American suppliers are all scrambling to deal with the potential catastrophe that is Bárðarbunga volcano. The logistics industry saw the Eyjafjallajökull eruption in 2010 make a harmful dent in business as result of the flight ban that grounded all deliveries to Europe. Therefore, companies such as FedEx and DHL are making the necessary preparations to ensure this volcanic hiccup does not happen again.
In fact the last eruption caused such a stir in FedEx deliveries, Paul Tronsor, managing director of global operations control for FedEx Express, was quoted in a blogpost as saying that Eyjafjallajökull eruption was the,…largest disruption of the FedEx network since the September 11, 2001, terror attacks in the U.S.
In a statement, FedEx explained that in contingency planning, the company predicts the most likely scenarios and develops plans based on those assumptions. Therefore, it is important that they deliver to their European hubs of Paris, Frankfurt, and Cologne because a majority of deliveries stem from those initial focal points.
Another important aspect of the freight delivered via air travel is its immense value to the bottom line. While air freight only makes up 2% of the industry volume, it accounts for 35% of the profits.
The significant profits are a result of the precious cargo being transported via the friendly skies. Electronics such as semiconductors comprise about half of the weight of cargo transported by air. Thus, another volcanic stoppage to the logistics industry could produce adverse results for quarterly or even yearly profits.
American suppliers are all scrambling to deal with the potential catastrophe that is Bárðarbunga volcano. The logistics industry saw the Eyjafjallajökull eruption in 2010 make a harmful dent in business as result of the flight ban that grounded all deliveries to Europe. Therefore, companies such as FedEx and DHL are making the necessary preparations to ensure this volcanic hiccup does not happen again.
In fact the last eruption caused such a stir in FedEx deliveries, Paul Tronsor, managing director of global operations control for FedEx Express, was quoted in a blogpost as saying that Eyjafjallajökull eruption was the,…largest disruption of the FedEx network since the September 11, 2001, terror attacks in the U.S.
In a statement, FedEx explained that in contingency planning, the company predicts the most likely scenarios and develops plans based on those assumptions. Therefore, it is important that they deliver to their European hubs of Paris, Frankfurt, and Cologne because a majority of deliveries stem from those initial focal points.
Another important aspect of the freight delivered via air travel is its immense value to the bottom line. While air freight only makes up 2% of the industry volume, it accounts for 35% of the profits.
The significant profits are a result of the precious cargo being transported via the friendly skies. Electronics such as semiconductors comprise about half of the weight of cargo transported by air. Thus, another volcanic stoppage to the logistics industry could produce adverse results for quarterly or even yearly profits.
