Some of the Japanese carmakers involved in the US market had to bring auto parts in the country via air cargo shipments to keep their factories running, as the west coast port dispute rages on.
Fuji Heavy Industries Ltd’s Subaru, the brand with the fastest sales increases in the US, already announced this week it would need to account for an extra 7 billion yen ($60 million) in costs each month due to the more expensive air cargo procedure- especially since prices went up together with the increased demand. “It looked like the labor talks were going well at one point but in recent days the slowdown has grown quite severe,” commented Fuji Heavy Chief Financial Officer Mitsuru Takahashi. He added that Fuji had to resort to air lifts of the necessary parts in order to keep auto production at its US plant going – otherwise it would have come to an abrupt halt in mid-February. US west coast ports have brought delays since October as labor talks between dockworkers and the group representing shippers and terminal operators have stalled. The labor negotiator leader for the latter claimed this week the ports were almost on the verge of complete shutdown.
Toyota, the world’s largest automaker, who counts the US as its largest single market, produced around 2 million vehicles in North America in 2014 and has now moved to axe overtime at some of its regional plants – though representatives of the company claimed production plans would go on without major changes. Honda and Nissan both acknowledged they also chose to air lift some of their parts, starting with late-January and December, respectively. South Korea’s Hyundai Motor said it was not impacted by the port delays so far, since it has added new and diverse shipping routes. Additionally, the carmaker mainly uses eastern ports to supply its assembly facility in Alabama.