When it rains, it pours

The latest supply chain disruption – the Suez Canal crisis

The electronics industry has experienced a perfect storm of events since last year and the storm isn’t letting up any time soon. In fact, in the past week, another disruption hit when a single ship, one almost as long as the Empire State Building is tall, became stuck in the Suez Canal and blocked any other cargo ships from passing. The ripple effects are being felt around the world and throughout most industries.

According to an NBC news article, “the auto industry depends heavily upon the canal, which facilitates the move of raw materials, parts and finished vehicles. As of Friday morning, Europe’s Car Dealer magazine reported at least two large auto transport vessels, the Morning Star and the Hoegh London, were blocked by the grounding of the Ever Given. It said several other vessels are heading toward the Suez and could either be forced to anchor if the crisis isn’t resolved, or to divert. Taking the long way around Africa adds about 10 days to a typical freighter’s time at sea.”

In an already strained market, the auto sector is “particularly vulnerable”, and things seem to only be worsening. “Even a slight disruption in the supply chain can compound such problems in an industry that operates on a just-in-time basis, with factories maintaining as little inventory as possible.” 

Over the weekend, the Ever Given was successfully ungrounded and the canal reopened. “Traffic through the crucial waterway will now officially resume later Monday after days of intense salvage efforts to free the ship,” said a current news update from NBC. However, the closure already impacted supply chains and the effects will be felt for weeks. In a Twitter post, Brian Deese, White House Director of the National Economic Council said, “Just another reminder of how imperative it is to ensure the resilience of our supply chains going forward.”

As the shortage storm continues to rage on, there is still a beacon of hope. Connected distribution from Converge has the unique ability to spot patterns, connect the dots and quickly react to turbulent events, such as the Suez Canal blockage. There is a solution for every situation and Converge is determined to make the best strategic connections that will support you and keep your production lines running. Follow our steps to weather the storm and contact us today.

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Eisenstein, Paul A. “Delay on Suez Canal Could Cripple Already Struggling Auto Industry.” NBCNews.com, NBCUniversal News Group, 26 Mar. 2021, www.nbcnews.com/business/autos/delay-suez-canal-could-cripple-already-struggling-auto-industry-n1262191.

Gubash, Charlene, et al. “Suez Canal Ship Ever Given Partially Refloated after Huge Effort to Unblock Key Trade Route.” NBCNews.com, NBCUniversal News Group, 29 Mar. 2021, www.nbcnews.com/news/world/suez-canal-ship-ever-given-partially-refloated-after-huge-effort-n1262299.

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