Lessons from the Suez Canal and Other Supply Chain Disruptions
Some of the most challenging issues for Canadian importers, distributors, sellers of goods, and manufacturers are the risks associated with the flow of goods. Recent news of a now-freed container ship blocking traffic through the Suez Canal has again brought attention to supply chains and the types of disruptions that impact global trade.
Global pandemic, blocked international trade routes, natural disasters, trade sanctions – If the current environment has taught us anything, it is that one unexpected disruption in a supply chain has ripple effects across the entire chain. These disruptions are agnostic to industry, equally impacting retail and consumer markets, manufacturing, oil and gas, infrastructure, power and energy, and more.
Despite the challenges, there are opportunities to better position for recovery and improve business practices. Below are five key points to keep in mind.
Top 5 Supply Chain Risks
- Border Delays – Assistance with a risk-based approach to controlling delays at the border, and facilitating strategic entry points can support more efficient flow of goods.
- Transportation and Customs Issues – Develop a fluid transportation strategy that is reactive to potential shutdowns, and take advantage of duty deferral opportunities at the border, which will help save costs on imported products.
- Non-Essential Sourcing – Review domestic and foreign inventory supplies and consider implementing contractual strategies to either exit non-essential product sourcing, or to find alternative sources of supply to supplement procurement and sourcing.
- Sole Sourcing – Relying on one source of supply is often a risky proposal. Make trade diversification an essential element of your procurement strategy. A supply chain review can result in meaningful cost savings and revenue increase.
- Antitrust Matters – Revisit opportunities and mitigate potential antitrust risks associated with supply chain management practices, such as exclusivity provisions, MFN clauses and other distribution and pricing terms to maximize benefits for both your business and your customers.
If you have specific concerns, we’re here to help. Please give us a call.