Subscribe to our free, weekly email newsletter!


More complications for Japan’s shippers

U.S. multinationals were shifting some critical cargoes from ocean to air carriage a few days ago, but that strategy may become complicated due to a shortage of fuel
By Patrick Burnson, Executive Editor
March 18, 2011

Japan’s supply chain continues to be disrupted by the ongoing consequences of last week’s earthquake and tsumami.

Maersk Line and other global vessel operators are avoiding some Japanese ports to mitigate the risk of contamination from damaged nuclear reactors.  U.S. multinationals were shifting some critical cargoes from ocean to air carriage a few days ago, but that strategy may become complicated due to a shortage of fuel.

“We use a combination of both air and ocean to transport parts from Japan,” said Larry Wilson, a spokesman for Boeing’s supplier management division. “We have not made any changes in shipping, and are continuing to monitor the situation.”

Brandon Fried, executive director of the Air Forwarders Association, told LM that air carriers are flying into Japan fully fueled, but must stop at Honolulu or Anchorage before arriving at the U.S. mainland.


“That, of course, displaces the cargo payload substantially,” he said.


Japan produces 3-4 percent of the global jet fuel supply, some of which is exported to Asia. Some of this refinery capacity has been lost due to damages caused by the earthquake. This supply restriction could lead to higher jet fuel prices. Meanwhile, The International Air Transport Association (IATA) has mobilized its resources to support the aviation industry in several critical areas including procurement of fuel.

“Some key fuel infrastructure facilities in Japan have been damaged,” said IATA spokesmen. “Most Japanese airports have fuel supplies for the next 10 days. IATA is coordinating actions among airlines to maximize existing fuel supplies, including voluntary tankering of jet fuel.”

IATA is also briefing airlines and officials on industry agreed rationing regimes should supply shortages arise.

“It is too early to assess the long-term impact of the Japanese tragedy on the global air transport industry,” said Giovanni Bisignani, IATA’s Director General and CEO. “However, understanding the structure of the Japanese air transport industry does give insight on the potential short-term impact of a major slowdown in Japanese air travel.”

For related stories click here.

About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

NRF's Jonathan Gold explains that the past year was replete with disruptions, slowdowns and partial shutdown, which can no longer be the norm, saying ports and dockworkers must adapt to ensure they provide shippers with the predictability and stability they need.

Last month, I gave a presentation to a group of senior transportation and supply chain executives. It was entitled “Predictable Surprises,” because it addressed how transportation and supply chain professionals can eliminate unpleasant surprises by looking at and evaluating issues in the transportation industry, and projecting how those issues will affect their companies.

The Port of Los Angeles (POLA) and the Port of Long Beach (POLB) said this week that they have formally established working groups, which they said will aim to seek new supply chain efficiencies, and focus on various aspects of port operations, including peak operations and terminal optimization in an effort to augment the San Pedro Bay port complex.

A month ago, the Shippers Conditions Index (SCI) from freight transportation consultancy FTR indicated that shippers might be traveling on a rocky road in the coming months. And one month later it appears those concerns appear to have been confirmed.

The American Association of Port Authorities (AAPA) had nothing but praise for the Senate passage over the past weekend of the Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (TPA-2015).

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA