Supply Chains Vulnerable to Suez Canal Disruptions

Could the unrest in Egypt disrupt activity through the Suez Canal?

Last week, Gen. James Mattis, head of the US Central Command responsible for military operations in the region, called closure of the Suez Canal "inconceivable." Still, if there did happen to be any disruptions, he said the US would respond "diplomatically, economically, militarily."

Although supplies traveling through the port of Suez have not been disrupted, rising tensions are forcing several shipping companies to modify their operations. For example, some companies have ordered ships not to change crews in Egypt, and port employees must leave their posts early to comply with the government curfew that begins in the late afternoon, according to The New York Times.

Will your supply chain be disrupted? Are commodity prices likely to rise?

As Jason Busch points out at Spend Matters, it's time to start considering risks like these.

Planning helps prepare you for the "inconceivable." Continued unrest in Northern Africa and the Middle East is bound to problematic, at least. But, the very real threat of escalating conflict warrants your attention, as well. Here is Jason's sobering synopsis:

"The most dangerous, potential near-term risk we've seen in recent weeks is the potential for recent activity to lead to unrest throughout the Middle East and Northern Africa. The impacts could be massive -- protests/violence/disruptions/war in or around Israel's borders, the overthrow of Western-friendly/Western-neutral governments in the region and safe harbor for terrorists to plot activities against Western targets. Rising oil, energy and general commodity prices will only be the beginning, should unrest spiral out of control in a region in which the US, Europe and China -- not to mention the UN -- are completely unprepared to intervene on anything but a localized scale."

TAGS: Finance
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