Stuck Ship

Forrest Gump said it best: shit happens. Always has, always will.

On March 23, the Ever Given, a container ship the size of the Empire State Building, ran aground in the Suez Canal. The initial take is that strong winds and poor visibility caused the snafu. While a boon for meme creators and amateur web developers, the incident is no laughing matter.

The Suez Canal connects the Mediterranean and Red Sea, shaving ten days off the trip between Asia and Europe. It’s a shortcut for manufactured goods from Asia and oil from the Middle East to Europe. A vital artery, about 10% of global trade sails through it each year.

Dislodging the Ever Given could take a week or more. In the meantime, ships are piling up at both ends of the canal, billions of dollars of inventory sit idle and containers are in short supply. Minute by minute, the economic toll mounts.

Just-(Not)-In-Time

The beached Ever Given could bring factories to a standstill. That’s because modern manufacturing processes provide little buffer stock. Lean manufacturing and just-in-time inventory rely on receiving goods only when needed. Supplier networks become an extension of factories. This works when supply chains are operating smoothly. The tradeoff is heightened vulnerability to disruptions, which is only a strong gust of wind away.