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Will defective airbags inflate air freight demand?

David Harris by David Harris
January 25, 2016
in Capacity & Demand, News Archives
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The replacement for your airbag inflator will probably arrive via ship. Photo: Alexauto/Wikimedia
The replacement for your airbag inflater will probably arrive via ship. Photo: Alexauto/Wikimedia

Once again, defective airbags are forcing US automobile dealers to stage a massive recall. What does this imply for air freight demand?

Think back almost one year, to the first quarter of 2015. Demand for international air freight in the combined January/February period was up 22% for Asian carriers and 12% for North American carriers, lifting worldwide demand 13% over the same period in 2014. As we all know, there was relatively little underlying demand growth, and the increase was driven by a combination of labor problems at the US West Coast ocean ports, and a huge automobile recall to replace defective airbags.

If you scan the headlines in Japan and the US today, you’ll see that another five million vehicles have been recalled in the US, a move spurred by yet another death caused by a faulty airbag manufactured by Japan-based Takada. This was the ninth airbag-related death in the US, and the tenth overall, and the new recall includes vehicles manufactured by Audi, BMW, Ford, Honda, Mazda, Mercedes-Benz, Saab, and Volkswagen.

Will this latest recall drive another spike in air freight demand? While there will probably be some impact, our guess is that it will be minor compared to last year. The real driver of last year’s modal shift was the slowdown at the west coast ports, and this year those ports are functioning smoothly. So while there may be an airbag airlift to get an initial supply of new parts to US automobile dealers, it seems unlikely that we will see any major surge in Asia-to-US air freight demand.

And for the technical-minded, the problem with the Takada-manufactured airbags is that in some cases, the propellant used to  inflate the airbag reportedly can explode with too much force, spraying metal shrapnel into the passenger compartment.

Tags: airbagautomobile recalldemandmodal shiftTraffic
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