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Yantian Port Congestion: How Can Shippers Navigate Another Major Supply Chain Disruption?


Yantian Port Congestion: How Can Shippers Navigate Another Major Supply Chain Disruption?

While the global logistics industry has not been a stranger to disruption this past year, the congestion at the Port of Yantian in China is starting to impact the market at an exceptionally high level. At the current pace, it’s going to be even more disruptive than the Suez Canal blockage this spring and the ongoing congestion at the Port of Long Beach/LA over the past year. This is due to the magnitude of the trade lanes and exports the port touches. Unlike the Suez Canal incident or other recent port issues, which have impacted a more limited number of regions and trade lanes, the Port of Yantian is a major export hub for multiple large markets like Europe, North America, Latin America and Oceania.

This disruption also came on top of an already brittle logistics system which is currently grappling with several unprecedented challenges, including equipment shortages and decreased schedule reliability, to name a few. Right now, the reliability that the vessel carrying your goods or expected to pick up your goods will show up on time is roughly 5%. At this time last year, it was around 80%+. And, as ocean carriers introduce more blank sailings or skip ports to start improving the reliability percentage, that means the freight that was skipped is now added to the backlog of containers that will flow into the next vessel.

It’s likely we won’t see a large shift in congestion until the demand levels out.  And while this market does not lend itself to a silver-bullet solution, there are things shippers can do to keep their supply chain afloat:

1. Be open to hyper flexibility

While flexibility is important any time global logistics are involved, the phrase ‘now more than ever’ holds true here. Currently, delays at the Port of Yantian are ranging from 10-15 days, which is a large jump from the 2-7 day delays we experienced just few weeks back.

Switching between ports, modes, and trade lanes has been an active strategy to avoid these delays, but shippers can’t rely on only adjusting once or twice since other shippers are also making these shifts as they compete for limited space. A good example of how this plays out is in the case of congestion at the Port of Oakland. Over the last few months, as the delays at the LA port were mounting, carriers started diverting sailings to Oakland. The result? Oakland is now also severely congested and suffering from the same unpredictability.

Fact remains, ocean carriers are deploying the most capacity on the U.S. west coast (USWC) routing, and as complexities in the interior of the U.S. continue to be exacerbated (i.e. lack of chassis and rail congestions), carriers continue to limit options for containers moving inland. Shippers need to continue to be flexible in enabling containers terminating on the USWC and leveraging transloading and trucking inland options.

When considering flexibility across modes, keep in mind air may be the solution for a few shipments, but it’s not a feasible option to shift all your ocean freight to air. Instead, exploring a mix of modes, like LCL + air, may offer a more realistic opportunity for your company in a more cost-competitive way. Having the right partner with a global suite of service and technology offerings coupled with scale and a strong inland network, is going to make the difference for supply chains in the market.

2. Prepare for ultra-prioritization

Prepare to make tough decisions on what freight is most important to move. This can be especially difficult for companies importing seasonal items, like patio furniture or pools since their selling window is limited.

With today’s demand, most shippers would classify all their freight as a top priority but shipping it all at once may not be realistic. It’s important to sit down and have those conversations now so when the opportunity presents itself for portions of your freight to move, like in an LCL shipment, you’re ready to make the call.

3. Don’t dismiss historical data

I’ve been in the business 20 years and never seen anything like this in a global magnitude, impacting almost all core trades. However, a unique situation does not mean historical data no longer lends itself to helping us find solutions.

The market will improve, and things will get better. However, these issues tend to be cyclical as we look at the data. We need to build resiliency around supply chain and continue to have options to navigate. While some of these events are hard to predict and plan, there are things that you can do, such as diversifying distribution center locations, sourcing, etc.

Final Thoughts

Until the high demand subsides, the above points will be crucial moving forward. C.H. Robinson has always been focused on working alongside our customers to help them succeed – and that’s no less true during times of incomparable volatility. It’s important to keep an open line of communication and to be open to creative solutions. As we work through this together, I encourage you to keep tabs on our data-driven market insights page and reach out to your representative.


Three Supply Chain Risk Management Lessons You Can Learn from the Suez Canal Block

The Ever Given vessel is floating, but the ship is not out of hot water. In fact, Egyptian authorities said it will remain in the Suez Canal until they are compensated by the vessel owners for the damage, labor, and disruption caused. Although the cargo on the Ever Given is still at a standstill, other ships have been able to freely move through the canal over the past few weeks.

