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How Global Decisions Can Affect Your Supply Chain.

I recently read an article with regard to the P3 Network – comprising the world’s three largest ocean cargo carriers. First of all will this encourage other shippers to form a similar arrangement? If this becomes a reality are we talking monopoly and all of the disadvantages that would bring including rate-fixing?

It is interesting to note that the U.S. has signed off on P3 becoming effective in the U.S. and with the European Commission giving a thumbs up, the only country left to approve it is China, who is balking at signing off. Could the Chinese have a clearer crystal ball of what could go wrong with the P3 Network? Are they correct that we are looking at anti-trust issues because of the control that would be given to Asia-to-Europe container shipping?

I believe that the P3 Network is one of the most important supply chain decisions of this decade that need to be carefully thought through and addressed. The disruption in containerized shipping may be hanging in the wings.

This is a blessing and the curse of globalization, as the door opens for more opportunities, it also means the challenge of politics involved with working with major global players whose decisions have a major impact on one another. Keeping an eye out to external factors such as China opting out of the P3 Network is important to consider in every supply chain plan. What is the alternative plan B? How much risk is involved in each decision? Such questions should be asked and anticipated in advance as things change overnight.

  • By Brendan on 6.26.2014 at 4:21 pm

    Good insights. Thanks, John!

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