Volcanic ash hurts U.S. exports, imports

Mitchell Hartman Apr 19, 2010

Volcanic ash hurts U.S. exports, imports

Mitchell Hartman Apr 19, 2010


Kai Ryssdal: Air travel in Europe is slowly beginning to pick back up again. Very slowly. There will be some commercial flights across the continent tomorrow. Nothing remotely near normal probably for at least a couple of days, though. On this side of the Atlantic, meteorologists say the ash cloud has brushed parts of the Canadian coast. And the havoc in Europe is starting to have an economic impact in the states. Pretty much nothing has moved into or out of European airports for five days now.

That’s not just people: it’s goods, too. Everything from cut flowers to car parts. Companies are reporting inventory levels falling to dangerously low levels as their supplies sit in European airports. And there is a sharp slowdown in American exports heading the other way, too.

Marketplace’s Mitchell Hartman reports.

Mitchell Hartman: A number of European companies said today they were scrambling to get materials to their U.S. facilities: including Siemens, the big German engineering company, and BMW.

Howard Archer is an economist with IHS Global Insight. He says many manufacturers keep their inventories low for efficiency’s sake. Now that’s causing problems.

HOWARD ARCHER: Companies that do engage in just-in-time production will be the most, most vulnerable. I mean, both in terms of getting inputs, and of course, for example, if they need any spare parts of the machinery.

Getting finished goods to Europe is proving just as problematic.

David Ickert’s 200-employee company in Olney, Texas, makes specialty aircraft.

DAVID ICKERT: We have a couple planes en route to Spain that are forestry firebombing planes, and they are stuck in St. John’s Bay, Canada.

Ickert’s company, Air Tractor, has already been paid for the planes sitting on the Canadian tarmac.

ICKERT: Now that same buyer has another four airplanes that are to go fairly soon. Those sales can’t be completed until we get clearance to ferry them on.

The next step is to look for alternatives to air freight, says Howard Archer.

ARCHER: You know, you’re only going to switch from exporting and importing by plane to boat if you really think this is going to go on for some time.

One U.S. business that’s feeling the impact isn’t complaining one bit, though.

Cisco Systems says that with so many businesspeople unable to travel, it’s seeing a big increase in its videoconferencing business.

I’m Mitchell Hartman for Marketplace.

There’s a lot happening in the world.  Through it all, Marketplace is here for you. 

You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible. 

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.