Even still, the effects of the Suez Canal block will continue to ripple far beyond the cargo that remains stuck on the Ever Given. The influx of delayed cargo has disrupted offloading schedules at ports, delivery schedules for shipping companies, and even orders sent directly to consumers. As an industry, it’s imperative for us to learn from this and develop strategies to minimize the impact of similar blockages should they happen in the future.

Now that we can view the incident in hindsight, I wanted to share three risk management lessons you can take away from this to create a healthier supply chain.

1. The entire supply chain can be impacted by one accident

Although the Suez Canal handles only 13% of global trade, its blockage rippled through the supply chain worldwide. The BBC reported that 369 ships were stuck waiting for the Ever Given to be refloated. Not only did all those ships have significantly delayed cargo, but the disruption created a backlog of cargo that continues to be felt today at ports, warehouses, shipyards, retail locations, and ultimately, by customers.

For an example of the negative effects this sort of delay can have, let’s look at perishable deliveries. Perishables are on tight delivery schedules that ensure the product arrives at its destination fresh and ready for purchase. Adding a week to the delivery timeframe for perishables can kill the entire supply chain. Even if the goods are still delivered in acceptable condition, they will not be able to spend as much time on shelves, resulting in a massive amount of food waste and lost profit.

The Suez Canal block has also affected supply chains through the ships that were rerouted from the canal. These ships will arrive later than expected and have a higher potential for damaged cargo as they spent more time navigating through rough seas. This may delay shipments, cause inventory shortages, and create logistical difficulties at various offloading points.

We have yet to even see the full range of effects that this mishap will have on the global supply chain, but it has proven that any incident in the supply chain ripples out to points all across the globe.

2. Flexibility is key

Congestion and disruption can always get worse. Because shippers and even logistics experts can’t always predict exactly what will happen, it’s important to have a plan for every eventuality. Planning ensures that you remain flexible and meet your goals, regardless of the obstacles faced along the way.

To remain properly flexible, you need to have a broad range of options on hand. For example, at C.H. Robinson, we assist our clients through our suite of global services. We use a diverse array of services to ensure that our clients are supported, no matter the situation. For instance, when approaching ocean shipping, we leverage full container load (FCL) and consolidation less than container load (LCL) ocean services to create a diversity of options for our customers. Not only does this allow them to choose the option they desire, it also provides them with alternatives should anything unexpected occur.

Additionally, using the insights gained from logistics technology, in particular from supply chain connectivity technology, can help you see what a supply chain error or delay will affect, making it easier to get ahead of the effects before they derail your operation.

Ultimately, this is all in pursuit of resiliency. Because there are so many moving parts in the global supply chain, it’s unreasonable to expect that each part will always be in sync. An excellent logistics plan with an excellent logistics partner combine to ensure resiliency against even the most unexpected events.

3. A risk management strategy is no longer a luxury

Since the global supply chain has grown so large and so complex in the 21st century, risk management strategies have become a necessity. In most cases, customers expect that they are a given. In the case of the Suez Canal incident, none of the ships stuck behind the Ever Given ever expected that the Suez Canal would be blocked, and no one on the Ever Given expected to become lodged in one of the world’s most vital trade passages. Regardless of expectations, these accidents occurred, and everyone was scrambling to mitigate the risk.

Because no one can predict such incidents, it’s vital to have risk management strategies in place well before any issues occur. Even before the Suez Canal blockage, the importance of risk management for ocean shipping had been increasing. In February, we touched on the increase in vessel accidents over the past year. In that article, we discussed how to prepare for a vessel accident, and many of the same lessons that we imparted there apply to this situation.

Specifically, the two most important pieces of advice that carry over are purchasing maritime insurance and working with a provider with a global suite of services. We’ve already discussed the importance of working with a reputable, well-connected provider, but it bears repeating that a provider with a global suite of services can correct issues faster and more effectively than you could on your own.

