Suez blockage threatens increased risk of cargo theft and other disruption: TT Club

Global supply chains face an extended period of disruption, including an increased risk of cargo theft, following the blockage of the Suez Canal by the Evergreen container ship, Ever Given.

That is the view of TT Club, the independent provider of mutual insurance and risk management services to the international transport and logistics industry.

Global supply chains had already been strained by the disruption caused by the COVID-19 pandemic, when Ever Given blocked the canal that carries 30 percent of the world’s container cargo each year. A reported 300 ships were delayed by the blockage, while others were re-routed via the longer passage around South Africa’s Cape of Good Hope.

The blockage has now been cleared, but the arrival of large volumes of laden containers, coupled with the requirements for hinterland distribution, will create disruption at ports and terminals, TT Club warned, straining throughput and yard capacities, and creating accumulation of cargo.

Mike Yarwood, TT’s managing director for loss prevention, said that the full scale of the disruption will only become clear once delayed cargo starts arriving at its destination. “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,” he said.

He added: “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.”

Meanwhile, driver shortages, especially in Europe, are expected to soar in 2021, as highlighted by a recent International Road Transport Union (IRU) survey, further exacerbating supply chain problems.

Yarwood argued the implications of both the COVID-19 pandemic and the blockage of the Suez Canal could force companies to completely rethink the way they manage their supply chains, which have become increasingly streamlined in the last ten years.

“Such measures have included reducing the number of suppliers and introducing ‘just in time’ principles to lessen the burden of unnecessary inventory costs,” he explained. “Experiences over the last twelve months through the pandemic, the Brexit transition and more recently the Suez Canal blockage, bring into question this bias towards efficiency and cost reduction. If such are achieved at the expense of resilience, is this policy the correct one?”

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