This week’s supply chain risk news
Nothing a timely paycheck can’t cure
If you ask 13 thousand air traffic controllers and 50 thousand Transportation Security Administration agents to keep showing up for work while their paychecks are on hold—much as the U.S. government has asked amid the ongoing shutdown—a few of those workers, unsurprisingly, are going to call in sick.
As a result, thousands of flights have been delayed or cancelled this month. So far, the average delay has been an hour or less. But there have been above-average exceptions. Plus, the problem could worsen, as new certifications for planes and pilots are also on hold.
The staffing shortages could pose a particular problem for perishable goods like food and pharmaceuticals. With agents who focus on cargo working without pay and support staff furloughed, inspections may be slower, along with customs clearance times. In West Texas, where timely goods like tomatoes, avocados, and berries flow north from Mexico, delays of up to six hours have already been reported.
It’s not clear what might break the U.S. political stalemate and end the shutdown. You will find more details and context are in our Risk Center.
For shipping around Belgium, a Waterloo
Neither logistics nor labor relations have enjoyed a smooth October so far in Belgium. As we noted earlier this month, pilots went on strike over reforms that would’ve cut newer pensions by up to 45 percent. That’s led to disruptions in various Belgian ports and additional strain on shipping activities in Western Europe.
Then, per our more recent Risk Center update, Belgium’s three largest trade unions all called for demonstrations over measures including pension reforms and lower pay for night work. The results have included blocked roads, more port disruptions, and many cancelled flights. Given the role of Brussels Airport as a pharmaceutical gateway for Europe—some 10 percent of the total volume of goods handled there in 2022 were pharmaceuticals—the cancellation of more than 200 flights there is hard to overlook.
Another headache is the maritime traffic control center in Zandvliet—part of Antwerp—which regulates key shipping traffic and lock schedules. Strikes actions, understaffing and blockages have snagged dozens of ships there, affecting, among other things, major shipments of liquefied natural gas. Other significant impacts could include everything from cars to steel to chemicals.
If Chinese and U.S. trade negotiators can’t say something nice…
For anyone awaiting a tidy resolution to the months-long tariff negotiations between Chinese and U.S. officials amid President Donald Trump’s trade war, the latest developments have hardly instilled fresh hope.
With more talks scheduled and the clock ticking down toward a November 10 deadline to reach an agreement, China, which has a near monopoly on rare earths used for everything from smartphones to advanced military technology, has ratcheted up its export controls over those crucial minerals.
Firing back, Trump threatened a 100 percent tariff on Chinese imports. In an interview, U.S. treasury secretary Scott Bessent then suggested China wanted to undermine the world economy and “pull everybody else down with them.”
Such rhetoric, China’s commerce ministry has now responded, “is not the right way to get along with China,” which will “fight to the end” in trade talks.
It’s not clear what the latest exchange might signal for a possible meeting between Trump and Chinese president Xi Jinping later this month—which may or may not still happen.
One score to rule them all
Procurement teams face pressure to keep costs down while safeguarding operational resilience. To do this, they often have to rely on spotty data and gut feelings. It’s dicey work, and hardly a recipe for consistency, but there’s an alternative.
A measure known as a supplier risk score can transform how organizations compare, select, and monitor suppliers, using data to inform decisions that bolster resilience.
A supplier risk score is like a credit score for your supply chain. It quantifies the various risks tied to a given supplier and their location. This score typically uses a common scale—zero to 25, say, with the higher number denoting greater risk. This allows for apples-to-apples comparisons, even between vendors with very different types of risk.
Importantly, a comprehensive supplier risk score is not one data point, but the aggregation of many. It accounts for everything from how flood-prone a given facility might be to how often they tend to deliver late.
In short, a supplier risk score gives you a foundational metric for optimizing your procurement process’s approach to risk. We detail this much more on our blog.
Other things we’ve been reading and monitoring:
In late September, protests broke out in Madagascar over energy and water shortages, inflation, and other issues. The ensuing demonstrations have sometimes proved deadly and led to escalating tensions and a general strike, as we detail here.
Could the U.S. be headed toward “supply-shock induced food shortages?” A filing by the Trump administration says that might be one result of the nation’s crackdown on undocumented immigrant farmworkers, as discussed in Fortune.
We’ve noted before that matcha is in short supply even as demand for the tasty Japanese tea has hit an all-time high. Unhappily, though perhaps predictably, the result has been a playground for arbitrage and counterfeiters, per the New York Times.
