Thailand flooding impacts air freight

By Freddie Pierce
Last week, we reported on the breadth of the impact the 2011 Thailand Floods were having on the global and regional supply chain, but it turns out we f...

Last week, we reported on the breadth of the impact the 2011 Thailand Floods were having on the global and regional supply chain, but it turns out we forgot one important footnote of the natural disaster.

Air freight inside of Thailand will likely go on a roller coaster-type ride in the coming months. Cargo volumes are expected to drop in the near-term as factories struggle to meet benchmarks, but long-term air freight cargoes could be a different story.

A rebuilding spike could drive volume once the demand surge hits when the floodwaters subside.

“A lot of parts manufacturers are flooded, but still quite a few assembly factories are open so we may get a rush of air freight shipments of parts to support the assembly plants as the spares are underwater,” Senior Vice President Asia of Bangkok Flight Services told Air Cargo News.

There is some concern regarding the strength of a recovery, however, as global air freight volumes dropped for the fifth consecutive month in September, according to numbers posted by the Handy Shipping Guide.

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The floods will impact air freight shipments of the automotive and electronics sectors the most, according to multiple reports. Carmakers in Thailand have seen production decrease by about 6,000 units per day, with plants at Toyota, Honda, Nissan and Ford experiencing problems.

The electronics supply chain is also struggling, with hard-drive disk manufacturers like Western Digital experiencing factory flooding.

So far, flooding has displaced thousands of residents and has led to the deaths of at least 370 people. It’s unclear when floodwaters will recede within Thailand.

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