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Automotive shippers look to air cargo as supply chain breaks on virus fear

SINGAPORE's on-demand freight platform Cargobase claims a 40 per cent jump in expedited volumes since the coronavirus crisis began, reports London's Loadstar

18 March 2020 - 19:00

SINGAPORE's on-demand freight platform Cargobase claims a 40 per cent jump in expedited volumes since the coronavirus crisis began, reports London's Loadstar.

'About 60 per cent of the shippers using us are tier-1 or -2 suppliers to car manufacturers, who usually use the platform for 'expedites' or tool moves. Now, they use the platform to find solutions in order to avoid potential disruptions of their manufacturing process,' said the company.



Cargobase shipments to and from China have doubled, and there's also been a 'strong increase' between Europe and North America.



'Large part-manufacturers are trying to share inventory globally, but also source from alternative suppliers for parts,' said Cargobase CEO Wiebe Helder.



'From what we've heard, the situation is seriously going to affect manufacturers in the next few weeks, as they won't receive supplies that usually come in by ocean freight. That gap might deplete their inventory, leaving them no choice but look at airfreight alternatives,' he said.



In Italy, which entered a China-like lockdown, there has been no disruption to air cargo operations so far, according to forwarders, although many passenger flights have been cancelled.



The epicentre of the outbreak in Italy is the country's northern manufacturing heartland, where around half of all production is linked to the automotive industry.



Carmakers such as BMW, Daimler, Fiat, Peugeot and Volkswagen have reportedly been able to keep assembly lines moving, using air cargo in some cases for shipments normally reserved for sea or road freight.



Despite passenger flight cancellations worldwide, Cargobase saw a 55 per cent increase in February bookings for onboard couriers, compared with January. It said the service allowed commercial shipments to be transported via carry-on or check-in baggage, therefore bypassing airport loading and collection times while remaining compliant with customs regulations.



'An onboard courier service is often used out of China to expedite exports, as the time to request for permits to organise air charters can take over a week,' the company explained.



Global air freight rates have spiked due to the reduction in bellyhold capacity - Loadstar has reported that ad hoc rates are expected to reach US$10 per kilogramme.


WORLD SHIPPING

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