Brian Alster, general manager of third-party risk and compliance with Dun & Bradstreet, shares the firm’s research on the continuing global impact of the Suez Canal blockage by a giant containership.
Coming on the heels of the COVID-19 pandemic, the blockage was “another reminder of the challenges that companies have to face, and the need to make sure they mitigate risk in their supply chains,” Alster says.
The United States and Western Europe were the regions most affected by the disruption, Alster says. The latter experienced shortages of critical components such as vehicles, plastics and electronics materials for manufacturing. In the U.S., affected items included high-end kitchen and bathroom linens, construction materials, rubber, electrical items, some pharmaceutical supplies, and vehicle parts and accessories.
The automotive industry was already suffering from a shortage of semiconductor chips, caused in part by a surge in demand for consumer electronics. The impact was especially felt due to the sector’s reliance on just-in-time supply of parts to the factory, and the minimization of inventory. “In this current environment, they’re almost having to reverse that — to find ways to stock certain critical components to avoid the complete shutdown of plants,” Alster says.
More than 350 ships were said to have been affected by the Suez Canal blockage, and it will take weeks to alleviate the queue. Meanwhile, major U.S. ports are already suffering from heavy congestion and delayed ships due to unexpectedly high demand for imported consumer goods.
In response, Alster says, companies and governments are looking to diversify sourcing of key materials, with the goal of near-shoring or on-shoring critical goods that have been exclusively produced in Asia. Such moves could result in permanent higher costs for global supply chains intent on mitigating the risk of future disruptions.
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