Maritime insurance is something that we highly recommend purchasing whenever you engage in ocean shipping. Imagine how you might feel if you were carrying a large amount of produce that rotted while you were stuck in the Suez Canal. Even worse, imagine you were the managing company of the Ever Given, now being asked to pay up to $1 billion by the government of Egypt for the affair. If you found yourself in this situation and did not have maritime insurance, your company could quickly find itself sunk by a combination of lost revenue and damages. Even on a smaller scale, if you were shipping cargo through rough seas and a single container were lost or damaged, having insurance would save you from stressful financial headaches.

Spare yourself trouble by staying prepared

Issues like the block in the Suez Canal have a lot to teach shippers and logistics experts about the interconnected nature of global supply chains. To provide the highest possible level of service to your customers, consider the plans that you have in place for when something goes wrong in the supply chain.

Ready to protect yourself against supply chain disruptions? Connect with our global network of experts to see how C.H. Robinson can provide solutions for your business.

suez canal

Container xChange: Suez Canal Closure Increases the Pressure on Europe’s Ports

The anticipated box crunch at European ports following the closure of the Suez Canal at the end of March has been less severe than expected, according to Container xChange.

However, Europe’s leading box hubs are still receiving far more boxes than are departing.

The average CAx reading of incoming 20-foot dry-containers across three of Europe’s biggest ports – Rotterdam, Antwerp, and Hamburg – climbed just 3% in week 17 compared to the week before.

At Rotterdam, the increase in incoming 20 ft. dry containers was most stark, with box numbers rising +3.75% week-on-week. At Antwerp, the week-on-week increase was +3.5%, while at Hamburg it was +2.2%.

At all three ports, incoming box traffic has been heavy since March. In Container xChange’s Container Availability Index (CAx) an index reading of below 0.5 means more containers leave a port compared to the number which enter. Above 0.5 means more containers are entering the port.

Chart: Container Availability Index for 20 ft. Dry-Containers at the ports of Antwerp, Rotterdam, Felixstowe, and Hamburg in 2021. For more info, click here.

Hamburg has recorded a CAx reading of above 0.8 since week 9 of this year. In week 17 its CAx reading was 0.93, up from 0.48 in week 1. Rotterdam’s CAx reading has also risen steadily in 2021, climbing from 0.65 in week 1 to 0.74 in week 9 and up to 0.83 in week 17.

Antwerp, meanwhile, recorded a CAx of 0.38 at the start of the year, 0.78 in week 9 and 0.9 in week 17.

In contrast, the situation at heavily-congested Felixstowe has been dire all year. The hub’s lowest CAx this year was 0.87 in week 3. In week 17 it recorded a CAx of 0.95, up from 0.94 in week 16.

Dr. Johannes Schlingmeier, CEO & Founder of Container xChange, the world’s leading container leasing and trading platform, commented:

“Europe’s top container terminals have been struggling to keep congestion at bay, with incoming boxes outweighing outgoing boxes for much of 2021. The closure of the Suez Canal appears to have only made the box crunch at Europe’s hubs only slightly worse than it already was.

“What we’re hearing from our container leasing and trading members is that they find it increasingly difficult to book export containers with the carriers across Europe. It seems shipping lines are prioritizing empty containers in order to move the boxes back to China as fast as possible.”


About the Container Availability Index:

The Container Availability Index tracks millions of monthly container moves to monitor and forecast the global container equipment supply. An index of 0.5 describes a balanced market, below 0.5 a shortage of containers. For more information and weekly email updates, check out

About Container xChange:

Container xChange is the world’s leading online platform used by 600+ companies to buy, sell and lease shipping containers. Container users and owners use the platform to find containers, work with vetted partners and automate the operational workload. Started by Dr. Johannes Schlingmeier and Christian Roeloffs in 2017, the company has now more than 100+ employees with headquarters in Hamburg, Germany.

supply chain issues

What Warehouses Can Do to Minimize Supply Chain Issues

While the integral Suez Canal supply channel is no longer blocked, other supply chain issues remain. In fact, according to a recent report, 24 container ships – with a combined maximum carrying capacity nearly 10 times that of the Suez Canal ship – were recently anchored off the coast of Los Angeles and Long Beach holding up millions of dollars worth of cargo.1 While both instances of bottlenecks took place within days of each other, these traffic snarls are not the primary culprit of clogged supply chains. 

