I often struggle to make the complexities of international supply chains interesting during social gatherings. Even when I produce my company’s designed animations and charts, my passion is often met with polite nods and people changing the subject.
But now I have a story of international intrigue, spiking world financial markets, and a global commodities (sand) storm of Hollywood proportions.
An Empire State Building-sized container ship contracted through a Japanese owned Taiwanese cargo company crewed by Indian sailors is wedged catty-corner in Egypt’s Suez Canal.
The ship, the Ever Given was being piloted by local Egyptian marine experts when it was subjected to a sandstorm-high wind event grounding the 200,000-metric ton behemoth. Eight large tugboats and digging equipment have been at work to free the ship, but it won’t float.
And now, one of the world’s most satellite photo-driven supply chain back-ups is on display with over 100 other vessels on either side of the stuck ship unable to pass through the canal.
How did this get so bad?
The sandstorm and water conditions in the Suez are certainly acts of nature. Even the best pilots – one could argue that maybe these weren’t the best – can misjudge the weather when under a tight deadline.
The problem speaks to global modernization infrastructure needs. The 152-year old Suez Canal is one of the world’s most important waterways providing quick and usually efficient passage between Asia and Europe. The ship was traveling between the Chinese manufacturing port of Shenzhen to the Netherland’s crown jewel of shipping and commerce, Rotterdam.
The only other way to make the voyage is around Africa and the Cape of Good Hope. Sailing around the African continent has always been a long and brutal journey going back to Vasco de Gama and Bartolomeu Dias. Today, ships rerouting can expect an extra two-weeks sailing time – without pirates.
The Ever Givens’ blockage caused a surge on the world oil market as investors debated what it would cost the world. But the ripple is even greater. The Ever Given can hold 20,388 teu containers. A teu or twenty-foot equivalent unit can each hold 9-11 pallets of goods. Someone is waiting for the goods on those pallets. There are manufacturing and delivery deadlines to be met. Not to mention the other 100+ ships also with large loads and their waiting customers. Those ships could back out and go around but that would add weeks to the delivery time. We don’t know what those containers contain, but if any of it is perishable, we can only hope the ships have proper storage.
There are the direct costs to missed deadlines and contracts, not to mention repairs to be made to one of the largest shipping routes in the world. Costs in the billions.
Surgere has a lot of solutions to solve for supply chain problems. This one is beyond our scope. But we can use this global cluster frolic to talk about a few important supply chain needs.
- The need for modernization. The Suez Canal and the Panama Canal along with many important global transportation waterways were built over a century ago. Today’s transportation no longer fits. Our ships are bigger. Our eyes are bigger than our stomach. Companies that upgrade and modernize can better weather a supply chain and logistic crisis. The ability to see your stuff and know where it is in transport and know what condition your goods are in, can allay worries and allow for redirection and changes in workflow. Digital modernization matters.
- Communities need to work together to solve supply chain issues. Fixing the width and depth of the world’s largest canals is a geopolitical issue. But on a local level and even globally, how companies communicate and monitor their inventories can improve everything.
If you want to know how Surgere can help modernize your supply chain and build an efficient, profitable, and environmentally sustainable community, give me a call. I have more stories, ROI numbers, and over 2000 locations in North America to talk about.