FBJ FREIGHT BUSINESS JOURNAL ISSUE 2 2011


Shipping and air services to and from Japan sprang back into shape remarkably quickly after the earthquake and tsunami on 11 March but the longer-term effects on supply chains will be more difficult to judge. The ripples through global manufacturing may be felt for many months to come, said business and logistics experts. George Dexter, CEO of UK-based Armour Group, which manufactures and distributes audio-visual products said: “People may say that everything is made in China, not Japan, these days but while it is true that relatively few finished products come from there, Japanese-made components are a big area of concern.” Chinese electronic manufacturers use large quantities of transistors and capacitors, many of which are mainly or exclusively made in Japan. Virtually all the mechanisms used in CD players, for instance, are of Japanese origin.


“There may not be an issue today, but I suspect there will be in around four months’ time, and there could be problems in the run- up to Christmas” Dexter continued. “We have


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Japan’s Great Earthquake: the reckoning is still to come


The world’s largest freighter aircraft – the Antonov An-225 – joined the international relief effort to Japan. The Paris office of charter broker Air Partner chartered the aircraft to carry 145 tonnes of urgent blankets, food, water, medicines and respirators from Chateauroux in France to Tokyo Narita Airport. The flight was organised by Antonov Airlines. And Lufthansa Cargo and the European Commission laid on an MD-11 freighter relief flight from Frankfurt to Tokyo on 23 March. It carried 70 tonnes of supplies.


already seen an increase in chipset prices and we don’t yet know the size of the problem.” Many of the Japanese-made components are extremely sophisticated and there are few alternative sources. Many assemblies would in any case need extensive redesign, testing and re-certification if alternative components were to be used.


At Electrocomponents, the world’s largest distributor of electronics and maintenance products, general manager of supply chain, Anne Bruggink, said that its office and warehouse in Yokohama were not directly affected and its global supply network allowed it draw upon stock from its 17 distribution locations across the world to make up for any shortfall in availability. She said: “Our carriers currently report no significant backlogs in despatching to and from Japan but there are obviously some issues in getting freight around the most affected parts of the country due to the current infrastructure problems there.” Bruggink


added: “Whilst the big components manufacturers are largely


located in the south of the country, many get parts from smaller manufacturers in the north and east which are heavily impacted, in some cases totally destroyed. Whilst short term output is protected by materials already in the supply chain, there is a general opinion that some shortages are likely to become apparent in the medium term.”


There are similar fears in many other industries, ranging from mobile phones and computer gaming through cars to earth- moving equipment manufacturers. Dexter added that information from Japanese manufacturers was still hard to come by, but one component maker that had been contacted said that they had no idea when they would be able to resume production. Factories have been stopped by power outages, and in some cases land links to ports and airports have been cut off. There have been reports of fuel shortages, which has made container movements inland to and from the ports difficult, and stocks of aviation fuel were also reported to be running low in late March.


Freight escapes worst of quake p.35


In this issue... NEWS


Libya turmoil


UK freight railway plan


Lines shun UK


EU white paper


Multimodal round-up


Portcentric logistics


Ireland Far East


Insurance


2 3 6 8


FEATURES 16 12


22 35 14


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