Supply chain risks under review after Suez canal blockage
At the end of last month, the Suez Canal in Egypt became blocked after one of the largest container ships in the world named the 'Ever Given' became grounded, blocking the waterway for almost a week.
As a result, this had several impacts on society, including affecting global supply chains, as goods stored in other ships were not able to continue their journey.
The canal, whilst having been recently reopened, is still presenting some issues, as 300 ships have reportedly been delayed and are awaiting the green light.
Other ships have been re-routed, taking a much longer way around South Africa's Cape of Good Hope.
International freight transport and logistics insurer, TT Club is now alerting supply chain operators to these impacts and is warning them of the consequences that these types of events can have on the supply chain industry.
Mike Yarwood, Managing Director of TT Club, commented on the effects of the incident, saying: “Beyond the delay to cargo on board those ships affected, there will inevitably be a knock-on impact for those involved in discharging the containers at destination ports when they finally arrive, as well as the final mile delivery carriers.
“While the immediate impact may be a lack of cargo arriving when expected, presenting market supply challenges, it is when the cargo does start to turn-up that further potential risks emerge,” he said.
The disruption has in part been created by a large number of full containers, along with hinterland distribution requirements, which is placing strain on yard and throughput capacities, as well as causing cargo to build up.
Mr. Yarwood also points out that this could see theft at ports and freight depots increase, leading to the need for tighter security in the affected areas, warning supply chain operators to be diligent.
He said: " The risk of theft at ports and freight depots in this scenario is heightened and a greater focus on security is required.
"Whether it simply be at an overspill holding or storage area, or temporary warehousing, wherever and whenever cargo is not moving, it is more likely to be stolen.
"Those active in the supply chain should be mindful of these security risks. Due diligence, undertaken to ensure that any third party provider of storage is adequately resourced to meet these demands, is a prudent step to take in these circumstances," commented Yarwood.
This is an example of the butterfly effect, which is an on-going series of events that affect each other one-by-one, resulting in either good or bad consequences.
Furthermore, the consequences look set to continue, as a shortage in the number of delivery drivers is expected to increase this year, as found in a recent International Road Transport Union (IRU) survey, meaning cargo shops will be relied upon to transport goods.
Summing up the events that led to the risks to the supply chain industry, Mike Yarwood said: "The new normal might see many stakeholders increase their focus on contingencies and adopt more a ‘just in case’ philosophy than a ‘just in time’ one.”
UK Food Supply Chain to be Exempt from COVID-19 Isolation
Vital workers in the UK’s food supply chain will be exempt from isolating after contact with COVID-19 under new emergency measures announced by the British government.
More than 10,000 people working in supermarket distribution centres, manufacturing plants and other food logistics services will be affected by the initiative. Staff who are told to isolate by test and trace or are notified by an official app will be allowed to continue working as long as they test negative.
The Department for Environment, Food and Rural Affairs said the scheme would undergo a limited trial this week after consultation with the country's biggest food retailers. It plans to extend the measures through a wider roll out next week, impacting around 500 sites dedicated to stocking supermarkets and producing staple foods such as bread and milk.
“Food businesses across the country have been the hidden heroes of the pandemic,” said Environment Secretary George Eustice. "We are working closely with industry to allow staff to go about their essential work safely with daily testing.”
Speaking to Sky News, Eustice added that the exception would not be extended to other sectors.
"The reason we have made a special exception for food is for very obvious reasons,” he said. "We need to make sure that we maintain our food supply. We will never take risks with our food supply."
UK Supply Chains Under Strain
The news follows reports of empty shelves and widespread shortages in British supermarkets after a record number of people were told to isolate via the NHS app. Branded the ‘pingdemic’, more than 600,000 alerts were sent out to phones and mobile devices in the week beginning 8 July, warning people that they had come into contact with those infected by the virus.
It left already strained food supply chains under staffed and unable to cope. The mass alert has also caused disruption in other supply chains, exacerbating a prevailing shortage of drivers and other essential logistics professionals.
Savid Javid, the Secretary of State for Health and Social Care, who was appointed last month following the departure of MP Matt Hancock, said: “As we manage this virus and do everything we can to break chains of transmission, daily contact testing of workers in this vital sector will help to minimise the disruption caused by rising cases in the coming weeks, while ensuring workers are not put at risk.”