Impacts of a crisis are never a gender neutral, COVID19 is no exception

• Goods worth US$ 9.6 billion pass through it every day • Over 50 ships traverse the canal everyday • 193 KM long , 8 meters depth , 1.5 million workers were used for digging the canal • Construction started in 1859 and opened for commercial purpose in Nov, 1869 completed in 10 years

Impact of blockage and consequences:

Insurance

“The insurance industry is waiting with bated breath at the direction from which claims can arise out of the Canal blockage and of course what could be the enormity of the exposure,” said R Balasundaram, Executive Vice-president, Global Insurance Brokers Pvt Ltd.

There are various areas of claims to possibly come up such as demand for GA (General Average) and salvage guarantee from cargo interests. There could be a claim under the hull and machinery policy or damages against the vessel, and business interruption losses. There could be losses due to perishable cargo or the cancellation of orders, hence the claim demand,” he stated. Describing it as a “once-in-a-lifetime type of event”, the Canal blockage is estimated to cause losses in billions of dollars for insurers and the loss of trade per day due to the closure is pegged at close to $9 billion, he said.

Operations

“Global shipping giant Maersk warns ripple effects of Suez Canal blockage will last for weeks” As on 29/03/2021, there were still 422 ships waiting to go through the Suez Canal. It is a known fact that no ship thought to take another route, despite the fact that the crisis lasted 6 days, because the alternative route was more than 10,000 miles. The Suez Canal is still the safest, shortest, and best service course.

Trade

Suez Canal blockage is delaying an estimated $400 million an hour in goods - Lloyd’s List calculates. Separately, data from Lloyd's List showed the stranded ship was holding up an estimated $9.6bn of trade along the waterway each day. That equates to $400m and 3.3 million tonnes of cargo an hour, or $6.7m a minute.

Looking at the bigger picture, German insurer Allianz said on Friday its analysis showed the blockage could cost global trade between $6bn to $10bn a week and reduce annual trade growth by 0.2 to 0.4 percentage points. Shipping broker Braemar ACM told the Wall Street Journal that the cost of renting some vessels to ship cargo to and from Asia and the Middle East had jumped 47% to $2.2m. Some vessels have been rerouted to avoid the Suez Canal. That is adding around eight days to their total journeys.

The Suez Canal blockage doesn't just affect the global shipping industry or the Egyptian economy - countless businesses, from domestic transport providers to retailers, supermarkets and manufacturers are also impacted.

Impact on India: The export scenes in India are no different either. In addition to hike in shipping rates, the blockage

has the potential to curtail key manufacturing supplies.

India’s shipments of oil, textiles, furniture, cotton, auto components and machine parts to Europe, North America and South America could got delayed by 10-15 days. However, the most overlooked aspect so far has been the impact of a prolonged blockage on fuel prices in India, which is already one of the highest in the world. India, more than two-thirds of whose crude comes from the Gulf region, is among the top importers of crude oil and products via the Suez Canal. The volume is even higher than China, South Korea or Singapore. The resultant impact will show up in the form of higher crude prices, eventually trickling down in retail price terms.

Problem solved

Here's how the full moon helped free the stuck ship Ever Given in the Suez Canal

Tides are mostextreme when the Earth aligns with both the sun and the moon, the two objects that exert the strongest gravitational pull on our planet. (Because water moves most easily in response to this pull, the tides are the most obvious response to this gravitational tugging.) When there's a full moon or moon is in its new phase, its gravitational pull adds onto that of the sun, resulting in more dramatic high and low tides, according to the National Oceanic and Atmospheric Administration (NOAA).

And the moon was full on Sunday (March 28). Even better for the stranded ship, as the moon was simultaneously relatively close to Earth in its orbit; it will reach the closest point, called perigee, on Tuesday (March 30). Perigee can also accentuate the extreme tides caused by full and new moons, according to NOAA

Those factors mean that the moon really lined up to give the Ever Given a much-needed boost. According to the New York Times, the Suez Canal may have seen water levels about 18 inches (46 centimeters) higher than usual.

And now, thanks to the moon, the infamous Ever Given is on the go again (Nature again helped to solve the problem.

About the author:

Mrs. Pavana Jyothi

Ph.D from GITAM and also qualified Company Secretary, Member of ICSI, 2012. She has 9 years of teaching experience and has special interest towards Corporate Governance

Corporate Angle

Mr. Pranjal Kumar Phukan

Honorary Director-Strategy (ICTMAE)

SUPPLY CHAIN MANAGEMENT – INTRODUCTION & SIGNIFICANCE IN NEW NORMAL

Supply chain management is the handling of the entire production flow of a good or service starting from the raw components all the way to delivering the final product to the consumer. A company creates a network of suppliers (“links” in the chain) that move the product along from the suppliers of raw materials to those organizations that deal directly with users. According to Bart Perkins & Thomas Wailgum, there are five components of traditional supply chain management systems: • Planning • Sourcing • Manufacturing • Delivery and Logistics • Returning

Create a network or process to take back defective, excess or unwanted products. By analyzing various global partner data, three scenarios are identified where effective supply chain management increases value to the supply chain cycle:

• Identifying potential problems • Optimizing price dynamically • Improving the allocation of

“available to promise” inventory

IDC’s Simon Ellis in The Path to a Thinking Supply Chain defines supply chain management by identifying the five “Cs” of the effective supply chain management of the future:

• Connected • Collaborative • Cyber-aware • Cognitively enabled • Comprehensive