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The ART Of Business

The Supply Chain and the Bleed Business

Al-Qaeda is in the "Bleed Business". Along with their jihadist cohorts, the goal is to slowly bankrupt the U.S. economy over a period of decades.

The assuredness of their cause is not rooted merely in a bastardized version of Islam, where they sickly believe killing is the greatest of all endeavors. It is also found in their past success.

Bin Laden and his followers maintain the conviction that it was they themselves who brought about the collapse of the Soviet Union, because of their bleed strategy in Afghanistan. And, as evidence of this victory, they are certain God is on their side.

Front and center in this struggle is the global supply chain. The reasons terrorists choose transportation-related targets include:

1. The supply chain can provide a powerful, symbolic target.
2. It provides a unique, global stage.
3. It guarantees widespread, international media coverage.
4. Operations against the supply chain are relatively easy.
5. There can be enormous economic consequences.
6. It is a useful tool for revenge.
7. It is effective.

From a practical viewpoint, there are two ways terrorists can inflict damage.

The first is external, when the actual attack takes place. It is measured in human suffering as well as short-term, direct financial consequences. The 9/11 attacks killed nearly 3,000 people and are estimated to have cost over $2 trillion in insurance claims, supply chain delays, and stock market losses in the immediate aftermath.

Still, the more long-lasting blows from an attack originate from ourselves. They are internal. They are what we do over the long-term to deal with the political, economic, and psychological fallout from an external attack.

Whether it is the largest re-configuration of the United States government since World War II; the launching of the wars in Iraq and Afghanistan; or, the maintenance of artificially low-interest rates by the Fed, which helped to fuel the speculative bubble, each of these are tied to 9/11. Together, the internal costs are exponentially greater than the external ones.

The terrorists know this too well. This is why they terrorize. To bleed us.

Given the fact that there is no slowdown in the ability of Al-Qaeda to identify, recruit, train, and deploy terrorists for operations around the world, we should expect that the supply chain will remain in the crosshairs for decades to come.

TAGS: Supply Chain
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