Shipping crisis, LPG shortage hit Bengaluru's MSMEs in Peenya

Bengaluru: The ongoing global shipping crisis and a critical shortage of LPG are pushing micro, small and medium enterprises (MSMEs) in the Peenya Industrial Area towards an operational crisis.

Many manufacturers of automotive parts stated that shipping components to Europe, which typically took between 33 and 35 days, will now take 56 to 60 days.

This will likely hit global giants like Volvo and Stellantis, who depend on the Peenya Industrial Area for automotive parts.

Several heat-treatment plants, which are essential for hardening automotive parts, have also come to a halt due to the shortage of commercial LPG.

"Without heat treatment, further machining is impossible. Our suppliers aren't returning parts because they don't have the gas to run furnaces," one of the manufacturers told DH.

For automotive component manufacturers, the primary headache is the skyrocketing lead time. Lead time specifically refers to the time elapsed from placing an order to receiving the final product or service.

"Our estimated time of arrival (ETA) for specific customers is being delayed by two to three weeks," a source from a major automotive precision manufacturing firm in Peenya said. "This is causing an acute shortage at the customer’s end in Europe."

The impact is hitting global giants. Components destined for Volvo, Magneti Marelli, and Stellantis (the parent group of brands like Jeep, Fiat and Maserati) are currently stuck in transit or sitting in 40-foot containers on the factory floors.

Batch of components waiting to be exported are still in the factory floor.

"Exports happen weekly and even daily. For UD Trucks and Volvo, it’s about 6 to 7 tonnes weekly. For Stellantis, it is every 15 days and we load a full container of about 11–12 tonnes for them. Our 40-foot containers carry about 17 to 21 tonnes to Europe," the source added.

The financial implications are huge. "If a customer’s production line stops for even two hours because the parts didn't arrive, they will penalise us for the loss. That cost can be as high as Rs 45 lakh," the source added.

"We have to bear it. We can’t tell a global OEM that we don't have gas or a ship."

The shortage isn't just affecting the machines; it’s affecting the workforce. At CNC Technologies, while the machines run on electricity, the canteen, which feeds over 100 workers, is running out of fuel.

"We need about 10 cylinders a month for the canteen. We have stock for a couple of more days. If the supply doesn't come by then, we don’t know how we will serve our workers," said Sandeep Parvathikar, Director of CNC.