According to recent reporting, a cargo ship rammed into a lock gate on the Moselle River, creating a traffic standstill that could last months—a dire situation reminiscent of the blockage in the Suez Canal. While not as big as the Suez Canal, around eight million tons of goods have been transported via the Moselle River this year, including ore, metal waste, steel, petroleum, building materials and agricultural products. Without question the Moselle River us a critical waterway, playing a central role in international freight transport and supply.
As a result of the accident, this still important waterway is now out of service for many months, which could have economic consequences. Some experts see possible difficulties with diesel supplies, which are important for the steel and ore trade, and could lead to possible production losses.
Let’s take a closer look at additional disruptions this blockage will cause, and what businesses can do to remain resilient.
Seeking alternative transit
The closure of the Moselle is holding up around 70 ships, as there are no alternative waterways for large freighters. Companies are looking for alternative solutions, such as shifting transport to road or rail. However, this involves higher costs, additional logistical effort and capacity problems, especially before Christmas. Some goods are also unsuitable for lorries or trains.
Once again, it shows how a small incident can put the supply chain under complete pressure. There is no one-size-fits-all solution for all companies affected by this lock damage. It was an unforeseen and highly unpredictable event.
In this case, it depends on what companies can do to minimize the impact on their planned production and sales campaigns. Especially when it comes to the resilience of global supply chains, fast and flexible action in the event of unexpected events is a top priority. And end-to-end transparency plays a key role here in order to act proactively.
Importance of end-to-end visibility
In a global and complex supply chain, visibility is critical. At any time, and especially in a crisis, companies need to be able to see:
- Which materials and goods are under threat?
- What alternative sources of supply are there for the most important resources?
- Where is my stock located?
- Which shipments are affected?
- What is the impact on planned production, customer orders and ongoing campaigns?
In recent years, it has become clear that digital tools have become indispensable for companies to make their supply chains more agile and respond to unpredictable changes. Advances in technologies such as AI, machine learning, IoT tracking and cloud services are opening up opportunities for companies to secure decisive competitive advantages.
Reducing risk via diversification and a solid business network
The Moselle lock accident shows once again how a seemingly minor incident can affect the risk of production downtime. It is therefore important that companies not only have effective risk management in unexpected situations, but also accurate forecasting capabilities and a good network of relationships.
Recognizing the risk is the first step in assessing the best course of action and being able to act within the shortest possible time. The following questions can help:
- Is it possible to reroute the shipment at short notice and during transport?
- What alternative sources of supply can be identified and is it possible to switch quickly?
- Are there alternative logistics types and routes?
- Can production be adapted to respond to unavailable materials?
Furthermore, a strong business network should not be underestimated – especially when it comes to the entire supply chain, from suppliers to service providers. With a good network, companies can work together to find solutions to challenges that arise more quickly.
Building a risk resilient supply chain
In order to remain viable in the future, it is important to design the supply chain in such a way that it can withstand disruptions. This requires processes and plans that provide for the following
- Implement risk management and business continuity strategies
- Geographical diversification of supply chains to minimize risks that may emanate from suppliers in a specific country or region
- Multi-sourcing of key raw materials or strategic components to minimize dependence on a single supplier
- Identification of alternative transport options in the event of disruptions
- Introduction of an inventory optimization strategy across the entire company network to mitigate disruptions
- Unpredictable disruptions – whether due to pandemics, climatic changes or geopolitical crises – will continue to occur in the future.
And in a globally networked world, it is crucial that supply chains remain resilient and flexible in order to survive current crisis situations. At the same time, they should have the foresight, intelligence and transparency to thrive in the new normal.
If you want to learn how companies are using the latest Cloud technology to understand the impact on their supply chain operations and business outcomes and to improve it, download the latest IDC Report.
