Supply Chain Challenges will Continue to Get Worse as Time Goes On
Recent news paints a bleaker picture for supply chains. This week the Houthi rebels released a video of a ship being hit in the Red Sea again to keep this threat in the news.
Diverting ships round the Cape of Good Hope means longer voyages, higher shipping and insurance costs. Recently, weather round the coast of Southern Africa has deteriorated due to climate change. A large container ship was hit by a bad storm on the coastal passage and 40 containers were swept off the ship and lost. Imagine if that loss was all retail product.
Climate change is causing sea levels to rise along with more flooding, meaning the gaps between sea surface levels and bridges they have to navigate under are getting smaller and will potentially impose restrictions on how high you can stack containers on ships.
Maersk, a leading shipping company, is now transporting goods between Panamanian ports using 50 miles of railroads to avoid the canal.
With all these challenges, some completely unpredictable when planning shipping, re-visiting sourcing options is a major priority and having the visibility of challenges in real time is critical to maintaining availability on the shelf, minimising costs and delivering acceptable customer service levels.
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Posted by Brian Hume
19th July 2024
