Ahead of the Crowd — Going Above Supply-Chain Delays
The Wall Street Journal’s October 10, 2021 issue includes an article, “Biggest U.S. Retailers Charter Private Cargo Ships to Sail Around Port Delays.” The article opens with the following:
“Global supply-chain delays are so severe that some of the biggest U.S. retailers have resorted to an extreme — and expensive — tactic to try to stock shelves this holiday season: They are chartering their own cargo ships to import goods.”
It details why and how companies including Walmart, Costco, Home Depot, and Target are paying for their own chartered ships as part of wider plans to mitigate supply chain disruptions and help ensure that key products arrive for the holiday season.
This is not news to Enovix. We encountered a similar situation in April. But instead of chartering a cargo ship to meet holiday shopping demand, we chartered an An-124 from Antonov Airlines to keep our factory equipment installation and advanced battery delivery schedule on track.
Here’s a video that shows some of the steps we took to pick-up and fly critical battery production equipment from Asia to SFO airport in San Francisco. From here, the cargo was unloaded and transported by trucks to our production facility in Fremont, California for installation. In April, Enovix CEO, Harrold Rust, gave the following reason for taking this, at the time, unusual action:
“Our customers are counting on us to deliver our high-energy batteries next year for their next-generation portable electronic devices. We’re pulling out all the stops to complete equipment installation for the first 100% active silicon-anode lithium-ion battery production facility in the U.S.”
As a result of Operation Equipment Airlift, in August we announced that we had completed equipment installation, and in September we announced that we had manufactured battery cells from our first automated factory in Fremont, California. Neither of these milestones would have been achieved without the extraordinary action we took to fly above and beyond the supply chain disruptions in April.
Our operation caught the interest of American Shipper. On September 28, 2021, it published an article, “Lithium battery maker airlifts assembly line to leapfrog port congestion,” written by Eric Kulisch, Air Cargo Editor. The article includes more detail about our undertaking, including the following:
“Enovix is a case study in how companies are going above and beyond traditional logistics tactics to keep their businesses running with supply chains snarled for more than a year.”
“The [Enovix] automated assembly line consists of more than 25 robotic pieces of machinery that work in unison. The total shipment weighed 55 tons. After undergoing extensive testing at factories in Asia, the equipment was partially disassembled and carefully packed into 60 shipping crates before being loaded on the An-124, which delivered it to San Francisco International Airport on a Sunday in late April.”
“Most of the units arrived on flatbed trucks at the Fremont facility within hours of landing. One piece was so large it required an escort by the California Highway Patrol the next day.”
“The air charter operation, including logistics arrangements, represented ‘a massive shortcut’ for setting up the [Enovix] factory, said [Cam] Dales, [Enovix General Manager and Chief Commercial Officer]. ‘It certainly involved premium pricing relative to other modes of transportation, but from an ROI perspective it was kind of a no-brainer for us. The time was just so valuable.’”
The ocean transportation system has never been as clogged for a prolonged period as it is now. Cargo is piling up in terminals faster than trucks and trains can move it out. As companies now take drastic actions to deal with delays, we’re pleased we acted six months ago.
Sometimes it pays to be ahead of the crowd.