The temporary blockade of the Suez Canal after the cargo ship Ever Given ran aground at the end of March revealed deep vulnerabilities in the global supply chain, and some retailers were hit with delays and costs.
The Suez Canal is a vital trade route, with an estimated 12% of the world’s seaborne trade and 30% of global container traffic passing through it. All that trade accounts for roughly $400 million in cargo every hour, according to a report from Dun & Bradstreet and E2Open that examined which materials and industries were most impacted. The nearly week-long hold up of passage will have lasting ramifications, as well as immediate impacts for several weeks, even as global trade resumed after Ever Given was freed on March 30.
“The disaster of the moment becomes a global phenomenon because we realized the interconnectedness that comes with globalization and our reliance of each other as contributors to the global supply chain,” Brian Alster, general manager of third-party risk and compliance at Dun & Bradstreet, said in the report. “Companies have developed a higher level of dependency on suppliers and third parties from other countries, and that dependency is highlighted when a link in the supply chain is impacted.
According to the report, the top 10 industries in the U.S. affected by the delays in the blockade were:
- Grocery stores
- Department stores
- Auto and home supply stores
- Hardware stores
- Surgical and medical equipment suppliers
- Plumbing, heating and air-conditioning
- General warehousing and storage
- Sporting goods
The disaster presents new opportunities for retailers to shore up their supply chains through new technology and diversification. The report also suggests developing longer-term best practices to overcome supply chain challenges in the future.
“The Suez Canal incident gives us yet another reason for businesses to invest in data and technology to create an agile, geographically dispersed supply chain that can quickly pivot during unexpected events,” Alster said.