Ongoing tensions in the Red Sea. Hurricane Milton baring down on the Florida Coast. Chinese Golden Week. US Port strikes.
These are all global events that have occurred in recent weeks that would have, in some way, impacted shipments heading to Australia, despite the fact that none of them took place even remotely near us.
But why?
Because the global supply chain takes no prisoners.
Advancements in technology mean we’re more globally connected than ever before, whether it be in our personal or professional lives, or even in the way in which we consume various goods and services.
We can have teams of people working remotely in other countries, or order goods from the other side of the world and have them delivered to our front door – so the idea of being globally connected is not new.
Yet all too often businesses and consumers are caught out and confused as to how issues in the supply chain in other parts of the world can affect us here at home.
We’re all familiar with the domino effect – that being how one event sets off a chain of similar events – and the same is true in international freight and logistics.
A Hurricane in Florida that causes Ports to close impacts the schedules of vessels, which in turn sees them arrive at their next destination late and so on, until a decision will be made about how to get that ship back on schedule.
Will it omit the Port where your goods are waiting to be picked up, meaning your shipment is now delayed? Will it opt to pick up only some cargo at a Port due to time constraints and only half of your shipment arrives? Will it opt not to pick up any containers after it’s unloaded, meaning your export goods are still sitting idle and suddenly you have a customer waiting empty handed?
These are very real scenarios that we see play each and every day.
The other factor that plays a role is the overall efficiency of the supply chain.
We’ve highlighted previously that when all aspects of the supply chain are running smoothly, global shipping can be a fast and efficient process that operates quietly in the background to move items around the globe.
The problem is, over time we have created a system where productivity is maximised to the point where there is now little to no wiggle room.
Rather than creating schedules and estimated time frames that have some margin for error, the supply chain is increasingly operating under ‘best case’ scenarios that require all elements to be operating on time and as expected.
Some might suggest this is driven by companies looking to maximise profits and while there is likely some truth in this, it’s also driven by the consumer.
Global connectivity and the instant-gratification nature of digital technology means consumers have increasingly high expectations on how long it should take for their goods to arrive (spoiler alert: they want it yesterday!).
Unfortunately, it means that when things don’t go to plan – for whatever reason – the disruption is often far more widespread and can linger for weeks or months afterward as the supply chain struggles to right the dominos once again.
We saw this play out recently with the congestion at the Port of Singapore, with delays there impacting shipping routes right around the world and taking months for the backlog to clear.
It was a situation that saw many consumers asking why they were impacted, when their goods weren’t even transiting through that Port.
However, in truth, it really doesn’t matter which way your shipment is travelling, or where it’s travelling from, a disruption along any part of the supply chain will have a domino effect to some degree.
For the most part, the experienced professionals in the sector are able to catch the dominos before too many are knocked down, but occasionally the ripple spreads further and the impacts are more widespread, leaving consumers looking at empty shelves asking, ‘why me?!’.