Although the Suez Canal handles only 13% of global trade, its blockage rippled through the supply chain worldwide. The BBC reported that 369 ships were stuck waiting for the Ever Given to be refloated. Not only did all those ships have significantly delayed cargo, but the disruption created a backlog of cargo that continues to be felt today at ports, warehouses, shipyards, retail locations, and ultimately, by customers.
For an example of the negative effects this sort of delay can have, let’s look at perishable deliveries. Perishables are on tight delivery schedules that ensure the product arrives at its destination fresh and ready for purchase. Adding a week to the delivery timeframe for perishables can kill the entire supply chain. Even if the goods are still delivered in acceptable condition, they will not be able to spend as much time on shelves, resulting in a massive amount of food waste and lost profit.
The Suez Canal block has also affected supply chains through the ships that were rerouted from the canal. These ships will arrive later than expected and have a higher potential for damaged cargo as they spent more time navigating through rough seas. This may delay shipments, cause inventory shortages, and create logistical difficulties at various offloading points.
Congestion and disruption can always get worse. Because shippers and even logistics experts can’t always predict exactly what will happen, it’s important to have a plan for every eventuality. Planning ensures that you remain flexible and meet your goals, regardless of the obstacles faced along the way.
To remain properly flexible, you need to have a broad range of options on hand. For example, at C.H. Robinson, we assist our clients through our suite of global services. We use a diverse array of services to ensure that our clients are supported, no matter the situation. For instance, when approaching ocean shipping, we leverage full container load (FCL) and consolidation less than container load (LCL) ocean services to create a diversity of options for our customers. Not only does this allow them to choose the option they desire, it also provides them with alternatives should anything unexpected occur.
We have yet to even see the full range of effects that this mishap will have on the global supply chain, but it has proven that any incident in the supply chain ripples out to points all across the globe.
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