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A Dun & Bradstreet Outlook On The Domino Effect Of the Yantain Port Congestion And Best Practices For Building Supply Chain ResilienceSince the 21st of May, Yantian International Container Terminal (YICT), one of the world’s busiest container ports, has enforced strict disinfection and quarantine measures following the discovery of the Coronavirus among port staff. The port which has an annual volume of more than 13 million twenty-foot equivalent units (TEU), reportedly has more than 40 container ships anchored in open water outside the terminal. Serving an estimated 100 ships per week, the ongoing disruption and quarantine measures will have continued implications for global supply chains and is forecast to be even more disruptive than the Ever Given blockage in the Suez Canal earlier this year due to the length of time that the port has been in quarantine.
“This most recent shipping container incident in the port of Yantian reinforces the reality that comes with the interconnectedness of globalization and our reliance of each other as contributors to the global supply chain. As a result, 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. Unlike the Suez Canal which only remained blocked for six days, Yantian’s port has been operating at a reduced capacity for a number of weeks creating further delays on supply chains.
The Yantian port congestion plays as yet another reminder to businesses to invest in data and technology to create an agile, geographically dispersed supply chain that can quickly pivot during unexpected events.”
– Brian Alster, General Manager, Third-Party Risk & Compliance, Dun & Bradstreet
IMPACT ON GLOBAL SUPPLY CHAINS:To provide a view of how the Yantian International Container Terminal will impact supply chains, Dun & Bradstreet’s data and analytics team analysed annual shipping data that tracks the vessels and materials found onboard that travel through the YICT and found:
With no concrete view as to when the port will operate again at full capacity, we know that there will be great impact to global supply chains in the weeks and possibly months to come.
The incident identifies the urgency for companies to better understand and manage their global supply chains. Below are both near and long-term best practices to consider:
• Assess – Complete an immediate assessment of your suppliers and suppliers’ suppliers to determine the impact to your own supply chain operation.
o How many tier 1 and 2 suppliers do you have in your supply chain that have been negatively impacted by this incident in the region?
o How urgently do you need the goods that are currently backlogged in the region of impact?
• Identify – Determine your alternative suppliers in non-impacted regions of the world and engage them to offset the delays of suppliers in the impacted region. Determine:
o How long it will take to onboard them (i.e. do they have the suppliers you need?)
o How quickly will it take for those supplies to reach your location? Will it be faster than waiting for shipments from the impacted regions to reach you?