As the shipping industry takes stock of the collateral damage of the Suez Canal blockage – from cargo delays and the impact on hinterland distribution to container imbalances, particularly on east to west routes - international freight transport and logistics insurer TT Club has warned of a heightened risk of theft at ports and freight depots.
“Greater focus on security is required," says Mike Yarwood, TT’s managing director, loss prevention.
“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. Those active in the supply chain should be mindful of these security risks. Due diligence, undertaken to ensure that any third party provider of storage is adequately resourced to meet these demands, is a prudent step to take in these circumstances.”
Yarwood points out that the last decade has seen many in the supply chain driving towards streamlined and operational efficiencies. “Such measures have included reducing the number of suppliers and introducing ‘just in time’ principles to lessen the burden of unnecessary inventory costs,” he adds. “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? The new normal might see many stakeholders increase their focus on contingencies and adopt more a ‘just in case’ philosophy than a ‘just in time’ one.”
According to the insurer, blockage of the Canal, which carries 30% of the world’s container cargo each year, resulted in a delay to 300 ships, while many others were re-routed via the longer passage around the Cape of Good Hope.