Tianjin Effect to Raise Air Freight Demand – Felt by Intra-Asian Supply Chains


The Tianjin effect taken place last week is to create a high disturbance for Intra-Asian supply chains as companies are aiding towards air freight. Air freight demand rose because of blasts taken place at Tianjin port. Although, demand for Air charters increased, factories present in other cities are affected high as they require parts from factories present in Tianjin port. Due to blast, a rise in demand is seen for auto parts shipments, carried out especially for Japan. It is an expectation that this demand will last only for a while as there is enough air freight capacity especially on major routes. A feeder line representative said that some outside depots also destroyed by this explosion in which Jinshi and Malun are major depots. Apart from them, there are many carriers working with them together are affected badly and some among them are Evergreen, Maersk and Wan Hai. Still it is to be revealed about total loss happened as it is under prohibition till today.
It is known from the source that 50 members’ staff of Toyota Company got injured. Due to blast, the company is going to close its three Tianjin production lines in this month. It is estimated about 2,200 units per day as loss in three production lines said by Mark Fulthorpe, who was director of HIS Automotive light-vehicle production. John Deere Tractor Company announced its production suspension in Tianjin as buildings got damaged and some of their staff got injured in this blast. Renault Company lost 1,500 cars in this blast, by which its deliveries for China would fall for next two months. Along with Renault, 2,700 cars belonging to Volkswagen Company got damaged in this blast.

Tianjin – Biggest Automobile Shipping Port in China
Tianjin is the biggest automobile shipping port in China, which is used for shipping vehicles within the country, especially to northern parts of China. This is the biggest port in China, widely used for imports and exports. It is recorded that 40 percent of China’s imports are carried out through this port, which is the largest share. The explosion took place in Tianjin port is going to show a great impact on import operations. It is expected to show the impact on 30,000-60,000 imports of 1 million cars this year. It will take a couple of months for the port to return to normal state. The electronic supply chain is going to affect more as many of chemicals used for electronic production and stored components were burnt in the explosion due to which, industrial materials price will rise. Singamas Logistics Company (SLTC) which is the second largest container manufacturer in the world has its depot 800m near to the place where the blast took place. Another SLTC depot which is very close to the port got damaged badly.

As SLTC away from the blast area, it is expected to be unaffected by the blast announced by Hong Kong stock exchange. But it is still to be verified if it was affected or not as of now the area is prohibited. One of the employees belonging to SLTC is missing and the company is unable to contact him to know his condition. As of now some operations are going on as usual in Tianjin’s container terminals, there are some limitations. It is said by PSA International that operations are running smooth at its joint venture named as Tianjin Port Alliance International Container Terminal (TACT) and Tianjin Port Pacific International Container Terminal (TPCT). Although some terminals are unaffected, demand for air freights increased due to blast.


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