While shipping and data today are an important part of building successful logistics operations, these areas alone cannot solve real-time supply chain issues. If logistics operators and organizations don’t have the proper visibility into their warehouse data and operations, they are unable to make quick changes in response to supply chain snarls and backlogs. The lack of complete end-to-end visibility was also a reason so many manufacturers and suppliers suffered during the pandemic.2 Unfortunately for many organizations, this real-time visibility gap starts in the warehouse. 

Bridging the Gap Starts in the Warehouse

Various factors are being blamed for the recent supply chain disruptions – the size of ships and containers, congestion at the ports, and how narrow the canal channels remain. In fact, the Port of Los Angeles in North America is one of the busiest channels, but can’t regularly receive 20,000-container vessels due to the lack of infrastructure.3 Even so, fixing any one of these factors will not truly solve the primary causes of supply chain backlogs. 

Enhanced visibility technology into the warehouse, yard management and labor resources is yielding both time and cost savings for companies dealing with supply chain backlogs. For example, real-time access to data to determine which trucks have been sitting and for how long has become key to prioritizing and assigning tasks within the distribution center to improve customer fulfillment, minimize risks, and avoid costly and unnecessary fees. But without real-time visibility into the yard, appointments can get de-prioritized, delayed or missed. The warehouse is the heart of the supply chain, yet very few end-to-end tools are solving the problems of warehouse visibility and labor management. 

Shifting Supply Chain Strategies

While the warehouse is already the most technologically advanced area of the supply chain, it’s the transportation network within the supply chain that usually incorporates real-time data tools, leaving a massive gap in end-to-end supply chain visibility. Most operations find that there are simply too many data points and too much information to process to create real-time views that don’t time out and that are actionable when distribution teams need to make point-in-time decisions. Warehouse data without science is just noise, and analytics without actionable insights is just a spreadsheet. Shifting the strategy to fill the gap includes a series of industry-standard KPIs, live operations views, productivity metrics, inventory visibility, and labor management that’s actually helpful to enhance Warehouse Management Systems (WMS) already in place.  

As evidenced with the recent blockages, the impact of this lack of real-time warehouse visibility on the global supply chain is still in critical condition. What’s more is that even without substantial issues like canal blockages or a global pandemic, the supply chain regularly suffers from thousands of “mini disruptions” that both distribution operations and customers end up suffering from as a result.4 Without supply chain visibility tools for the warehouse, manufacturers, and suppliers suffer the same consequences from that of a channel backlog or global pandemic, but on an ongoing and daily basis.  

Supply chain executives must incorporate real-time warehouse visibility in their end-to-end supply chain optimization strategies to increase overall distribution efficiencies and reduce risks associated with problems from within the warehouse that arise not only from blocked canals, but from unseen blockage within their own four walls.  


Alex Wakefield is the CEO of Longbow Advantage with over 20 years of experience in supply chain technology and implementations including leadership roles at IBM and Blue Yonder (formerly JDA/Red Prairie). His focus is on enabling distribution teams to better manage, leverage and action their data across the supply chain through the use of Rebus, the only real-time warehouse visibility and labor platform purpose-built for the supply chain. 


The Suez Canal Crisis: Some Lasting Ripples Aren’t Making Headlines

It came down to physics: a sandstorm, shipping containers stacked too high (believe it or not, they acted like a sail), and a ship too big to spin around.

At the time of this article’s publication, it’s still unclear whether human error by the Ever Given’s captain is also partially responsible for the global shipping crisis caused by the 20,000 TEU container ship’s weeklong “vacation” in the Suez Canal.

Also at the time of publication, the crisis — which ended more than two weeks ago — continues to result in global shipping delays averaging five to six weeks.

I see two main areas where the ripples of the disaster will continue the strongest:

Increased pricing, decreased supply: The carriers are taking advantage of the situation and North American shippers are suffering as their equipment is being sent out empty to regions where the carrier can take a financial position and move those containers at greater profits.

In 2019, shipping industry profits came in at about a dismal -$12 billion. In 2020, they managed to flip it to +$14 billion — that’s not a trend they’re going to let go of easily.

Compounding obstacles: Shippers were stretched even before the Ever Given headed down the canal that fateful day, so adding capacity isn’t a viable solution. The previous problems hampering shippers are now exacerbated.

-The global shortage of shipping containers continues to cause a ripple effect of its own.

