Resilient logistics industry shrugs off veil of ash
April 27th 2010 The UK logistics industry has demonstrated resilience and is swiftly recovering from the volcanic ash crisis, which grounded aircraft in much of northern Europe for six days between April 15 and April 20.
But the industry is also struggling to grapple with the cost of the unprecedented suspension of air travel.
There is no doubt the crisis has had a considerable impact on air freight, with Chartered Institute of Logistics and Transport (CILT) chief executive Steve Agg saying that although new arrangements had quickly been put in place to circumvent the flight ban, some significant losses had occurred.
The smart utilisation of rail, sea and road facilities had kept losses to a minimum and, under the circumstances, service levels had remained reasonably high, he added.
It is difficult to pinpoint the cost of the crisis to the logistics industry but the figure is likely to have run into the many millions. While almost all the world’s freight goes by sea, rail and road the 2% by volume that goes by air accounts for around 35% of the value.
European Commission president Jose Manuel Barroso has ordered the formation of a group to study the impact of the volcanic ash cloud on the European economy, which should ultimately shed light on the cost to the industry.
But there is no doubt there have been considerable losses related to spoiled and perished goods, delayed sales, consequential losses due to unavailability of product, lost haulage income and lost air freight business.
Geoff Dossetter, chairman of OG Transport Media said: “Last week specialist UK air freight hauliers were reporting that 70 per cent of their operations were at a standstill. Some of that traffic will be recovered, but other - flowers, fruit and veg - will have spoiled and been lost.”
Despite that, Dossetter said the industry was in many cases able to make alternative arrangements and had quickly bounced back.
“Some perishables were flown from Africa to Spain and then trunked across Europe to the UK,” he said.
“The industry has made a very quick recovery because the vast majority of air freight is carried not by air freight planes, but in the belly of passenger planes - which have been back in full flight for some time.”
Logistics giant CEVA coped with the crisis by re-routing aircraft to cities outside northern Europe and using other modes to reach their destinations.
“We flew into areas such as southern Spain, Istanbul and Dubai and then looked at short sea shipping or road or a combination of road and rail to get the goods where they needed to be,” said a CEVA spokesperson.
“I know, for example, that some high tech products were taken from Istanbul to Amsterdam in this way.”
“In certain circumstances we worked with our chartered services and onboard courier team who have great relationships with carriers and providers to make sure we kept the supply chain moving and weren’t causing too much of a backlog in certain areas. For this reason, Dubai was useful because it has an airport and ocean ports which allowed us to get goods in and then transfer them out.”
CEVA said the shipping of high-end, high tech components was one of the sectors worst affected.
“Air freight tends to be a key part of the standard supply chain for products such as semi-conductors for cars and mobile phones. If the situation had continued for even a few days longer, it may well have had an impact on the production of those items,” added the CEVA spokesperson.
The crisis has shone a light on the long distance air freight of luxury and perishable goods, with some commentators questioning its environmental credentials.
CILT’s Agg countered the argument: “The experience has served to emphasise the value to us of the sophisticated twenty-first century supply chains we have constructed resulting in economic, environmental and consumer benefits.
“For example, we are now able to connect the availability of the ideal sunny growing climate for flowers and fresh produce in Africa, with the consumer market for them in Europe, thus bringing enormous advantages to African economies, and simultaneously saving energy and carbon emissions in Europe.
“Cut flowers represent 20 per cent of all exports from Kenya, but the local growing conditions, together with the air freight to Europe, consume less energy and produce less carbon than if they were to be grown in European greenhouses.
“The ability of freight transport to move the flowers and offer them fresh in Europe, is beneficial for the Kenyan economy, is environmentally and carbon efficient, and is welcome to European consumers. That experience is replicated across many situations and products and benefits us all.” More articles from Handling & Storage Solutions: | 
