Freight Forwarders Pivotal in Supply Chain Risk Management

October 10th, 2018

With the sources of disruption to businesses and supply chain partners continually expanding, transport and logistics experts assume central roles in risk management.

All companies conduct risk management analyses of their activities in order to establish and update contingency plans for overcoming disruptions when they occur. But in an increasingly close-linked world, no business can mitigate those unwelcome surprises unless its partners have anticipated and prepared responses to trouble as well. That interconnected dependence is a major reason why freight forwarders and logisticians have made identifying and effectively responding to upheaval a key focus of service to clients.

Disruptions can arise from nearly anywhere and at any time – and provoke a cascade of potential consequences. In addition to immediate financial impact, for example, losses of time, supply chain backlogs and chaos upsetting careful planning can also have lingering negative effects. Significant or enduring disorder caused by natural, health, social or IT incidents, meanwhile, can also undermine the reputation of affected businesses, and generate legal action for unfulfilled contractual obligations.

Those eventualities loom even more formidable once all the various supply chain actors with risks of their own are factored in. Just as no single group can have significant environmental, social or ethical impact on the world if its partners have ignored those concerns, effective risk management must also be in place across the entire supply chain to ensure it protects all links comprising it.

Their critical position at the center of the supplier, production, transport and distribution web gives freight forwarders a particularly important role in risk management. In addition to examining their own units for potential disruptions and devising responses to those, freight forwarders must also intervene rapidly with effective transport and logistics alternatives when external turmoil breaks out and affects customers.

“When problems arise, our goal is to be as reactive, resilient, agile and effective as possible -- and to allow our clients to be likewise as a result,” says Patrice Dubois, QHSE Manager for Bolloré Logistics in Paris. “Whether it’s a volcano disrupting air traffic, strikes tying up major transport hubs or health concerns like avian flu creating disorder, you have to be ready to respond with fast, efficient and economical solutions.”

Given the rising range of threats – from natural calamities from severe weather to man-made damage like computer hacking – preparing for problems requires full, ground-up input from all supply chain participants.

In organizing their strategies, Mr. Dubois and his QHSE colleagues have created principal core analysis and activity continuity methodologies common to the entire group. Using those, managers of each site identify potential risks and scenarios; core operations that must be maintained or rapidly restored amid disruption; adaptive measures to ensure those functions are assured; and tests and upgrades to guarantee contingency preparedness. The approach provides Bolloré Logistics QHSE both a global vision of risk factors, and specific details of analysis and management plans at individual venues.

“We have more than 300 sites in the world, and roughly 300 different business continuity plans as a result,” Mr. Dubois notes. “Transversal measures are essential, but only go so far. From there, each management, IT and HR team must ascertain local risks and reactive solutions.”

Digitalization of activities at Bolloré Logistics sites worldwide also affords a clear and evolving picture of backup procedures once disruption occurs. The real time speed of that communication allows for immediate adaptation of Plan B deployment to increase efficiency and keep things running as close to normal as possible.  The value of that to clients is priceless.

“Companies have enough to do operating as usual and responding to unforeseen events on their own – they can’t afford to worry about supply chain partners,” Mr. Dubois notes. “We make sure they don’t have to.” 

Key Figures
  • 20%

    More fuel-efficient for the Boeing 787 and the Airbus A350

  • 70%

    of Urbanisation is expected by 2050

  • 27

    mega-cities are expected by 2050, with at least 10 million people, compared to 1...

  • +18,4%

    of growth for E-commerce retail market in Europe in 2015

  • 82%

    of goods are moved by road

  • 1 billion

    Population in Africa

  • 60%

    of Africa’s population will be urbanized by 2050

  • 7,5%

    of growth for Indian GDP in 2014

  • 4,9%

    of growth for African GDP in 2016

  • 6,1%

    of growth for East Asian GDP in 2015, the world’s fastest-growing region

  • 19 224 teus

    transported by the MSC Oscar, the largest container ship in the world

  • 396 m

    is the size of the MSC Oscar ship

  • 120 h

    is the Non-Stop Flight Record done by Solar Impulse

  • 4,5%

    of growth in 2015 for Global Airfreight demand