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Typhoons and Port Strikes and Damage, Oh My!

In a world of perpetual disruption, knowledge is power – particularly supply chain knowledge.

Because in today’s global marketplace, supply chain disruptions are the rule, not the exception. From natural disasters to geopolitical tensions, supply chain operators face challenges more complex and frequent than ever before.

So, what you know can help your supply chain leaders. What you don’t know can hamper them.

The Current State of Supply Chain Disruptions

Recent events underscore the volatile nature of global supply chains:

  • Typhoon Yagi has wreaked havoc across Asia. The storm damaged supply chain infrastructure in the Philippines, Hong Kong, Hainan (China), Vietnam, Laos, Thailand and Myanmar.
  • Hurricane Francine temporarily shut down the Port of New Orleans.
  • In the Western Hemisphere, the U.S. National Oceanic and Atmospheric Administration predicts an active hurricane season for the rest of this year.
  • As Tompkins Ventures warned here and here, a major Gulf/East Coast port strike is coming soon. The strike deadline, in fact, is Oct. 1, a little over a week away.

These disruptions are not isolated incidents. Instead, they are part of a larger pattern of instability that supply chain strategies must navigate.

The Power of Global Partnerships

In this challenging environment, working with partners who have a truly global presence becomes invaluable. Organizations like Tompkins Ventures have boots on the ground in over 50 countries. These experts can provide access to in-depth, real-time information about supply chain conditions worldwide.

That’s the type of supply chain knowledge you can use. This global intelligence empowers companies to:

1. Create proactive alternatives: Develop contingency plans before disruptions occur. Monitor weather patterns, understand distribution system limitations and maintain emergency stock.

2. Communicate with customers: Timely updates on shipping delays and their causes help maintain trust and manage expectations. Post-disruption, clearly communicate details about product damage, safety and future preparedness.

3. Continuously improve: After each disruption, assess your response and refine strategies. Make customers feel valued throughout the process.

Case Study: Typhoon Yagi and Vietnam’s Supply Chain Vulnerability

A recent report from CEL Consulting, a Tompkins Ventures partner, illustrates the power of on-the-ground intelligence. The study provides critical insights into the typhoon’s effects on Vietnam’s supply chain infrastructure.

A few years ago, companies were searching for key players in their “China + 1” strategy. They were not looking to replace manufacturing in China. But they were looking to augment Chinese sources in response to U.S. tariffs and trade wars. Beyond the cost of tariffs, diversifying their supply chains was a bid for increasing supply chain resilience.

Vietnam became an attractive addition. However, China’s supply chain infrastructure has a decades-long head start on Vietnam’s. Some manufacturers ran into challenges with port capacity, operations, warehousing, railroads and other issues. While the country has improved, any infrastructure damages could cause disruptions.

So shortly after Typhoon Yagi, CEL Consulting surveyed 216 companies, offering a clear picture of the situation. This kind of timely, detailed supply chain knowledge is crucial for companies with operations or suppliers in the affected areas.

Embrace Optionality, not a “New Normal”

As Tompkins Ventures has emphasized over the past four years, disruption is the new normal. CEOs and chief supply chain officers must abandon the search for stability and instead embrace optionality.

Optionality means having multiple alternate production, logistics and transportation solutions at the ready. No single strategy is sufficient in today’s complex global landscape. This flexible approach necessitates a combination of reshoring, nearshoring and friendshoring.

Supply chain risks are everywhere. And while it’s impossible to reshore or nearshore everything, it’s equally unrealistic to rely solely on geopolitically aligned partners. The key is to develop a balanced, flexible approach that can withstand various disruptions.

Think of your supply chains as a system with many branches and arteries. When disruptions close one branch, you must pivot to another.

The Right Know-How Builds Supply Chains that Thrive

In a world where supply chain disruptions are increasingly frequent and severe, knowledge truly is power. Partnering with organizations that have a global presence and deep local insights gives you a competitive advantage. Your company can stay ahead of potential disruptions, communicate effectively with customers and continuously improve resilience.

The path forward isn’t about finding a new normal. It’s about building the capability to thrive amidst constant change.

So, embrace optionality and leverage global partnerships. That way, your business can turn the challenges of short-term supply chain disruptions into opportunities for long-term growth.