2.🔊 A team of data and analytics experts from Dun & Bradstreet and E2open (a supply chain software company) analyzed the impact the crisis will have on businesses in different parts of the world. Their conclusions are based on annual shipping data that tracks the vessels and materials found onboard ships that travel through the Suez Canal.

3.🔊 The two companies found that “Europe is the region that will feel the strongest impact due to the blockage of the canal. Companies located in Asia will be impacted not only by the delay of shipments from Europe, but also by a shortage of empty containers returning to their region—further stalling their abilities to deliver goods around the world.”

4.🔊 Dun & Bradstreet took a deeper dive into the data for the U.S. and Europe, and found the following.

U.S.

The top 10 industries that will be impacted by the crisis are:

• Grocery stores
• Department stores
• Auto and home supply stores
• Hardware stores
• Surgical and medical equipment suppliers
• Plumbing heating and air-conditioning
• Semiconductors
• General warehousing and storage
• Trucking
• Sporting goods

5.🔊 Europe

The countries most impacted are:

• United Kingdom
• Germany
• Belgium
• France
• Netherlands
• Italy
• Switzerland
• Spain
• Turkey
• Austria

6.🔊 The top industries in Europe that will be most affected by this incident include: eating and drinking establishments, construction, wholesale trade, chemicals and allied product-related businesses, health services, food retailers, industrial and commercial machinery and equipment, metal production, and automotive repair services.

Supply Chains

Ripple Effect

7.🔊 According to Brian Alster, general manager for third party and risk and compliance for Dun & Bradstreet, the ripple effect from the grounded container ship “… will have continued ramifications for global supply chains in the weeks to come as global trade resumes, goods start to be unloaded at destination ports and suppliers look to replenish shortfalls in essential materials that threatened downstream production and manufacturing of consumer goods.”

A Global Phenomenon

8.🔊 “The disaster of the moment becomes a global phenomenon because it is yet another reminder of the interconnectedness that comes with globalization and our reliance of each other as contributors to the global supply chain,” Alster said. “Companies have developed a higher level of dependency on suppliers and third parties from other countries, and that dependency is highlighted when a link in the supply chain is  impacted,” he observed.

9.🔊 “The Suez Canal incident gives us yet another reason for businesses to invest in data and technology to create an agile, geographically dispersed supply chain that can quickly pivot during unexpected events,” Alster said.

Financial Consequences

10.🔊 “While considerable attention has focused on the economic value of cargo trapped on vessels and their inability to move through the Suez Canal, the financial impacts on downstream production that depend on the timely delivery of these materials is magnitudes greater,” noted Pawan Joshi, executive vice president of product management and strategy for E2open. “For instance, the delay of an inexpensive but crucial automotive part en route from China can prevent the sale of the entire vehicle in Germany.

11.🔊 “The ability to peer inside containers, understand downstream business impacts of transport delays and systematically take corrective actions, provides a distinct competitive advantage for global businesses,” he said.

Discussion

1.🔊 What do you think is the best strategy and perhaps even alternative moving forward for the logistics industry which relies so heavily on the Suez Canal? 

2.🔊 What details can you give as to the nature of the supply chain in your industry or workplace? 

• What are the greatest necessities to your workplace functioning? Where does it come from?

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