Japan's Woes to Hit Containerized Auto Shipments to US

Japan's Woes to Hit Containerized Auto Shipments to US

Ongoing factory production and shipping problems in Japan from last week's earthquake and tsunami will hit containerized automobile parts shipments to the U.S., an economist warned, since the auto industry is the largest U.S. importer of box shipments from Japan.

Mario Moreno, economist for The Journal of Commerce, predicted Japanese exports "will weaken in the months ahead as the closing of several manufacturing plants prompted by electricity shortages combines with severely damaged roads and bridges to hamper production."

He said auto manufacturing and support businesses face the greatest threat of disruption. Any slowdown of parts shipments can also affect production facilities inside the U.S., he said, since, for example, U.S. plants making cars for Japan's Toyota "must meet strict specifications and use Toyota-made auto parts only."

Toyota stopped overtime at its 13 North America plants in anticipation of possible parts shortages.

By The Numbers: U.S. Trade with Japan

Moreno said Japan is the world's third-largest exporter of containerized goods to the U.S., behind China and South Korea. And it is second only to China as an importer of container shipments from the U.S.

But the auto parts traffic in 2010 accounted for 28 percent of total U.S. imports of such goods, he said, based on data from PIERS, a sister company of The Journal of Commerce. Rebounding from the 2009 recession year, parts volume from Japan rose 22 percent last year, though it slowed in January to just a 3 percent year-over-year gain.

Nissan Americas, the Tennessee-based operation of Japanese car maker Nissan Motor, said all Nissan factories in Japan except for its Iwaki engine plant have been able to repair some damaged facilities or equipment, but "it is still taking time to arrange delivery of parts from our suppliers."

Some of its auto plants in Japan are suspending operations until March 20, while others have resumed production while parts inventory is available but have yet to announce work schedules beyond this week. Both the Iwaki engine plant and a factory that makes transmissions are closed as they assess damage.

Besides the plant damage, the tragedy's disruption of shelter and food distribution, plus subsequent radiation risks from a damaged nuclear plant, have triggered evacuations from a growing number of areas. Some nations are recommending that their citizens in Japan consider leaving the country altogether

Nissan's Americas-region plants are running and will keep on their planned output schedule for now. Nissan Americas said it "does not anticipate any near-term impact on sales or vehicle availability," with about a 50 days' supply in the region or in transit from Japanese ports, and with about 70 percent of its vehicles made inside the region. About 1,300 Infiniti cars were damaged in port in Japan, but Nissan says it keeps about 20,000 in stock across the U.S.

-- Contact John D. Boyd at jboyd@joc.com.