-Travel restrictions stemming from the pandemic continue to result in reduced air cargo opportunities.

-The above factors and more continue to overwhelm trucking companies, who face employee shortages and rising expenses.

North American recovery is also hampered by a lack of awareness on the global stage. Many companies headquartered abroad don’t understand the hurdles American vendors continue to face — for example, the price gouging. The United States is one of the only countries where the  government doesn’t oversee or own lines of transportation — in most others, it controls or owns at least cargo shipping and airlines — so vendors and logistics companies are dealing with rate hikes. On the other hand, those countries are also at risk of delays caused due to slow-acting governments entrenched in bureaucracy.

CTOs should be concentrating on finding other viable ways for customers to move freight. Plan for a delay of 5-7 weeks compared to your usual shipping estimates, for the foreseeable future. Air freight — despite the delays caused by the pandemic-crippled air travel industry — is probably your best bet for now. You might have to get your CPO and/or client to make some tough decisions based on how eager they are to get their product to market.

Your next priorities are forecasting and having your product line in order. Take note from restaurants and doctor’s offices and build healthy amounts of downtime and lead time into your shipments. At this point in the recovery stage, a strong enough hiccup can still cause a significant backtrack to the progress.

Even though everything is “fixed,” we’re not going back to normal in the near future. In our industry, the pendulum normally has a five-year swing for the upper hand between shippers and vendors. When it comes back down in our favor, it won’t be anywhere near the levels we enjoyed the last time it was our turn.


As Chief Transportation Officer, Carmen Gerace oversees all aspects of global transportation for BDP International, including the implementation of new transport solutions and product offerings while also developing future transport strategy. Throughout his 25+ career in the industry, he has held varying managerial and executive positions at BDP. Carmen is based in Philadelphia, PA, and can be reached at 

ever given

Lessons from the Ever Given for an Increasingly Turbulent Global Supply Chain

The Ever Given’s blockage of the Suez Canal, which accommodates 30% of the word’s daily container freight shipments, has been yet another reminder of how unforeseeable and remote events can dramatically disrupt one’s business. Although the canal’s blockage lasted only a few days, its effect on supply chains was global. The traffic jam it caused worsened Asia’s shipping container shortage, further delaying the export of consumer goods; spoiled countless goods sitting in transit; and temporarily exacerbated a global semiconductor shortage affecting countless manufacturing industries. Unsurprisingly, because the Suez Canal is a critical route between Europe and Asia, the hardest-hit businesses were those whose supply chains terminate in or pass through Europe.

Coming off the heels of a global pandemic, this latest disruption has many wondering how to shore up their supply chains to protect against the next unexpected event. Doing so, however, is an exhausting prospect—particularly as industries globalize, supply chains become more far-flung, and markets become more interconnected. Counterintuitively, the best way to bolster against unforeseen exterior events is not to plan for every event, but instead to take stock of what your business needs to survive. In the end, those plans that reflect and harmonize with a business’s needs are those most likely to offer protection during uncertain times.

I. Spend energy creating stability rather than predicting catastrophe.

Globalization-induced regional production specialization (for example, raw materials for semiconductors coming from Japan and Mexico and chips being made in the US and China) has increased the number of links in businesses’ supply chains, thereby increasing the likelihood of a weak link. It is easy to imagine any number of events that may cripple one’s supply chain, and recent history is filled with novel examples: a low yield potato crop creates a potato shortage, a clothing strike decreases the availability of certain clotheslines, a power grid failure halts the production of semiconductors, and a culinary demand for a local grain makes the grain unsuitable for livestock feed, just to name a few.

In one sense, recognizing the risk of the unforeseeable has had its benefits. For example, businesses have begun to hold the ostensibly pro forma provisions found in their contracts—like force majeure provisions in sales contracts and virus exclusions in insurance policies—in greater regard.  Unfortunately, however, as we have become more fearful of novel risks, these risks tend to dominate risk management deliberations more than they perhaps should. As the Suez Canal incident, COVID-19, and any number of freak incidents have taught us, the events that cause the most disruptions are ultimately those that are hardest to predict (and therefore prepare for). Thus, while companies must always prepare for the worst, management should not overly focus on what might go wrong at the expense of ensuring what must occur to survive.

