Supply Chains May Not Be Disrupted by Japan Turmoil, U.S. Truck Makers Say
By Frederick Kiel, Staff Reporter
This story appears in the March 21 print edition of Transport Topics. Click here to subscribe today.
Several truck makers and industry suppliers said their facilities sustained some damage from the March 11 earthquake in Japan, but they were not expecting it to result in significant supply disruptions to North America.
Following the earthquake and tsunami, package delivery companies FedEx Inc. and UPS Inc. said they suspended air freight services in and out of parts of northern and eastern Japan.
FedEx said March 16 it had resumed service in eastern Japan, except for three of the worst-hit northeastern regions, but “unavoidable service delays should be expected in these [restored] areas.”
UPS’ services to northern Japan remained suspended, the company said March 17. It had resumed pickup and delivery in eastern Japan, though “some delays can be expected. In addition, the UPS Service Guarantee has been suspended for these affected areas.”
Meanwhile, Volvo AB said its main factory complex in Japan received minor damage, forcing it to close briefly before reopening with a reduced production schedule.
“The [Volvo] Group’s main . . . production in Japan is centered at the UD Trucks’ facilities in Ageo, [where] the buildings have all suffered minor damages and are being investigated further,” Volvo said in a statement March 17.
The company also announced that two UD employees were found dead following the tsunami, which followed the massive earthquake.
Volvo, parent company of Volvo Trucks North America and Mack Trucks Inc., sold 1,095 UD trucks in Classes 4-7 in the United States last year, WardsAuto.com reported.
Ronald Remp, owner of Wheeling Truck Center, a Volvo dealer in West Virginia, told TT that “we’re already getting notices on medium-duty trucks from Japan to ‘bear with us’ on parts and supplies.”
Elsewhere, Navistar Inc. spokes-man Roy Wiley said the company, which manufactures International trucks and MaxxForce engines, has about 12 suppliers in Japan.
“But all of them are located outside the zone of the earthquake and tsunami, and for now, we don’t believe it will have any impact on our production,” Wiley told TT.
“We also have backup suppliers for most of our components, even if delays occur in Japan,” he added.
“The crisis in Japan has not had a significant impact on DTNA operations to date,” said Amy Sills, spokeswoman for Daimler Trucks North America, which builds Freightliner and Western Star trucks and Detroit Diesel engines. “Components, materials, and spare parts sourced directly from Japan represent a small portion of our business, but we are taking a close look at every tier in our supply chain for any potential issues.”
“The commercial vehicle market is much less reliant on Japan than the auto sector,” said Jonathan Starks, director of transportation analysis for commercial vehicle research firm FTR Associates, Nashville, Ind. “Unless you had a very widespread industrial shutdown for more than a few weeks, inventories should be mostly OK.”
Great Dane Trailers, Chicago and Savannah, Ga., said in a statement that “overall, we feel that all [our] operations will be unaffected by Japan’s disasters, and we will continue to closely monitor the situation for any potential material delays.”
Tire maker Yokohama Rubber Co. Ltd.. said March 14 that it had six factories in the earthquake zone.
“Immediately after the earthquake, all plants suspended operations,” Yokohama said. “No serious damage, including to buildings or equipment, was found, and operations were partially resumed after confirming safety.”
Several other manufacturers and suppliers did not respond to requests for comment.
Like FedEx and UPS, Maersk Line, a unit of Danish shipping group A.P. Moller-Maersk, said it temporarily suspended service to three northern Japanese ports — Sendai, Onahama and Hachinohe, Reuters News Agency reported.
Qualcomm Inc., San Diego, the largest U.S. truck telematics provider, said it did not foresee any significant effects on deliveries of its products because of Japan’s disasters, despite its production in that country.
“Qualcomm has multiple, geographically diverse sources for supply as well as production processes specifically designed to enable us to mitigate disruptions in our supply chain,” the company said March 16.
“Denso Corp. has halted all production in Japan until at least March 18 because of production halts from our customers, though a portion has already restarted,” Bridgette LaRose Gollinger, spokeswoman for Denso International America, Southfield, Mich., subsidiary of Japan-based Denso, told TT.
Denso supplies alternators, starters and numerous thermal and other internal components for trucks built in North America, she said.
Tire manufacturer Bridgestone Corp., Tokyo, said it reopened three of its plants in Japan this week and planned to resume deliveries March 17, Bloomberg News reported.
Overall, an analyst said the disaster is bound to cause some problems along the global supply chain.
“Short-termwise, import-exports are going to be disrupted,” said Charles Clowdis, managing director, transportation advisory services, at forecasting firm IHS Global Insight, Lexington, Mass. “It’s going to take a couple of weeks to clear up. That’s where truckers will be affected, as there will be precious little coming into West Coast ports from Japan.”
