Airlift saves Ford Australia from premature shutdown

A last minute air shipment of sheet metal, glass, and steering components saved Ford Australia from closing its factories as the Hanjin Milano freighter waited offshore with Ford’s cargo, to avoid creditors, snarling the car manufacturer’s supply chain.

News of the modal shift to air freight is noteworthy in part because of the lack of similar stories. Unlike the longshoreman’s strike at US ports in 2015 that saw a surge in demand for air cargo, the Hanjin bankruptcy has failed to trigger any meaningful surge this time around.

“Some leading electronics customers face serious challenges to get time-critical supplies to Europe,” a DB Schenker spokesman told Lloyd’s Loading List in late September. However, the representative noted that customers were “asking for rail as a substitution for ocean to avoid air shipments.”

Instead, the bankruptcy pushed up spot rates on ocean freight, with rates rising by $183 to $702 per twenty-foot-equivalent units in the weeks following the declaration of bankruptcy.

In mid-September, the number of spot market truck loads posted in the Los Angeles area were twice their seasonal average, driving up spot truckload rates, according to load board operator DAT Solutions. Concurrently, outbound truckloads jumped after Hanjin finally began discharging containers.

Back in Australia, News.com.au reported that as of last week, the delinquent Hanjin freighter was finally able to dock and unload its cargo, including the delayed auto parts. However, with the Ford facility scheduled to shut down permanently on October 7, for unrelated reasons, the local media source noted that, “It is unclear what will happen to the excess material and components.”

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