Navigating Supply Chain Disruptions: Lessons from the Red Sea Crisis

From Disruption to Adaptation: How Businesses Can Build Resilient Supply Chains in Times of Crisis

The ongoing Red Sea crisis has exposed the vulnerabilities of global supply chains. In this insightful webinar, industry experts share their perspectives on mitigating risks, leveraging technology, and fostering agility to navigate through maritime disruptions successfully.

The escalating conflicts in the Red Sea have severely impacted logistics operations for shippers and 3PLs (third-party logistics providers) worldwide. The webinar “From Disruption to Adaptation: Navigating Through the Impact of a Red Sea Crisis” organized by the Global Supply Chain Council and supported by Infor Nexus, explores the potential risks to the global supply chain and how technology can help provide real-time visibility and sustainable data.

The webinar featured two speakers, Heidi Benko, VP of Product Marketing and Strategy at Infor Nexus, and Cas Brentjens, Vice President for Infor Nexus for Asia Pacific and Japan. Heidi Benko kicked off the session with a 20-minute presentation, followed by Cass Brentjens’ insights and a Q&A session with the attendees.

One of the primary impacts observed due to the Red Sea crisis is the increase in transit times. Heidi Benko shared network insights from Infor Nexus, highlighting the extended transit times across various lanes, particularly for shipments to Rotterdam, where transit times continued to rise. She also noted that transit times to North America had increased by approximately ten days.

“We continue to see that transit times are increasing, but in some cases, as you can see, some are coming down, right? But still longer than normal due to the rerouting transit times.” – Heidi Benko

Blank sailings (canceled sailings) have also been a concern for shippers, leading to increased rates and additional delays. Additionally, the webinar discussed the ripple effects of the crisis, such as increased dwell times at Asian transit ports due to longer transit times from origin.

To navigate through this disruption, companies have adopted various strategies depending on their supply chain setups. Some have opted for rerouting, either around the Cape of Good Hope or shifting to the West Coast and relying on rail or road transportation to reach their destinations. Others have turned to air freight for urgent shipments, while some have chosen to deal with the delays and factor in the additional transit times.

“Some companies are just, obviously we’ve got it rerouting, right, we’re not going through the Red Sea, so going through the Cape of Good Hope, and just, you know, we’re already dealing with ocean shipping, just allowing for that transit times.” – Heidi Benko

Heidi Benko emphasized the need for real-time visibility and the ability to quickly assess the impact on supply chains. She demonstrated Infor Nexus’ Control Center, a supply chain platform that provides live vessel tracking, shipment details, order information, and inventory levels, enabling users to make informed decisions and collaborate with their 3PLs efficiently.

“I need to understand and see my entire supply chain, where I have inventory throughout my supply chain. Where are the statuses of my orders? Which orders are critical? All of that stuff. I need that in one place so I don’t have to go to multiple systems and play a game of phone tag between functions such as transportation, planning, warehouse etc.” – Heidi Benko

Cas Brentjens highlighted the importance of digitization and having a resilient supply chain strategy that extends beyond the Red Sea crisis. He emphasized the need for companies to start their digitization journey, ensuring that contracts, shipping instructions, and bill of lading are digitized, enabling real-time tracking and traceability.

“If you want to sense and respond fast, I think digitization is the first step to get there.” – Cas Brentjens

Throughout the Q&A session, the speakers addressed various concerns raised by attendees, including the impact on shipping rates, the feasibility of working with specific carriers, the role of technology in providing visibility, and the need for proactive measures to prepare for future disruptions.

Key Takeaways:

1. Embrace Agility: Supply chain disruptions are becoming the new norm, and businesses must be prepared to adapt quickly. Fostering agility through real-time visibility, collaboration, and strategic network design is crucial.
2. Invest in Digitization: Digitizing supply chain processes, contracts, and data exchange enables companies to sense and respond rapidly to disruptions, improving resilience and decision-making.
3. Leverage Technology: Supply chain technology solutions, such as control towers and business networks, provide end-to-end visibility, impact analysis, and collaboration capabilities, empowering organizations to navigate crises effectively.
4. Diversify Strategies: Implementing a multi-modal transportation strategy, evaluating alternative routes, and collaborating with logistics partners can help mitigate the effects of disruptions and ensure continuity.
5. Continuous Improvement: Supply chain disruptions are inevitable. Companies should continuously review and enhance their contingency plans, leveraging lessons learned from past crises to future-proof their operations.
6. Consider all stages of your end-to-end supply chain, including Trading Partner Management, Sourcing and Procurement Processes, Warehousing, Transportation, and Delivery, into your visibility platform.
7. A sense and respond control tower enables proactive, AI based, data-driven decision-making and rapid response capabilities, allowing organizations to adapt quickly to changes and disruptions in the supply chain environment. It promotes agility, efficiency, and competitiveness in today’s dynamic business landscape.

As the world grapples with the ongoing Red Sea crisis and other potential disruptions, businesses must prioritize supply chain resilience and agility. Share your thoughts and experiences in the comments below. How has your organization adapted to recent supply chain challenges? What strategies have proven effective in mitigating risks and fostering continuity?