Suez canal blockage latest in catalyst of events affecting the supply chain
Technology services provider Probrand is urging IT buyers who have goods in transit affected by the Suez canal blockage, to make contingency plans now.
The 400m container ship has been stuck across the Suez canal for almost a week and, while it has been partially freed this morning, there remains a significant backlog. This key trade corridor carries approximately 12% of all global trade and offers a crucial shipping line between manufacturing hubs in Asia and the European market.
The news is a blow for the IT supply chain which was already facing a severe stock shortage due to the ongoing impact of the pandemic, semi-conductor shortages and the aftermath of Brexit. With the majority of technology goods coming from Asia, it’s crucial that organisations locate their shipment’s current whereabouts and start to look at alternative supply options.
Ian Nethercot, supply chain director at Probrand, said: “Organisations should already be on the phone to their suppliers to find out where stock is and if it’s been affected – and, if it has been, they need to make contingency plans now. For example, can any mission critical equipment be sourced from the US? In unique circumstances, suppliers may also be able to locate ringfenced stock.
‘‘Consider also, that this state of limbo may affect any invoices businesses were hoping to cash before the financial year end. With many of these now held up, it’s worth reviewing whether spend can be reallocated or moved around accordingly.”
Ian adds: ‘‘Buyers must resist the urge to simply wait and see what happens. Even though the ship has now been freed from the shoreline, a huge amount of uncertainty will remain. When cargo starts moving again, we should still expect congestion and disruption as goods are unloaded at port. Products may arrive in the country but it could still take weeks to get your hands on them.’’