![]() ![]() “The problem at the moment is we have a whole flock of black swans coming at us.” Wilding says managing a supply chain used to involve 80 percent dealing with predictability and 20 percent coping with surprises, numbers that have now flipped. “We used to occasionally have black swan events,” says Richard Wilding, professor of supply chain strategy at Cranfield University in the UK, referring to rare and hard-to-predict occurrences that have major impacts. In this reality, backlogs and breakdowns are the new normal, which makes getting ahead of disruptions as early as possible more important than ever. But a new reality is forcing companies to adopt new strategies to keep goods moving. The supply chain is too complex, interconnected, and fragile to be made completely immune to shocks, especially ones as seismic as a global pandemic or a major war. If the pandemic, which triggered a surge in purchasing of goods, caused the global supply chain to buckle, Russia’s invasion of Ukraine and China’s continuing zero-Covid policy risk breaking it completely. Some European automotive production lines have cut their output due to a shortage of wiring normally sourced from factories in Ukraine. Countries in the Middle East and Africa that rely on produce from Ukraine are likely to experience serious food shortages in the coming weeks and months. Russia’s invasion of Ukraine has also severed key supply lines for nickel, aluminum, wheat, and sunflower oil, causing commodity prices to skyrocket. More than a million containers due to travel to Europe from China by train-on a route that goes through Russia-must now make their journey by sea as sanctions bite. Major ports the world over, which used to operate like clockwork, are now beset by delays, with container ships queuing for days in some of the worst congestion ever recorded. In Shenzhen, a major manufacturing hub in the country’s south, trucking costs have shot up 300 percent due to a backlog of orders and a shortage of drivers following the introduction of similar Covid restrictions. At the city’s port, Shanghai-Ningbo, more than 120 container vessels are stuck on hold. ![]() ![]() Air freight warehouses at Shanghai Pudong Airport are log-jammed as a result of strict Covid testing protocols imposed on China’s biggest city following a local outbreak. The supply chain is in chaos-and it’s getting worse. ![]()
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