Airports - vital to supply chains?

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Is the temporary shut-down of Bangkok’s two international airports important in a supply chain perspective? So far, the issue has been stranded tourists, maybe as many as 100000. Now it’s also becoming a major headache for the tourist industry and subsequently for Thailand’s national economy, loosing as much as $85 million per day, according to the BBC News. Not only that, air freight will also be impacted, but why is this important?

More than just tourists

While all modes of transport are used for cargo transport, there is high differentiation between the nature of the cargo, and the mode (rail, road, sea or air) chosen for its transport, and air freight has become more and more common for products of high value. While less than one percent of world transport by volume is by airline, it amounts to forty percent of the value. Many companies have set up sophisticated supply chains, where low-cost bulk items are shipped by sea with long lead times, whereas high value components are flown in according to customer demand. Frankly, I do not know the value of goods shipped by air from Bangkok, but I would imagine that the shut-down of the airport has created some minor (or major) havoc around the world.

One week or more

And even if the shut-down eventually ceases, it may still take a while for the airport to be fully operational, maybe as much as one or even two weeks. Fortunately, there’s more than one airport in Thailand, while we wait for Bangkok to start working again, but the focus of the airlines is probably more on getting people out than getting boxes and crates on the planes that are leaving via the other airports.

Environmental risk

Supply chains can be crippled by many events and political unrest falls into the category of environmental supply chain risk, as defined by Christopher. However, I doubt that a peaceful demonstration locking down an airport was on the list of possible scenarios for environmental risks.