market if resolution is too far down the line.
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