Home Insights Blog Company Global supply chain is fragile, and our logistics need to be prepared – Case Suez
Back to Company
Apr 7, 2021

Global supply chain is fragile, and our logistics need to be prepared – Case Suez

Olli-Petteri Salo
Olli-Petteri Salo
VP, Global Logistics Management
In the challenging ocean market industry, Suez Canal blockage in March 2021 showed how fragile the global supply chain is. The consequences of one single accident might be globally significant for multiple stakeholders. Here’s our view on why and how logistics organizations need to be prepared.
A ship with cargo pictured in the middle of the sea with coast in the far horizon.

Challenges, like lack of containers, blank sailings and port congestions, that have been impacted by the ocean freight, have in return impacted other logistics services. Thus, logistics market overall has been extremely unstable. The topic is complex and to fix the issues, asking the right questions is the key. To be prepared for the future, organizations should ask themselves three questions: How has the current logistics network been set up? How agile is it during uncontrollable events? How adaptable is it for necessary changes? At Metso Outotec, we have had to answer of these questions.

Targeting on-time delivery despite the challenges

We are not immune to the mentioned challenges in the logistics market. One of our most important KPI is on-time delivery which is constantly challenged by global operations and cargo moving delays. We have changed our operating model and processes, and developed agile ways of working to better meet the current market situation. We have launched global initiatives to ensure better visibility of the shipments and timely updates of the impacts in the market.

During events like the one in Suez, it is necessary to put great effort in seeking alternative solutions.

There will always be unpredictable changes, and when something out of the ordinary happens, significant amount of time is used to manage the problems and disruption. Constant real-time visibility might not be necessary for each and every shipment in the industry, but knowing the status when needed can be crucial in preventing further negative impacts. In our logistics organization, we have clear focus areas and priorities that have helped us to manage the situation, even during a pandemic and in the middle of the merger of two companies:

  • visibility and monitoring in reporting,
  • close collaboration with all relevant internal and external stakeholders, and
  • digitalization of systems.

The Suez Canal case shows why logistics organizations need to be prepared

To reflect on the event of Suez Canal, information of cargo in the Ever Given and to the vessels that were immediately impacted, was crucial. Identificating those shipments and communicating the possible challenges was the key activity on day 1. Other main activities included estimating the new arrival time of all shipments impacted and recognizing the possible impacts in the destination locations. 

 

At the end, smooth communication and collaboration between all the relevant stakeholders is the most important thing.

During these kinds of events, effort should be put into seeking alternative solutions. Lesson learned; all issues cannot be solved nor mitigated, but when logistics organization are able meet the needs of today, and collaboration and systems are in place, challenging surprises can be managed.

We at Metso Outotec are now even better prepared and constantly ready to change our tactics. We are on a journey to become an end-to-end sustainable and agile logistics organization. At the end, smooth communication and collaboration between all relevant stakeholders is the most important thing. After all,  logistics is by nature collaboration with different stakeholders and systems. When smooth collaboration is identified as a priority, excellent results will follow.

Enjoyed this article? Try this next
Three key business drivers for responsible procurement
Learn about minimizing risks, increasing productivity and gaining competitive advantage - the drivers of responsible procurement.
Feb 18, 2019
Read more
Back to Company