Every Procurement Manager’s Nightmare
The Advantage of a Domestic Supply Chain
This Wall Street Journal headline said it all: The Suez Canal crisis has sent shipping lines scrambling for alternatives.
On March 23, the Suez Canal was blocked by a 200,000-ton cargo ship, backlogging more than 400 ships. The ripple effect of this incident impacted more than the Suez Canal – including shippers utilizing other international ports.
That’s bad news for procurement professionals – wherever they operate.
Here are a few factors to understanding how this six-day closure impacted the global supply chain:
- Backed up vessels and cargo did not arrive on time at other connecting ports in Europe and elsewhere. When they did arrive – this backup caused congestion, slowing down already delayed schedules. This threw ships out of their normal pattern of travel. They did not dock where they should have. They did not unload and pick up empty containers – which were in dire need by Asian producers. This reduced global capacity. This resulted in the ripple effect of increased pricing all along the supply chain.
- It compounded pre-existing congestion problems. Beginning in late 2020 major ports on the American west coast were swamped by rising imports in shipping from Asia. This slowed down ship capacity and containers.
For these reasons, this Suez shipping catastrophe is every procurement manager’s nightmare. Many manufacturers in the United States want smarter alternatives, like supply chain resources that do not rely on international shipping.
Other shipping disruptions happen all the time. For instance, severe storms impact both cargo ships and port operations. Obviously, turbulent seas can delay ships. But it doesn’t stop there.
Much US freight activity ground to a halt in February, 2021 when Winter Storm Uri hit. Texas was hit the worst, knocking out power for more than 4 million homes and businesses for days. Ports shut down and so did transportation at the U.S.-Mexico border. This brought freight transportation to a near-standstill, causing delays in port loading and unloading. This further congested ports, causing costly scheduling and shipping delays.
Inconsistent Shipping Is Costly
This one-two punch of human error and/or bad weather explains why many American procurement decision makers can no longer afford the costly inconsistency of international shipping. They are returning to the simplicity of sourcing products manufactured and shipped in the continental United States.
For many, gambling on the reliability of global shipping is not worth the risk: Their competitive landscape is fierce. Deadlines are tight. Lead times constantly shrink. Just-in-time delivery of components (like tubing to meet the urgent demands of the medical industry) can make even short delays a threat to production.
Reduce Risk – Plan Smart
Why gamble only to lose money – or sleep – when the smarter business decision is to secure domestic shipping from Ohio-based Kent Elastomer Products (KEP). Talk to KEP. Our advantage is much more than being a midwestern domestic resource for American-made rubber latex tubing to high-quality thermoplastic and PVC tubing, dip-molded products, and non-latex Free-Band® tourniquets.Tell us about your projects and product, and we’ll demonstrate how our experience, partnership, and service will help you manage your supply chain with less risk and more confidence.
The coronavirus is just one more in a long list of global sourcing disruptions Everything from Modern Tire Dealer to the New York Times report the severe impact of the coronavirus on Chinese business retail and manufacturing – and its effect on the global economy....