Newsletter - October2019

Centrolene
NewsEdge Know more.
Page: 14
“Relocating an entire manufacturing production facility often requires moving
heavy machinery and putting production on hold. Moving this equipment via
ocean exposes a business to the common pitfalls of container shipping: port
congestion, longer transit times, and more.
“More importantly, however, ocean transport puts a facility out of operation
for weeks, if not months. With airfreight, however, necessary equipment can
be moved and back up and running in days.”
Flexport highlighted a number of moves by companies in response to
changing US-China tariffs. For example, diesel engine manufacturer Cummins
Inc reported $50 million in avoided tariffs by shifting production from China to
India and other nations, while footwear brand Crocs expects less than 10% of
its imports in 2020 to come from China.
In a guide entitled ‘The Agile Supply Chain: Leveraging Airfreight Strategically’,
Flexport said shifting exports was one method companies have used to help
mitigate exposure to tariffs, with air freight used by some to make this
possible, by quickly relocating sourcing or production processes to new
locations.
But for many businesses, it said the challenge of rising tariffs may lie less in
the increasing costs “and more in the potential for reducing shipment delays”,
adding: “With each tariff announcement, a surge of Chinese exports follows,
as businesses aim to get their goods to the US ahead of implementation, at a
lower rate. In these instances, airfreight can also help companies avoid makeor-break
scenarios caused by port congestion.”
It continued: “Unlike the expected crunches of peak season, increased
congestion caused by tariffs is shaping up to be an unpredictable, long-term
concern. With this in mind, more businesses are beginning to lean more
heavily on-air freight to keep things moving.”