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Global IT outage disrupts supply chains

Jul 23, 2024 | , , , , , , , , , , , , , , , , ,

On Friday, a faulty update to Microsoft software by cyber-security firm Crowdstrike, saw global supply chain operations significantly disrupted, with the fallout expected to take weeks to fully resolve.

Thousands of flights were grounded or delayed at major air freight hubs in Europe, Asia, and North America, creating severe impacts on the complex air supply chains.

Experts warn that planes and cargo are not where they should be, leading to extended recovery times and depending on the scale of the IT failure and current market conditions, these disruptions could take much longer to resolve than the duration of the outage itself.

This situation is further exacerbated by limited airfreight capacity, with global demand increasing by 13% in June compared to 2023, with the surge in demand largely driven by traffic from China to Europe and the US, putting additional strain on already limited available capacity.

While sea port operations were less affected, initial disruptions were reported in several European container terminals, including Poland’s Baltic Hub, Felixstowe and Rotterdam. These ports have since recovered, but the main issues could lie inland with truck and rail services, potentially increasing congestion if containers cannot be moved in or out of the ports efficiently.

Some air cargo operations are gradually returning to normal, with ground handler Swissport and Lufthansa Cargo reporting only minor impacts. However, Schiphol Airport and US airlines such as Delta, United, and American Airlines faced significant disruptions, with hundreds of flights cancelled or delayed, including 700 cancellations by Delta on Monday.

While most airlines have resumed operations, residual delays are anticipated due to the sheer number of disrupted flights.

Supply chain experts are concerned about the long-term effects of the Crowdstrike outage on global deliveries. The Chartered Institute of Export & International Trade warned that the disruption could create further problems in planning and scheduling for importers, exporters, and consumers globally. Time-sensitive air freight is particularly affected, with one thousand flights cancelled worldwide, by mid-morning on Friday.

Although a fix has been deployed by Crowdstrike, the full resolution of the outage issue may take some time, as IT staff may need to access individual machines to remove the faulty update.

The fallout from the outage has once-again highlighted the vulnerability of global supply chains and as the industry works to recover, the importance of robust contingency plans and marine insurance cannot be overstated, ensuring protection against financial risks and maintaining supply chain resilience in the face of unforeseen challenges.

To learn how we can develop and support your supply chain resilience or for more information about our Marine Insurance products, please EMAIL our Chief Commercial Officer, Andy Smith.

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Taking track & trace to the highest level

Jun 12, 2024 | , ,

Metro’s multi-award winning supply chain management platform, MVT, has been optimising supply chains for over two decades and the latest release of its AI-powered track & trace module is a Masterclass in shipment visibility.

MVT is a global operations platform, which has been designed to simplify supply chains, with a wide range of modules including customs automation, DC delivery management, PO management, CO2 reporting/offsetting and track & trace.

Conceived, developed and supported by Metro’s technical solutions team, MVT embraces leading-edge technology, including Artificial Intelligence, machine learning and automation technology to power its wide range of modules.

Metro customers have been automatically transitioned to the latest version of the track & trace module, which was released on the 20th May 2024, making it even more intuitive and easier to navigate, while improving the overall user experience.

There are over a dozen enhancements and new features, including a new landing page, which provides a visual dashboard for high level reporting, with easy drill down access to live shipments and a zoomable global map view, with AI tracking for the most accurate location fix.

Because Metro customers are busy, there are notification tools, which alert them to recent changes and critical shipments can be pinned to their dashboard for live updates, while document pop-ups gives them immediate access to anything important.

With a whole bunch of filters, download and data interrogation tools, Metro’s track and trace is much more than T&T, and it’s a free ‘added-value’ benefit to customers.

Click HERE to download the full list of the new MVT Track &Trace features, or EMAIL Ian Powell to arrange a demo.

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Importers concerned at cost of Brexit trade checks

May 16, 2024 | , , , , , , ,

Delayed five times by the UK government, post-Brexit physical border checks of animal products, plants and plant products through the Port of Dover and Eurotunnel were finally implemented on the 30th April 2024. However, importers of affected products express concern about additional costs.

The common user charge (CUC) was also introduced on the 30th April for commercial movements of animal products, plants and plant products through the Port of Dover and Eurotunnel.

It covers imports, goods in transit and goods eligible for sanitary and phytosanitary (SPS) checks at a government-run border control post.

