The ongoing strikes in Brazil and a period of industrial disruption in Nicaragua are threatening the supply chains of several major vehicle manufacturers. Delays to the supply of parts from the locations could impact production globally and are the latest in a series of worldwide disturbances. According to emergency logistics specialist Evolution Time Critical, even a prompt resolution of industrial action will have growing immediate and short-term consequences for affected supply chains.
“The inherent complexity of any automotive supply chain makes it susceptible to turbulent unpredictability, and the provision of emergency logistics expertise is a vital resource for the continuation of existing operations, especially in less established or emerging regions,” explains Evolution Time Critical deputy managing director, Graham Little. ”These two ongoing disturbances are the latest example of our proactive work to reduce the risk of production delays at several locations globally. We have recently also carried out extensive work following air strikes in France, which impacted freight capacity and jeopardised global supply for a number of major OEMs. ”
Over half-a-million truck drivers have been striking in Brazil throughout May over rising diesel and toll costs; several ports have slowed and eventually ceased operation, and flights are being grounded. Ahead of elections, Nicaragua has experienced widespread industrial action and protests with no imminent resolution apparent. “Brazil has been growing in prominence as a low-cost location for several manufacturers in North America especially, and Nicaragua is home to tier suppliers providing components to OEMs worldwide,” continues Little.
“Even the immediate lifting of strike action and a return to work does not guarantee a smooth transition to pre-disruption supply without the help of ultra-time sensitive logistics,” he explains. “Vehicle manufacturers’ understanding of how to mitigate supply chain risk has matched their ambition of operating streamlined processes, and as a result they appreciate the benefits of working with a multimodal logistics partner such as Evolution Time Critical.
“Through analysing routes, legislation and lead-times, or expediting freight from existing or alternative locations, emergency logistics is able to bridge any potential gaps in the supply chain and help get component flow back on schedule,” Little concludes. “We can help assess the short-to-mid-term impact of current industrial action and ensure that a safety net is in place that protects vehicle manufacturers from costly production downtime both now and during the recovery period.”