Automotive Supply Chain Issues

Welcome to Time Critical Update, brought to you by Evolution Time Critical - the emergency delivery specialists. Providing you with the information you need to help you keep your supply chain running.

Fuel prices threaten every mode

Angry reactions to soaring fuel costs is just beginning
The price of oil has had a massive impact on logistics operations both on the road and in the air. Rising prices have not only affected the operating profit of many airlines, but have also led to a raft of protests, which have affected virtually all countries in the EU at both ports and borders.

The airline industry is cutting back services, withdrawing significant fleet capacity and, in some cases, facing severe financial difficulties. On the ground, industrial action and fuel protests have disrupted road haulage, as protesters blockade ports in France, disrupt border crossings in Spain and Portugal and hold mass protests in the UK. Worryingly, it looks like this type of action will increasingly hit other European countries and, indeed, others across the World too.

According to Brad Brennan, managing director of Evolution Time Critical, this may just be the beginning: "A senior executive at Gazprom, the world's largest gas company, has predicted that oil prices could rise to as much as $250 per barrel. This suggests that we could see many more challenges for time-critical deliveries, making contingency planning absolutely critical."

Evolution Time Critical is already plotting the major areas of concern and putting alternative routes in place for its clients. "Strikes tend to focus on the major lanes," says Brennan, "so a good knowledge of lesser-known routes and the smaller carriers that are familiar with them can help us to meet our customers' demanding schedules."

Levies add additional misery

Increased aviation taxes arrive at the worst possible time
The last thing the haulage and airfreight industries need is a higher tax burden; especially when coupled with the credit crunch and rising oil prices. However, environmental pressures are driving increases in aviation tax in several European countries, while in France a new law is in development that will allow freight companies to increase haulage surcharges.

Operations director at emergency logistics specialist Evolution Time Critical, Andrew Hampson, warns that increased levies could have an unwelcome impact on time-critical deliveries. "Price rises are unwelcome, but the most critical issue is that many transport companies will be forced to cut back their marginal capacity in order to protect their bottom lines. This provides a lot less flexibility and hence a lot less resilience. We are already having to increase the breadth of our transport resources to help our customers find alternatives to their traditional suppliers, who are increasingly unable to schedule transport at very short notice."

New points of failure for European road network

European road improvements face delays and price over runs
A new EU report claims that it will cost an estimated euro 400 billion to complete Europe's transport network. Not only is the project running behind schedule, but the price estimate is 17 percent higher than previous estimates.

European sales director at Evolution Time Critical, Steve Risby, explains: "Stretched capacity inevitably means that timetables will suffer. We are looking closely at where weak links are developing to help our clients continuously re-evaluate the strength of their supply chains."

New hub increases possibilities

Cologne-Bonn gets new cargo centre
A euro 25m investment at Cologne-Bonn airport will result in a brand new 12,000sq metre general cargo handling centre; opening for service in 2009. Offering direct airside access, the centre brings several advantages for time critical logistics.

"We routinely look to smaller airports to see if they can allow us to shave valuable hours or even minutes from the delivery schedule, giving manufacturers additional time flexibility. Of particular interest in this case as well, is the fact that Cologne has no night flight restrictions, so it is ideal for companies like Evolution that offer out-of-normal-hours services," explains Evolution Time Critical director Chris Read. "We have seen these services called upon more and more as many of the leading OEMs and suppliers rely on the time flexibility that it gives them. They can despatch cargo later in the working day, knowing that it will be delivered on time."