II. Know yourself; know your tools.

An “I’ll have what she’s having” approach to protecting your supply chain is a recipe for failure. It ignores differences that create competitive advantages and it offers little protection in times of industry-wide disruption, in which industry norms are per se insufficient. The best risk management programs are born from a profound understanding of one’s business, including the central pillars of its operations and its competitive success. When it comes to supply chains, profiling risk requires more than merely asking where your widgets come from, although it certainly includes that. A prudent risk profile should conceive of all critical ingredients necessary to ensure your business’s continued success. For example, in the context of a dine-in restaurant chain, one should consider all that is needed to provide the desired customer experience, like air conditioning for those restaurants in warm climates.

There are any number of tools available to protect one’s business against risk. Staples include prophylactic due diligence, contract terms and conditions, insurance, and, where necessary, litigation. These tools are quite versatile, but it is important to avoid putting the cart in front of the horse. They are a means to an end and should be evaluated in light of your business’s specific and tangible needs rather than as a blanket of hypothetical protection.

A. Due diligence

As Ben Franklin famously observed, “an ounce of prevention is worth a pound of cure.” In that regard, due diligence is the keystone of any risk management plan. Due diligence is not so much a solution to risk, but rather a diagnostic tool to help determine the best risk mitigation strategy. For example, due diligence gives one the insight needed to restructure one’s supply lines to avoid chokepoints, tailor one’s insurance coverage to target serious risks or decide whether a risk is best left unmitigated (which it sometimes is). When performing due diligence analysis, not only should a business’s specific needs direct the investigation, they should also dictate the solution.

Take, for example, a car manufacturer’s need for airbags. One could attempt to mitigate the risk of a supply shortage by keeping a stash of extra airbags on hand. But as increasingly common “just-in-time” auto manufacturing practices suggest, doing so brings with it increased overhead costs from procuring and managing excess inventory. One may instead consider insuring one’s airbag supply (a practice discussed below) but at the cost of a premium. Likewise, one may consider diversifying suppliers to ensure any one supplier’s failure will not stop production, understanding that this would do nothing to protect against an industry-wide shortage. The correct solution for any given auto manufacturer depends upon countless variables, some of which are common among manufacturers, and some of which are unique to each specific manufacture’s needs and goals. All variables, however, flow from a first principle—one needs airbags to make cars. In that sense, due diligence can be described as the final step in understanding how your business works.

B. Insurance—Contingent business interruption

Among the armamentarium of insurance products available to protect one’s business, in the supply chain context, contingent business interruption insurance (CBII) is king. Whereas traditional business interruption coverage only covers interruptions due to physical losses occurring on the insured’s premises, CBII policies protect supply chains, often covering disruptions caused by distant natural disasters, industrial accidents, labor disputes, public health emergencies, damage to infrastructure, and sometimes even disruptions cases by upstream production errors or supplier insolvency.

When disruptions occur, CBII policies typically provide coverage for lost income, extra expenses (costs to end the interruption), and additional funds expended to mitigate the risk of further losses. CBII policies, however, are not a silver bullet against supply chain losses. CBII policies frequently limit the extent and duration of coverage—for example, only covering losses incurred after 72 hours of interruption, only covering 6 months of losses, or limiting coverage for losses in any given month to 25% of the policy’s aggregate limits. They also often require an exhaustive list of those suppliers to which the insurance will apply—the composition of which the insured should give the utmost thought.

When securing coverage for your business, it is important to have done the homework required to ensure your policy’s terms accurately reflect the type, source, and duration of the disruptions your business may endure. Carriers frequently dispute whether interruptions in fact took place. For example, a burger chain that could not make French fries due to a potato shortage would reasonably argue that without its quintessential side item, it is essentially unable to conduct business. A carrier, on the other hand, would argue that the loss of one menu item does not constitute a business interruption. Therefore, it would behoove the burger chain to obtain CBII coverage that specifically covers the loss of key menu items. Carriers also frequently argue over the propriety of replacement products (or cover) obtained to resume operations. Businesses should therefore consider the availability of certain types of cover when procuring CBII coverage to ensure whatever replacement the business is forced to buy falls under extra expense coverage.

