I remember sitting in a movie theatre, mesmerized and scared witless, back in 1995, as Dustin Hoffman, Rene Russo and a pre-Jerry Maguire Cuba Gooding, Jr., ran around in yellow PPE trying to contain a voracious disease very, very similar to the Ebola virus.
Although the film may not have been the greatest (it gets a 6.5 out of 10 on IMDB.com), it sure was scary – more so than any horror flick, for me, since it could happen seemingly anytime, anywhere…and the threat was real.
Now, unfortunately, this type of threat has become painful reality in West Africa, mainly Guinea, Sierra Leone, Liberia and Nigeria, in the form of Ebola, having claimed more than 1,000 lives and several news cycles. But Ebola not only puts humans at risk, it also threatens supply chains and global shipping.
As my colleague Thomas Kase at our sister site SpendMatters put it in his recent analysis, “it seems most prudent to add [Ebola] to the list of factors (political, natural disasters, geological events, legal, financial, bankruptcies, corruption, crime, violence) that are part of better risk management solutions.”
Thomas describes how two supply-chain solutions providers, Riskmethods and Concur, can mitigate risk effectively when layered over top of one another. Riskmethods’ solution can “load all your company’s locations…or your suppliers and their locations, shipping lanes, and so on. At the end of the exercise you have a world map with a lot of dots and connecting lines,” which gives a company good visibility at a corporate entity-and-transportation-lane level. Concur’s solution, then, gives you visibility into your employees, their locations and movements.
This, Thomas says, is likely as close as a corporation can get to fighting the pandemic for its own preservation.
However, the article quotes the managing director at Riskmethods, Heiko Schwarz, as saying about the Ebola threat, “There is very little commercial activity in the affected region, so few companies care about this right now.”
According to Simon Jaques, behind the blog “The Trade, Shipping and Finance Wizard,” that’s not the case – especially for players in the global aluminum industry.
Alcoa, Rio Tinto and Rusal are some of the aluminum producers that depend on the raw materials coming out of Guinea, one of the hardest-hit Ebola zones, and according to Jaques, the grades of raw materials used in aluminum production (such as alumina and bauxite) coming out Guinea are some of the best in the world. “In the Republic of Guinea, the government cash-receipts depends on Bauxite and minerals exports (several sources say by more than 80%-90%),” writes Jaques, which would get hit hard if shipping gets hit by health security certificates, detention and quarantining, among other measures.
Clearly, those big boys must have great corporate risk solutions already at play, but like Thomas noted, virus epidemics feature their share of unpredictability when it comes to supply chain risk. So far, Alcoa Canada and Rio Tinto Alcan aren’t reporting any official hangups, maintaining that “everything is under control…”
However, Ebola’s no joke when it comes to transportation lanes. There have already been reports of international shipping lines suspending shore leave and crew changes in affected countries. According to Jacques, “The Argentine Chamber of Pilotage has said that from 15 August its members are not to board any vessel arriving from Ebola infected countries unless the vessel has obtained free pratique and clearance by the Argentinian Sanitary authorities; and other countries, such as Brazil, have issued guidelines for procedures to be adopted in their ports.”
Under the New York Produce Exchange Time Charter of 1946 and 1993, approved by the Baltic and International Maritime Council (BIMCO) and Association of Ship Brokers and Agents (ASBA), rules are laid out as to what quarantine and “free pratique” mean for ship owners under a “voyage charter.” Basically, “where a ship is placed under quarantine, it will not be considered ready because the quarantine will prevent loading and discharge and the charterers will not have unrestricted access to it.”
Let’s hope those types of hangups don’t affect the aluminum raw material shipping lanes enough to cause major supply chain headaches.
Why is MetalMiner an Authority on Aluminum? Find out here.