2017 has been a year for headline-grabbing disasters, both natural and man-made. Typhoons and hurricanes ravaged the Atlantic, Pacific, and Caribbean coasts. Equifax suffered the largest data breach in history, involving millions of records. FedEx’s European-based TNT Express division suffered a ransomware attack that significantly impacted its operations in June.
These events have impacted supply chains around the world, with many more such events likely in store. So, what can you do to manage your risk and disaster-proof your logistics plan?
In logistics, disaster-proofing means the ability to move your shipments regardless of challenges with your preferred carrier or changes to the business landscape. It requires access to information and a strategy to respond to events that might disrupt your ability to deliver products to their destinations on time.
PRECISION allows you to disaster-proof your logistics by providing:
The first step to disaster-proofing your business is to understand the different types of risk your business can face. There are two broad categories of disaster risk that businesses tend to face: natural and man-made. Let’s look at them in more depth.
Natural disasters can occur in any region of the world at any time, causing shipments to be severely delayed, damaged, or lost. And as weather patterns change, it’s becoming harder to predict where your supply chain may be at risk next.
How can natural disasters impact your business? These recent events illustrate the importance of disaster-proofing your supply chain:
The Icelandic Volcano – In April 2010, Iceland’s Eyjafjallajokull volcano erupted, spewing ash miles into the air and disrupting the movement of parcels and packages to and from the northern European airports that handle approximately 81% of Europe’s air cargo. With planes unable to cross the Atlantic for more than a week, supply chains in a variety of industries were impacted, among them European automakers that were forced to cut production due to shortages of parts that couldn’t be shipped to the manufacturers that needed them.
The ash-cloud didn’t completely shut down European air traffic, however. Airports in southern Europe remained open. Some shippers were able to work around the shut down by rerouting their shipments to those airports, but doing so required insight into alternate modes and carriers that could move those packages; insight that PRECISION Multi Carrier Shipping provides.
Hurricanes and Typhoons – In 2017’s extremely busy hurricane season, Hurricane Harvey and Typhoon Hato have been particularly notable in terms of their supply chain effects. Harvey dumped more than 52 inches of rain on Houston in late August, shutting down freight, cargo, and air travel in and out of one of America’s busiest port cities. A study by ISM found that 67% of supply chain managers believed Harvey significantly impacted material costs; 75% believed it impacted deliveries.
At the same time Harvey was bearing down on Texas, Hato struck Hong Kong and shut down cargo shipments into and out of South China’s production and shipping hubs. Weather events like Hato that occur in less developed parts of the world can be especially challenging for global shippers, given that unlike disasters that strike North America or Europe, there are fewer options to reroute those shipments. Without insight into alternate carriers and modes serving the region, shippers are at the mercy of the weather.
PRECISION Multi Carrier Shipping helps organizations keep global shipments moving regardless of what’s happening in the air or on the ground—whether it be hurricanes, typhoons, earthquakes, or volcanic eruptions. By implementing a multi carrier shipping solution, organizations can mitigate risk by having other channels to distribute your parcels should the unexpected occur. With visibility into each shipment’s location and access to hundreds of regional carriers and multiple modes of transport, PRECISION allows logistics managers to quickly and easily research alternatives and reroute shipments around the globe.
Human-created problems may be an even greater risk for today’s globally linked, tech-dependent logistics operators than nature’s fury. Geopolitical concerns such as Brexit, escalating tensions with rogue regimes, and cyberhacking that targets critical infrastructure and carriers are just a few of the man-made challenges impacting global supply chains. Here are a few examples:
Geopolitical Unrest – As Britain untangles itself from the EU following last summer’s Brexit vote, shipping between the UK and Europe is set to become more complex and challenging. While the final outcome of Brexit negotiations is still unclear, there is a significant chance that UK exporters will no longer be able to handle shipping to Europe as a single entity. Rather, they will have to follow the import regulations of each individual nation; additional regulations, documentation, tariffs, duties, and taxes will apply. Some UK companies may open new distribution centers in Europe so that they can export once, rather than to each the 19 Eurozone nations—a decision that reduces complexity but brings significant additional cost.
PRECISION Global Trade Management offers a more cost-effective alternative. It can help UK shippers streamline processing of export paperwork, estimation of tariffs, and other requirements. For some, these benefits could eliminate or at least postpone the need to open new DCs. With access to real-time, updated documentation for every country in the EU, PRECISION helps shippers more easily manage multi-origin, multi-destination shipping.
Europe isn’t the only region facing geopolitical challenges. In Asia, escalating tensions with North Korea are prompting some logistics organizations in South Korea to consider diversifying their distribution networks to other hubs in the region, such as Singapore or Shanghai. PRECISION Multi Carrier Shipping provides the intelligence and reporting to support these decisions, along with access to a global carrier network so that no matter what the future brings, your business can adapt and thrive.
Cyber-Disasters – Supply chain cyber-disasters are also becoming more common and more damaging. Last summer’s “NotPetya” ransomware attack on European carrier TNT illustrated the risk of cyber-attacks for today’s technology-dependent carriers. The attack, which affected more than 2,000 organizations and individuals worldwide, caused the carrier’s parcel shipments to be delayed for as long as six weeks as TNT struggled to recover from the attack and was forced to handle parcels by hand in many of its facilities.
PRECISION Multi Carrier Shipping limits the effects of cyber-attacks by delivering access to rates, routes, and delivery service options for carriers and modes of transport serving every major destination and region. You can easily compare costs to reroute your shipments to unaffected carriers and keep the flow of goods moving seamlessly and cost-effectively to their destination.
PRECISION helps organizations disaster-proof their supply chains by providing access to the information and options they need to recover from and respond to disruptions like these, quickly and cost-effectively. With PRECISION, shippers everywhere can continue delivering goods to market on time and maintain high levels of customer satisfaction, no matter what disasters the future may bring.