Japan’s supply chain still under pressure

In an era of globe-spanning operations, multiple events over the past year once again underscore the critical need to develop comprehensive business continuity plans in light of supply chain vulnerabilities.
image
By Patrick Burnson, Executive Editor
March 15, 2011 - SCMR Editorial

While government and relief agencies are dealing with the ongoing health and safety consequences of Japan’s earthquake and subsequent tsunami, supply chain professionals are coping with the tremendous impact this has made on global shipping and sourcing.

“Right now the only thing that appears safe to say is the ports in the northern part of the country are most affected by the quake and the tsunami,” said spokesmen for BIMCO, an independent international shipping association based in Bagsvaard, Denmark.

“All ports in that area are assumed to be out of order as operations have stopped and port facilities may have been washed away,” spokesmen added.
The long term implications, said BIMCO analysts, is that container shipping may be impacted by lack of exports from the Japanese factories, causing liner companies to leap-frog Japanese ports on their trans-Pacific trading lanes.

“Dry bulk shipping may be impacted in many ways as Japan is a major importer of thermal coal for power generation, iron ore and coking coal for steel production and grains for food and feedstock,” said BIMCO.
And as noted in the mainstream press, several nuclear power plants may be shut down for days or weeks and coal stocks at coal-fired power plants have experienced coal stocks getting flooded away.

Meanwhile, tanker shipping may be impacted as refineries are on fire, which could affect product tanker demand. Moreover, the nuclear power plant shutdown may also affect overall oil imports for power generation.
Both imports and exports may be affected by force majeure, added analysts, but the full impact this will have on the global insurance industry is a matter of conjecture.

Air cargo operations were interrupted immediately following the quake, with Lufthansa Cargo among the first to suspend service.

At last report, however, the airline spokesmen said “light operations are “stabilizing and returning to normal.”

In an era of globe-spanning operations, multiple events over the past year once again underscore the critical need to develop comprehensive business continuity plans in light of supply chain vulnerabilities. 

That’s the conclusion shared with SCMR by Insight, Inc., a provider of supply chain planning applications in a recent interview.

“Heightened risks and outright disruptions are coming at us at a furious pace and it is absolutely critical that firms be prepared with detailed contingency plans,” said Dr. Jeff Karrenbauer, president of INSIGHT, Inc.

For related stories click here.



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

The International Air Transport Association (IATA) announced August 2014 data for global air freight markets showing continued “robust”growth in air cargo volumes.

Even though some of its key metrics dropped sequentially from August to September, the outlook for manufacturing over all remains strong, according to the most recent edition of the Manufacturing Report on Business issued today by the Institute for Supply Management (ISM).

Company officials said that these planned changes, which will take effect on January 4, 2015, will provide for increases in current pay rates and reduce the time it takes for its nearly 15,000 drivers to reach top pay scale.

While the economy has seen more than its fair share of ups and downs in recent years, 2014 is different in that it could be the best year from an economic output perspective in the last several years. That outlook was offered up by Rosalyn Wilson, senior business analyst at Parsons, and author of the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report at last week’s CSCMP Annual Conference in San Antonio.

Matching last week, the average price per gallon of diesel gasoline dropped 2.3 cents, bringing the average price per gallon to $3.755 per gallon, according to the Department of Energy’s Energy Information Administration (EIA).

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

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