The world’s parts supply chain may change

The world's parts supply chain may change

“For the automotive industry, the challenge brought by the epidemic is not only at the sales terminal but also at the level of the industrial chain. In China, GM not only produces cars but also purchases parts for global production. With the strong support of China, The global supply chain is currently running smoothly. “Qian Huikang, executive vice president of GM Global and president of GM China, told the media at an online communication meeting on March 3.

But for the parts supply chain, the mode of air transport or even charter transport is just an emergency. In an interview with reporters, SAIC Anji Logistics said that in general, for the transportation of parts and components for international trade operations, in order to ensure stability and timeliness, sea transportation will be used. But “because of the sudden outbreak and limited traffic, for core and special parts and components in a particular period of time, we immediately adopt special measures for charter flights.”

Compared to shipping and land transportation, the cost of air transportation will rise significantly. Dan Hearsch, managing director of consulting firm Arrow Consulting, said that for multinational car companies, this high-cost model is unsustainable.

And Anji logistics also told reporters that due to time constraints and heavy tasks, spare parts suppliers have resumed work, the ground operations of charter flights with fixed flight plans, customs declaration, packaging, security inspections have brought great challenges. In order to ensure the smooth shipment of the above-mentioned parts and components, Anji made sufficient plans in advance. For different types of spare parts products, it adopted an advance planning operation schedule and pre-checked the declaration information to provide a guarantee for normal loading of charter flights and on-time departure. However, charter flights are an option under extreme conditions. When the market is tight and commercial flights cannot meet the capacity, charter flights are a backup option for logistics companies. With the restoration of land transportation, from the perspective of cost, the follow-up mode will be based on maritime transportation and supplemented by commercial flights.

Global auto companies are looking forward to the revival of China’s component supply chain, but at the same time, auto companies are actively looking for alternative suppliers. “Although not all employees have returned to the factory, we are speeding up the processing of previous orders, because once our order is delayed for a long time, the other party may seek new suppliers.” Parts manufacturers told reporters that due to the impact of Sino-US trade, the company’s order volume began to decline last year. If it is affected again this year, the company will face difficulties in survival in a short time.

A research report by Tianfeng Securities believes that for China’s parts supply chain, after February 20, the epidemic began to spread globally. If the epidemic continues to spread, it will have a secondary impact on the global automotive supply chain; in the short term, Look, the business of export-oriented parts companies may be greatly affected in the second quarter; however, he also mentioned that from another perspective, the spread of the epidemic may cause short-term supply cuts for Japanese and Korean auto companies in China, and in the long run See, they may also be expected to include high-quality Chinese suppliers in their supporting systems.

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