• Typhoon Jebi disrupts supply chains in Japan’s southern-central regions

    06 September 2018

    At least 10 people were killed and over 200 people have been injured following Typhoon Jebi’s landfall in Tokushima region at around 12:00 (local time) on September 4. According to sources, the weather system has been regarded as the most powerful storm to make landfall in Japan in 25 years. Reports suggested that over 300,000 households have been evacuated and 1.5 million households in Osaka and nearby areas have been left without electricity.

    Supply chain operations across southern-central regions, i.e. Kansai and Shikoku have been severely disrupted as factories have shut down as precautionary measures and airfreight movements have been impacted due to the temporary closure of Kansai International Airport (KIX). Due to high tides, one of the two runways and the ground floor of KIX’s terminal building which is used for sorting luggage and other activities were flooded and resulted in the airport’s shutdown at 15:00. At present, around 700 international and domestic flights have been cancelled to and from Kansai.

    Moreover, a bridge that provides access to the airport was destroyed after a 2,591 tonnes anchored fuel tanker drifted into the bridge due to severe winds. Local authorities have not indicated when the bridge is expected to be fully repaired. The airport, which is the third largest in Japan and built on an artificial island in Osaka Bay, is expected to remain closed until at least September 6. Without the bridge to access the airport, pickup and delivery services for cargo, particularly for semiconductors, are bound to be disrupted as the airport plays an important role for supply chains in Japan.

    Inland transportations, including the Tokaido bullet train service line between Tokyo and Shin-Osaka remain suspended. Sanyo bullet train service line, Japan Railway (JR) West, JR Central, JR Shikoku and Nankai Electric Railway networks remain suspended since September 4 at 14:00. At the time of writing, it remains unclear when operations will resume.

    In addition to freight disruption, production has also stopped at numerous plants as precautionary measures. Reports on September 4 suggested that Daikin Industries, Ltd. shut down its headquarters in Osaka and three of its plants. Panasonic Corporation halted its air conditioner and refrigerator production facilities in Shiga region. Other electronic manufacturers like Sharp Corporation also stopped production of white goods in Yao City, Osaka region. There was no clear indication of when the factories were likely to resume productions.

    Automotive corporations like Toyota Motor canceled its night operations at all of its 11 car and component factories in Aichi region, including its subsidiaries such as Toyota Auto Body, Toyota Motor Kyushu, Toyota Motor East Japan, and Toyota Industries. According to sources, Toyota plans to resume operations on the morning of September 5. Other automotive manufacturers like Hino Motors also followed Toyota’s footsteps by halting productions overnight on September 4. Honda Motor Company also halted productions at its plant in Suzuka city, Mie region. Its subsidiary, Honda Auto Body plant in Yokkaichi city, Mie region also followed the same procedure.

    Daihatsu Motor Co., Ltd., reportedly implemented a policy to stop operations for 24-hours at its primary factory in Ikeda city, Osaka region. Night time operations were also stopped at No. 1 and 2 plant in Ryuo town in Shiga region, and Kyoto plant in Oyamazaki town, Kyoto region.

    Mitsubishi Materials Corporation stopped productions at Akashi city which reportedly produces cemented carbide tools for aircrafts. Moreover, Komatsu Ltd. suspended operations at the Osaka factory in Hirakata and the Rokko factory in Kobe. Shiseido Company, Limited also suspended operations at Osaka factory in Higashiyodogawa ward.

    As a result of the closures, factories across Kansai may face delays in delivery of spare parts for the coming days as well as delays in customs clearance as Kansai Custom’s offices were reportedly closed. Sources indicated that Disco Corporation, a precision tools maker for the semiconductor production industry is likely to see delays from its factory in Hiroshima region. Screen Holdings Co., Ltd., a semiconductor equipment manufacturer which normally ships via the Kansai airport to deliver products and parts may likely change to other modes for deliveries. The nearest airport to Kansai is Itami Airport, also known as Osaka International Airport, which companies can use as an alternative to Kansai.

    In terms of ocean freight, local sources indicated that container yards at Osaka and Kobe were closed on September 5 while Port Island Container Yard had resumed operations in the afternoon. Nevertheless, the main container freight station remains closed.

    Customers with shipments to the affected regions are advised to liaise with local representatives to keep abreast of the developments as well as to ensure business contingency plans are in place as Japan is prone to frequent natural disasters.

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