The world heaved a collective sigh of relief when news broke on Monday that traffic through the Suez Canal had resumed, after a 400m-long tanker, which ran aground and became lodged diagonally across the canal for almost a week, was refloated. With over 10 per cent of global maritime trade passing through the Suez and few alternative routes for shipping goods between Asia and Europe, snarls in the global supply chain could have been huge. Not only would there have been shortages of products such as toilet paper, coffee, and oil and natural gas shipments, but the blockage could also have stopped empty shipping containers from being returned to Asia - compounding a worldwide container shortage sparked by the Covid-19 pandemic.
Before this, the global supply chain landscape was already being reshaped by burgeoning consumer demand due to e-commerce, China's emergence as a major exporter, the impact of automation and, most recently, Covid-19 disruptions. Much like the pandemic, the Suez incident exposed the inter-connectivity and fragility of supply chains. In their pursuit of efficiency and lower costs, some companies sacrificed robustness and resilience. Going forward, more need to focus on ensuring supply chain and business continuity. But pivoting from a "just in time" to a "just in case" model comes at a price as it involves keeping more inventory and hiring for the long term.