Cargo Business Newswire

Tuesday, February 10, 2015

Japan’s carmakers pay millions in extra shipping costs on port backups

Japanese carmakers are being forced to ship some car parts to U.S. factories via pricey air cargo and alter production processes as the labor dispute at U.S. West Coast ports rages on and cargo backlogs continue.

Subaru, the fastest-growing brand in the U.S., said that it has had to shell out an extra $60 million in costs a month due to air freight, which has seen prices go up with the extra demand.

"It looked like the labor talks were going well at one point but in recent days the slowdown has grown quite severe," said Mitsuru Takahashi, financial officer at Fuji Heavy Industries, Subaru’s parent company.

He said that without chartering cargo flights, the Subaru's U.S. production would have stopped in mid-February.

Honda Motor Company and Nissan Motor Company said they had shifted to air shipments for select components, from late-January and December, respectively.

A Hyundai Motors spokesman said the company uses East Coast ports more than West Coast ones to supply its factory in Alabama, and was seeing no impact on production up to now since it had added and diversified shipping routes.

For more of the Reuters story: www.reuters.com