Future-proofing after Suez Canal incident

摘要

The Suez Canal incident highlights the impact a bottleneck can have on the whole supply chain - and the need to boost contingency plans in future.More than 300 vessels were held up due to the incident. Cleaves Shipping says these included 83 container vessels queuing up on 28 March 2021.As of mid-April, cumulative delays caused by the Suez Canal closure for cargo ships were expected to be 1,017 days, according to supply chain visibility company project44.Ports are already struggling with congestion - particularly on the US west coast - as a reaction to the situation caused by the Covid-19 pandemic, making this extra challenging.Thankfully, this type of incident is extremely rare - this is the first time the canal has been closed since the Six-Day War between Egypt and Israel brought about its closure between 1967-1975, and the Canal has an excellent safety record.Nevertheless, 10% of global trade passes through the Suez Canal (source: Allianz Global Corporate & Specialty). That, combined with the fact that 1.9M TEU of cargo was caught up in the Ever Given incident, plus the knock-on impact of delays and congestion, means that all elements of the supply chain should formulate plans to mitigate the impact should a similar incident happen in future.