Supply chains tested as insurers of container ship in Suez blockage face millions in claims
Whilst the Ever Green is no longer stranded, the hold up of an estimated £3.7bn of westbound goods each day, including everything from computer chips to Barbie Dolls, and the suggestion of human error, means the owner
and its insurer face claims of millions of pounds.
Owners of the cargo on board the ship and other ships stuck in the canal will be likely to claim from the ship’s liability insurer for losses of perishable goods or missed delivery deadlines. As several dozen ships could be seen grouped around the northern and southern entrances, a constant build-up of ships could lead to supply chain issues for UK companies.
Covid-19 has already affected all methods of transportation, disrupting organisations throughout the world due to major supply chain problems and businesses have been urged to implement and review risk management and business continuity principles.
Although the Suez blockage can be seen as a ‘one off’, consideration should be given to ensuring alternative means of supply and having flexible arrangements in order to increase or decrease stocks accordingly.
Business continuity plans will be tested in real-time as the impact of this event unfolds. In addition to the above, below are some considerations you may wish to discuss with your clients:
- Looking to create a new strategy and plan
- Preparing the business for potential disruption
- Formalise a crisis Management Team to prepare for the impending impact on reduced supply chain
- Review current supply chain and get an idea of the potential impact, i.e. can their suppliers meet their supply needs?
- Consider working with competitors and other similar organisations to reduce the impact on products and services.
- Make sure adequate spare parts are available for machinery and maintenance agreements are in place to support manufacturing needs.
- Think about limiting products and services in line with possible disruption to supply chain.
- Maintain communication with suppliers and customers to keep them informed of any potential disruption.
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