The Suez Canal blockage may affect the global supply chain for months, the world's largest shipping company says
Maersksays it could take months to resolve the shippingdelays caused by the Suez Canalblockage.
- Maersk is the world's largest shipping company.
- Even when the
Ever Givenclears the canal, "ripple effects" will remain, Maersk said.
The Suez Canal blockage by the giant container ship Ever Given has caused shipping backlogs that could take months to unravel, Maersk, the world's biggest shipping company, said Monday.
"Even when the canal gets reopened, the ripple effects on global capacity and equipment are significant and the blockage has already triggered a series of further disruptions and backlogs in global shipping that could take weeks, possibly months, to unravel," Maersk said in a statement on Monday.The
Maersk, which carries goods for H&M, Nike, and Unilever, among others, said in its statement Monday that it had three ships stuck in the Suez Canal and 29 ships waiting to enter the canal. It has already redirected 15 ships around the southern tip of South Africa, which adds about 10 days to their journeys.Maersk told Insider that it was "still too early to indicate the total business impact of the six days blockage" but that the company was "working around the clock to mitigate the delays."
Financial Times on Monday that the Suez Canal jam, as well as the coronavirus pandemic, had forced companies to rethink their supply chains. Skou said businesses previously depended on "just in time" supply chains, whereby items were transported to factories only as they were needed for manufacturing. This required firms to predict demand.
Now, he added, they are holding more material to avoid shortages when disruptions occur.
"We are moving towards a just-in-case supply chain, not just-in-time," Skou told the Financial Times, adding that the incident in the Suez Canal would "make people think more about their supply chains.""How much just-in-time do you want to be?" he said. "It's great when it works, but when it doesn't you lose sales. There's no just-in-time cost savings that can outweigh the negative of losing sales."
He also said companies were becoming less dependent on single suppliers, which might save them "the last 5 cents on a component."
"We clearly see our customers saying we need to have multiple suppliers to make sure that one small subsupplier can't close us down," Skou said.
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