European companies importing semiconductors from Asia are facing higher prices. They are also using backup stock. This is because the war in Iran has disrupted air freight routes over the Middle East. This news comes from industry sources.
War Affects Air Cargo and Chips
Since the war in Iran began on February 28, shipping lanes and airports have been attacked. Air cargo capacity worldwide has dropped by about 9%. This is less than before the war. Logistics company DSV provided this data. The drop in capacity directly affects chip import costs. It also causes delivery delays. Some companies are importing fewer chips now. A report by CNBC shared this information.
Chips are vital for all electronics. They are in cars, data centers, and industrial machines. European manufacturers rely on chip shipments from China and Taiwan. These chips are essential components for many products.
Higher Costs and Using Backup Stock
European firms are paying extra costs. This ensures their supply chains keep running. Stefan Krekic noted this. Some car companies face chip delivery delays of several days. Other companies use their backup stock. This helps reduce the impact of high shipping costs. This is especially true for less valuable products compared to advanced chips. High-tech infrastructure also uses these chips.
Changes in Flight Routes
Attacks on air infrastructure in Iran have changed flight paths. Transport companies now avoid direct flights from Asia to Europe. They also reduce cargo loads to save fuel. This significantly raises transport costs. Jet fuel prices are also high, making up about 50% of operating costs.
Limited Impact on Production So Far
Costs are rising, but some companies are not yet affected. Volkswagen, for example, has not seen a direct impact on its production lines. The company is watching its supply chain closely. Razat Gaurav said companies are checking chip flow proactively. They are rebalancing stock and rerouting shipments. This minimizes disruption from routes like the Strait of Hormuz and Dubai airport. Experts note that backup chip stocks, increased since the pandemic chip shortage, help companies manage these shocks. This lessens the effect on productivity and costs.