Global Logistics: Asia Pacific’s challenges and opportunities in market integration

By Patrick Burnson, Executive Editor
September 01, 2012 - LM Editorial

Look before you leap
Given the recent history of supply chain disruption in the region, U.S. shippers seeking to enter the Asia Pacific markets are advised to proceed with caution. Just when automobile factories had begun to recover from the Japanese tsunami in 2011, the high-tech sector took a huge hit when Thailand was dealing with catastrophic flooding.

This year it was India—Asia’s third largest economy—that gained the spotlight and added scrutiny of risk mitigation analysts. That nation’s massive power outage this past summer should serve as “wake up call” for many multinationals, says analysts.

The power grid failure can have a ‘domino effect’ on businesses, communications and IT systems,” says Linda Conrad, director of strategic business risk management for Zurich Services. “Furthermore, this will weaken supply chain infrastructures including all forms of transportation, which could have a major affect on multiple industries.”

With emergency workers and energy professionals still searching for clues to India’s electricity grid collapse, logistics managers should consider risk mitigation strategies now, says Conrad. “As we learned from natural disasters in Japan and Thailand, the ripple effect can be devastating on second- and third-tier suppliers,” she says. “Companies that are over-exposed in India now might consider some supply chain alternatives for 2013.”

Conrad notes that many countries including the U.S. outsource call centers and IT services to countries like India. She says an outage like this can cause serious damage to businesses that rely on those services such as hotel chains and technical support. “It should also give us pause to consider what might happen if a similar shutdown occurred if there was a terrorist attack on India’s power grid. The situation might be even worse.”

image


About the Author

image
Patrick Burnson
Executive Editor

Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Panjiva, an online search engine with detailed information on global suppliers and manufacturers, recently said it is opening up the “vault,” so to speak. The vault in this case is making its copious amount of trade data accessible through an Application Programming Interface (API), which enables customers to extract Panjiva’s trade data into their own database.

Freight transportation and logistics services provider Averitt Express recently announced it has rolled out improved transit times for less-than-truckload (LTL) service from the Midwest to Toronto and other cities.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Anne Ferro, a ferocious advocate for greater truck safety and a constant thorn to truck drivers and some unsafe trucking fleets, says she is leaving as administrator of the Federal Motor Carrier Safety Administration. No successor has been immediately named.

Data issued by the National Retail Federation lowered its 2014 retail sales forecast, due to a slow first six months of the year (and largely negatively influenced by the terrible winter weather), but noted that retail sales are expected to be strong over the next five months to finish the year.

Comments

Post a comment
Commenting is not available in this channel entry.