The CUC applies to small imports of products such as plants, seeds, fish, salami, sausage, cheese and yoghurt. The flat-rate of £10 or £29 per commodity has been capped at £145, “specifically to help smaller businesses”, Defra said.

Health certificates were introduced in January on EU goods ranging from cut flowers, to fresh produce including meat, fruit and vegetables, but physical checks for the goods came into force two weeks ago.

Physical checks will be based on the “risk” category that goods fall into, so high-risk goods, such as live animals, will be subject to identity and physical checks at the border.

Products that present a medium risk to biosecurity will also be checked, while low-risk goods, such as canned meat will not require any checks.

But businesses, especially smaller companies, have raised concerns that the new checks from the EU could disrupt their supply chains and despite the £145 cap will increase their costs, with one importer interviewed by the BBC, suggesting “the checks would cost his business between £200,000 and £225,000 per year.”

Controls for SPS goods from the rest of the world are long-established and traders are aware of the responsibilities and inherent risk of goods moved from the rest of the world, but the extensions to goods moving from the EU is catching them out.

An additional CUC cost of £29 for a single commodity is minimal, but if you have four trailers carrying five or more commodities arriving every day then you easily add £200,000 plus to your supply chain.

There have been some easements with Customs, which allow fewer inspections and there are processes which can reduce costs, but preparation is key and the correct documentation is critical in ensuring a smoother frontier transition.

Metro are at the forefront of customs brokerage solutions, with our automated CuDoS declaration platform.

We can automate your CHED import notification, on the import of products, animals, food and feed system (IPAFFS) and simplify customs compliance, to safeguard your supply chain and cut costs.

To learn more about CUC or CuDoS, or how we can simplify and automate customs declarations for your business, please EMAIL Andy Fitchett, Brokerage Manager.

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The Carbon Border Adjustment Mechanism

Apr 17, 2024 | , , , ,

There are 195 signatories to the Paris Agreement to limit their greenhouse gas (GHG) emissions, though some including the EU and UK have undertaken to cut carbon emissions faster than others.

The EU’s Emissions Trading System (ETS) continuously expands to include new sectors to encourage industrial decarbonisation. However, it also drives carbon prices upwards, which risks carbon leakage if consumers switch from buying EU-produced goods to purchasing substitutes from non-EU countries, that have lower emission requirements.

To combat this, the Carbon Border Adjustment Mechanism (CBAM) came into place on 17th May 2023 and is expected to be fully implemented by 2026. It is designed to counter the risk of carbon leakage by imposing a charge on the embedded carbon content of certain imports that is equal to the charge imposed on domestic goods under the ETS.

The UK CBAM is about a year behind the EU’s version and means that specified goods imported into the UK from countries with a lower or no carbon price will have to pay a levy by 2027.

Like the EU CBAM, unprepared businesses who import or export to the UK could face higher costs and carbon reporting challenges.

The UK CBAM is designed to tackle the most carbon-intensive industrial goods imported to the UK, by putting a price on the carbon footprint of the manufacture of products in the aluminium, cement, ceramics, fertiliser, glass, hydrogen, iron and steel sectors, with a consultation currently determining the precise list of products in the CBAM’s scope.

The consultation launched on 21st March 2024 and seeks views on proposals for the design and administration of CBAM. It is available on this LINK and closes on 13th of June.

The calculation of UK CBAM certificate price will be based on the carbon footprint of imported goods. Companies exporting to the UK will be required to pay a carbon price, reflecting the difference between the carbon price in the country of origin (if applicable) and the UK’s carbon price (which is currently one of the highest of all major trading partners).

The measurement of emissions for UK CBAM reporting is likely to be similar to the EU’s methodology for calculating CBAM emissions and declaring CBAM emissions.

In addition to the upcoming UK CBAM for imported goods, the UK already requires companies to report their carbon information through the Streamlined Energy and Carbon Reporting (SECR) policy.

Our MVT Eco module measures and monitors the emissions of every shipment, by every mode, with offsetting alternatives, so our customers can work towards carbon neutrality in their global supply chain. 

The MVT Eco module incorporates powerful reporting tools, which may be adapted to measure liabilities under the ETS and CBAM regimes.

To request an MVT Eco demo or to discuss any of the issues raised here, please EMAIL our CCO Andrew Smith.

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