Editor’s name: Tim Morris, UK Major Ports Group
Recent news in the UK has been full of reports of transport disruption across several international transport modes – airlines hit by COVID staff absence, rail services hit by break downs, ferry operators hit by widely reported industrial relations fall out.
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The last two years have seen the topic of supply chain resilience thrust back into the spotlight: COVID, Brexit, Suez Canal blockages etc. But here we are again.
Although dry bulk categories haven’t had the profile or maybe volatility of containers or RoRo, clearly it’s been an area that’s faced challenges and had to demonstrate resilience too.
I was prompted to return to resilience after attending the recent Logistics UK Supply Chain Resilience 2022 conference. In addition to making my own contribution, it was a great opportunity to step back slightly and think about the wider context and experiences of others from industry, academia and government.
A couple of stand-out points from the event which chime with the experience of major port operators include:
- There is a fundamental shift in business attitudes underway, with only 14% of businesses in a Cap Gemini thinking that supply chain planning and operations will go back to a pre-COVID ‘normal’.
- One reason is that the refocusing in resilience is not a response to specific events, however large it is also an adaptation to tectonic shifts like climate change and more contested geopolitics.
- But this is not the end of global supply chains – polling for UKMPG demonstrates there’s been no decisive mood shift away from international sourcing, either from businesses or the public. The cost advantages and, for categories like dry bulk, sheer availability constraints mean there are still important needs for businesses and consumers alike from global supply chains vs wholesale reshoring.
- What the ports and logistics sectors are seeing instead is organisations investing more in their supply chains systems and processes to mitigate the vulnerabilities in ‘lean’. Two crucial elements are first, physically, increasing inventory levels for key categories and secondly, increasing the visibility of supply chains both in terms of the movement of goods and also across their sourcing. On the latter, a shocking juxtaposition of statistics was that only 2% of businesses have supply chain visibility beyond the 2nd Tier (McKinsey), whereas over 40% of COVID supply chain disruption occurred at 2nd Tier or beyond (BCI).
So what does this mean for the UK’s major ports and their role in the reshaped supply chain landscape? The UK’s strong network of significantly sized and capable ports is in itself a powerful contributor to resilience – providing a range of options and competition for UK businesses.
And ports are more than just places for loading and unloading ships – they are broader logistics and multimodal transport hubs. With most major ports offering warehousing and locations for immediate value addition for bulks, a range of inland transport modes such as rail freight and a growing offering in digitised services they can provide the resilient solutions for challenging supply chain situations. All of which is course underpinned by a constant focus on adaptability, productivity and dialogue.
Supply chain change is real, but the UK’s ports are adapting to keep the goods flowing that we all need. To borrow a term from Professor Alan McKinnon of the Khune Logistics University at the recent conference, ports are ready and able to enable supply chains not just to bounce back, but to ‘bounce forward’.