Our Supply Chain Is Vulnerable to Disruption

LOS ANGELES—Today, our supply chain is more interconnected and interdependent than ever, and it may mean that it is more vulnerable to disruption. That is the case that Ken O'Brien, COO of Gemini Shippers, made at the Pulse of the Ports conference last week. While this supply chain has created more efficiency and is more cost effective, those benefits come at a cost.

“Today's supply chain is more complex than ever. The interconnected nature of modern day supply chains, fueled by increasing interdependencies between companies, globalization and production processes and technology have created a flexible and cost effective logistics structure,” said O'Brien. “At the same time, I would argue that this interconnectivity and interdependency has created a supply chain that is more vulnerable to disruption.”

Because of this interconnectivity, the whole supply chain can be affected by a single disruption at a single port. Disruption might start as an event at one port, but can quickly spread through an entire network. “There unfortunately many examples of this phenomenon,” explained O'Brien.

These disruptions have become more common in recent years, and especially since the global financial crisis in 2008, and the examples are plentiful. “The recent bankruptcy of Hanjin is a stark reminder of the widespread impacts when there is a shock to one part of the system,” he said.

This year, supply chain disruptions are among the top concerns of importers and shippers, many of which remember the 2015 disruptions, including the labor disputes. “The worry of West Coast service disruption is a key challenge on importers minds,” said O'Brien. “While shippers see the value of improved port coverage from the alliances coming into effect, memories of 2015's disruptions continue to raise concern.”

LOS ANGELES—Today, our supply chain is more interconnected and interdependent than ever, and it may mean that it is more vulnerable to disruption. That is the case that Ken O'Brien, COO of Gemini Shippers, made at the Pulse of the Ports conference last week. While this supply chain has created more efficiency and is more cost effective, those benefits come at a cost.

“Today's supply chain is more complex than ever. The interconnected nature of modern day supply chains, fueled by increasing interdependencies between companies, globalization and production processes and technology have created a flexible and cost effective logistics structure,” said O'Brien. “At the same time, I would argue that this interconnectivity and interdependency has created a supply chain that is more vulnerable to disruption.”

Because of this interconnectivity, the whole supply chain can be affected by a single disruption at a single port. Disruption might start as an event at one port, but can quickly spread through an entire network. “There unfortunately many examples of this phenomenon,” explained O'Brien.

These disruptions have become more common in recent years, and especially since the global financial crisis in 2008, and the examples are plentiful. “The recent bankruptcy of Hanjin is a stark reminder of the widespread impacts when there is a shock to one part of the system,” he said.

This year, supply chain disruptions are among the top concerns of importers and shippers, many of which remember the 2015 disruptions, including the labor disputes. “The worry of West Coast service disruption is a key challenge on importers minds,” said O'Brien. “While shippers see the value of improved port coverage from the alliances coming into effect, memories of 2015's disruptions continue to raise concern.”