In just over a week the annual time-critical movement of consumer goods par excellence will be getting underway from the North Pole for the budget price of a glass of egg nog, or milk and cookies left by the chimney. But time-critical movements of automotive parts have also seen a resurgence since the third quarter as factors such as exceptionally low inventory levels and the recent growth in new vehicle models have combined with lower freight rates in an air charter business with capacity on its hands.
Last weekend provided a good example when Evolution Time Critical helped an automotive manufacturer based in Celaya, Mexico avoid production downtime by sourcing a courier for 40 boxes of urgently needed steel bearings from an established supplier in China, reportedly saving the manufacturer over $800,000.
Evolution worked with the supplier to ensure the export invoices and packing list was in place for clearance at Shanghai airport by 18:00 on Sunday for the flight via Germany, and provided close monitoring of the goods until they arrived at Mexico City airport on Monday evening this week.
Since August, as production lines have been kick-started with stimulus packages, there has been more evidence of time critical shipments like this one taking place in the automotive industry. Evolution Time Critical’s managing director Brad Brennan said the company has seen volumes up 53% between July and November based on last year’s figures and the company has also seen a significant rise in road-based priority shipments throughout Europe.
This goes for a number of other premium freight providers that have also reported increased air and road freight volumes including time:matters, Panalpina, Priority Freight and Ceva Logistics.
At time:matters, a Lufthansa subsidiary, CEO Franz-Joseph Miller said that European intra-day shipments in September were at double the levels seen in March, taking overall levels above pre-crisis levels.
According to Neal Williams, managing director of Priority Freight, the proportion of automotive business in the company's portfolio has rebounded to pre-crisis levels. Williams added that his company is "getting more requests to tender for annual contracts."
Meanwhile, Justin Bowman, group commercial director at Air Charter Service, said that September saw times when his company was making use of “everything available” to move parts for European automotive customers.
But the question is, how sustainable is this rise in time critical volumes and will it continue into 2010? Evolution’s Brennan expects this to be the case for the time being as long as lean inventory continues to define the supply chain and instability amongst tier suppliers persists.
“Many analysts say that automotive inventories will not return to ‘normal’ levels until 2012,” he told Automotive Logistics, “it is a question of confidence. So, against that background, the ultra-lean supply chain looks set to continue, with the availability of emergency solutions, such as ours, as the safety net. I would expect demand to continue.”
See the forthcoming issue of Automotive Logistics magazine for a more indepth look at premium freight.