Freight News, Logistics

Calais crisis highlights need for stronger risk management

[ August 11, 2015   //   ]

The Calais crisis has highlighted the need for companies to have strong supply chain risk strategies, says Nick Miller, head of FMCG at global supply chain consultancy Crimson & Co.He is urging all businesses to carry out a thorough review of their risks strategies in order to avoid future disruptions.

UK exporters and importers are reporting continued losses as Eurotunnel and Dover-Calais ferry operators face major interruptions and preventing regular transportation of goods between the UK and Europe, resulting in companies being forced to either find more expensive forms of transportation or, ultimately, calling off their deliveries all together.

Miller advises: “The chaos at Calais is making businesses wake up to the realities of modern freight transportation and the necessity of implementing a thorough risk strategy. It seems that a lot of UK exporters and importers have ignored this vital management practice likely due to the associated costs this incorporates. However, when you consider this in context of recent events and the disruption to your supply chain, then time and time again it proves to be money well spent.

He compared the Calais crisis to the recent port strike disruption on the US West Coast where a number of big retailers suffered significant losses due to stock being trapped on container ships. Eurotunnel provides over a third of the cross-channel freight traffic from the UK.

But while the Calais routes are quicker, easier and cheaper than alternatives it isnot the only possibility.

“US based importers and exporters have been forced to adopt a multi-channel delivery strategy, using a variety of ports to ease congestion during any disturbances. While this strategy is undoubtedly more expensive, it dramatically reduces a company’s risk. UK businesses ought to take heed from this risk strategy, looking into alternate delivery routes to reduce their losses during this time.”