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Volcanic Ash In Europe Halts Airfreight In Asia

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Volcanic Ash In Europe Halts Airfreight In Asia

Asia

Volcanic Ash In Europe Halts Airfreight In Asia

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MELISSA BLOCK, host:

As Europes skies open up, businesses are starting to tally the cost of the volcanic ash. Global supply chains were thrown into disarray by the closure of airspace with ripple effects all the way down the line.

NPR's Louisa Lim reports from Shanghai on the impact in Asia.

LOUISA LIM: Every day, on average, 10,000 tons of goods are air freighted between Asia and Europe. But none of that has moved for the past week. Huge stockpiles are clogging up freight forwarding centers and warehouses. For some exporters like Simon Aliband, business-as-usual has been paralyzed by the volcanic ash plume.

Mr. SIMON ALIBAND (Regional Director, Otto International): It's had quite a significant impact. We currently at the moment from China have 292,000 pieces of garments stuck in airfreight warehouses waiting to be uplifted to Europe.

LIM: Aliband is regional director of Otto International, the world's biggest long-distance retailer, selling clothing online and to catalog companies. The company is a just in time business; it produces and ships goods to order, rather than having large stocks.

Mr. ALIBAND: If you're selling online and you don't receive as an end customer the goods that you've ordered in time, then of course you may well cancel. We can imagine our customers in Europe are losing millions per week.

LIM: In Asia, those worst-affected include cell phone and semiconductor makers. Japanese automaker Nissan has suspended production at two plants, for lack of parts imported from Ireland. In South Korea, one trade association put the cost of lost exports at more than $100 million. Asian gourmets may also suffer: Hong Kong is running low on its stocks of Belgian chocolates, French cheese and Norwegian salmon. But it's not just about fast fashion and food. The crisis could end up pushing up prices for consumers, according to Greg Knowler, editor of�Cargonews Asia�in Hong Kong.

Mr. GREG KNOWLER (Editor, Cargonews Asia): It'll cost shippers, the factories, a lot more to send their stuff by air to Europe. What happens with foreigners, they traditionally just pass on the costs.

LIM: And some are warning that even if the volcano does stop spewing ash, the backlog of cargo could take up to a month to clear.

Louisa Lim, NPR News, Shanghai.

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