The first annual Risk report from supply chain risk management company Resilience360, released in March, outlines the Top 10 Supply Chain Risks for 2019. Today, Resilience360 released an outline from the report of the the major supply chain challenges from 2018 and analyzes their impact. The 2018 Annual Risk Report presents an overview of the main disruptive events that affected supply chains around the world. The findings presented are based on the re-inspection of the alerts issued by Resilience360 across various categories including, though not limited to, natural disasters, industrial action, maritime disruptions, industrial fires, environmental hazards, and security occurrences.
"A look back on 2018 shows how the risk landscape has evolved in these 12 months," said Tobias Larsson, chief executive officer, Resilience360. "Changes in long-established trade practices, extreme weather patterns, maritime delays, rising fuel prices, cargo theft, and industry zone shutdowns triggered by environmental policy measures have all shaped the way we have come to view supply chain disruptions today."
Below is a short outline of some of the most disruptive impacts to supply chains in each region of the world in 2018. For an expanded analysis, please download the full Resilience360 Risk Assessment report at https://www.resilience360.dhl.com/resilienceinsights/resilience360-annual-risk-report-2018/
Notable 2018 Incidents/Impacts:
January- Powerful storms cause rail and air traffic disruptions across Europe: In early and mid-January, storms Eleanor and David caused more than USD 2.86 billion (EUR 2.5 billion) in damages to transportation and infrastructure across Europe. Rail services were halted for an entire day in Germany while hundreds of flights were canceled at key European airports, including London, Amsterdam, and Paris.
March- United States Tariffs: On March 8, President Trump signed two orders imposing duties of 25% on all imported steel and 10% on all imported aluminum. According to the Office of the United States Trade Representative, these tariffs prevented the entry of USD 50 billion (EUR 43.6 billion) worth of Chinese steel and aluminum.
June- Nicaragua political crisis significantly disrupts road freight transportation: Demonstrations against the government of Daniel Ortega across Nicaragua impacted ground freight transportation during May and June and impeded the navigation of domestic routes and cross-border commerce. Industry sources reported on June 13 that only 8% of expected shipments were able to cross borders at the peak of the crisis.
July- India truckers' strike disrupts logistics movements nationwide: A nationwide truckers' strike called by the All India Motor Transporter Congress started on July 20 and was called off after 8 days. The strike, held over cuts to levies on diesel fuel, disrupted the production and sale of vehicles in the country and affected deliveries for e-commerce firms such as Amazon.
September- Typhoon Jebi causes multiple factories to cease operations in Japan: Transportation services across Kansai and Shikoku regions in Japan were severely disrupted following a powerful storm on September 4. Factories across industries such as automotive, heavy machinery, semiconductor and electronics halted production temporarily. Container yards at Osaka and Kobe were also briefly affected.
September- Cargo handlers go on strike in Colombia: A freight transporter strike launched at the beginning of September at the APM's TCBuen container terminal of the Port of Buenaventura resulted in dozens of container ships stranded at sea and incurred daily losses of over 1,682 million pesos (USD 542,000; EUR 472,000). The strike ended on September 21 after successful negotiations between the port workers' labor union and APM Terminals.
November- Migrant Caravan through Mexico: On November 25, a security incident at the San Ysidro border crossing impeded the flow of cross-border rail traffic from Mexico to the United States. The Central American migrant caravan had overwhelmed local police blockades in Tijuana and had proceeded to the rail cargo crossing area. Reports of the caravan indicated increased incidents of migrants using rail transport to reach the border.
November- Yellow Vests protests across France: In November and December, a grassroots movement branded 'Yellow Vests' caused widespread disruption across France. Disruptions occurred at more than 2,000 locations, including at bridges, border crossings, industrial sites, and key container ports such as Calais, Le Havre, and Fos-sur-Mer, with total estimated losses of up to USD 5.03 billion (EUR 4.4 billion).
December- Libya's National Oil Corporation declares force majeure: Libya's National Oil Corporation declared force majeure on December 10 after armed protesters forced a production halt at the country's largest oil field. Production has not yet consistently returned to normal as looting has taken place on site and new security measures have not yet been deemed sufficient. Revenue losses are estimated at USD 32.5 million (EUR 28.36 million) per day.
"Modern supply chains are vulnerable. Transportation delays, theft, natural disasters, inclement weather, cyber-attacks and unexpected quality issues can disrupt cargo flows, creating short term costs and delivery challenges," said Shehrina Kamal, director, Risk Intelligence, Resilience360. "Resilience360 strives to understand these risks and gain a common understanding of how they impact supply chains across countries, regions, industries and organizations in measurable ways."
DHL Resilience360 is a unique supply chain risk management solution built on four sophisticated products: Supply Chain Visualization, Risk Assessment, a near real-time Incident Monitoring solution, and Risk Response with dedicated control towers that can actively respond to incidents and manage business continuity.