Despite the comfort of having an insurance product specifically designed to prevent supply chain disruptions, it is also important not to think of insurance as easy money. Securing insurance and making claims are ordeals unto themselves. The first hurdle to securing coverage following a loss is to properly document one’s loss.  In anticipation of filing a proof of claim, it is imperative that insureds document any delays in the arrival or departure of goods, fluctuations in the purchase price or availability of essential goods, and/or fluctuations in sales prices and volume. Keeping such records is important due to the aforementioned time limits common within CBII coverage.  Should coverage litigation arise, these contemporaneous records will also prove to be invaluable evidence at trial.  In particularly complex cases, or where coverage is not entirely clear, it may also be worthwhile for insureds with sizeable losses to retain coverage counsel to assess the scope of available coverage and pursue their claim.

C. Contact terms—The specific and the general

Regardless of what provisions the parties may ordain to include, given the intricacies of modern supply chains, all supply contracts should carefully contemplate responsibility for distant supply chain disruptions. There are two ways to achieve this: drafting specific provisions in hopes of better elucidating the contract’s purposes and including general provisions to serve as a safety net.

Drafting targeted provisions to address disruptions ultimately benefits all parties by making the implicit explicit. For example, there has been significant litigation in the past year regarding whether the COVID-19 pandemic constitutes a “force majeure” under supply contracts. For the uninitiated, force majeure provisions are meaningless boilerplate. But too frequently they are invoked during unforeseen events in an attempt to excuse performance. The solution to their misuse is simple: don’t assume the strength of your covenants. If you desire an unqualified promise to deliver goods, your contract should say just that. Doing so ensures the parties are on the same page from the beginning. It also has the added benefit of encouraging greater due diligence, decreasing the likelihood of disruption.

In addition to including targeted provisions that make the obligations under your contracts clear, one should consider safety net provisions to increase your contract’s resiliency. One of the most common safety nets found in contracts are indemnities protecting against losses stemming from breaches. Indemnities, however, are far from infallible. For example, they do nothing to protect against an indemnitor’s insolvency. For that reason, it may be wise also to include a covenant to procure and maintain specific levels of insurance coverage—including contractual liability coverage—under policies expressly designating your company as an “insured” and likewise identifying specific contracts subject to the policies’ coverage.


If the Suez Canal incident has taught us anything, it is that anything can happen to disrupt a supply chain. The greatest source of strength for a business is its understanding of its unique requirements. As a business owner or risk manager, the responsibility falls on you to learn your business’s needs and to take nothing for granted. Only once you have attained a nuanced understanding of what your business needs to succeed can you make the best decisions about how to bolster your supply chains against risks, foreseeable and otherwise, using the tools available to you.


Andrew Van Osselaer, associate in the Austin office of Haynes and Boone, LLP, focuses his practice on the resolution of complex commercial disputes and regulatory investigations arising from clients’ commercial and industrial operations.

Wes Dutton is an associate in the Litigation Practice Group in the Dallas office of Haynes and Boone, LLP.

Egyptian Government Plans New, Improved Suez Canal

Los Angeles, CA – The Egyptian government has reportedly launched a new project to construct a “new” Suez Canal that will run for 45 miles parallel to the existing waterway.

According to the Head of the Suez Canal Authority,  Mohab Mamish, the new canal “will reduce passing ships’ waiting time from 11 hours to as little as three hours” as they move from Port Said on the Mediterranean to the Red Sea terminus of Port Tawfiq.

The existing canal is too narrow for two-way passage, so transiting ships are moved in convoys or use bypasses.

The original, sea-level canal extends for 102 miles and has been the major route for shipping moving between Europe, India and the Far East since it was completed in 1869 after ten years of work. In 24 hours, the canal can handle as many as 76 ships.

The Suez Canal, a major chess piece in international geopolitics for all of its 145 year existence, earns Egypt about $5 billion annually, important for a country that has suffered a reduction in tourism and foreign investment over the last three years because of Egypt’s continuing political tensions.

The new canal is expected to increase annual revenues to $13.5 billion by 2023, said Mamish. The total estimated cost of drilling the new channel would be about $4 billion and should be completed in five years, he said.

Egypt, said Mamish, will eschew using foreign companies to build the planned canal and instead use its own firms, a move expected to create several thousand, much-need jobs.

At the same time, Cairo has said a consortium including the Egyptian Army will develop an international industrial and logistics hub in Suez to attract more shipping and logistics business to the country.