Suez canal : which lessons from the blockage ?
“”We can celebrate the success of the release of the ship and the unblocking of the Suez, but this is not the end of the story here,” said Douglas Kent, executive vice president of strategy at the Association for Supply Chain Management.
“Certainly it will continue to clog the ports and other delivery mechanisms as a result, and then of course the chaos that disrupts afterwards,” he added.
According to experts the consequences of this blockage will continue over time.The subject of Ever Given has been covered at length, let’s talk instead about what it tells us.
Between covid-19, the container shortage and now this one, the lessons of the last few months have been many.They can all be summarized in one sentence: extended supply chains are a risk
As we know, the key factor in the choice of supply is obviously the price of the product and it is well known that China and Asia often defy all competition in this regard.
However, if we take into consideration the transport costs, customs duties, but also (as we have seen) the risks of disruptions, it may be more interesting to source closer, pay a little more for the product but increase its margin by having more advantageous customs duties and reduce its delays and transport costs.
Let’s take for example the customs issue: it is possible that by importing the same product not from China but from Africa for example, the final cost of your product (transport and customs duty included) can be lower than by importing from China.
Generally, most of the products coming from China have higher duties while there are many free trade agreements for countries closer to Europe, so you would be importing from closer countries, which means not only a reduction of time and transport costs, but also a healthier impact on the environment. A shorter supply chain would mean a much faster container turnaround, avoidance of bottlenecks such as Suez or Panama, and also a better flexibility in adapting to demand.
Short supply chains are therefore an alternative to be seriously considered, and consumers are becoming more and more sensitive to it.
