Global supply chains are dangerously easy to snap

The global distribution system is extraordinarily efficient, thanks not least to the world’s oceans. As the British journalist Rose George documents in her book Ninety Percent of Everything, some 100,000 enormous freight ships transport 90 percent of the world’s trade. Trucks, railways, and distribution centers take over once the goods reach dry land. All of this is extraordinarily cheap. It costs a retailer less to send a shoe to Europe from a factory in Southeast Asia than it does to transport it from a local European warehouse to a shoe store in the same country.

This system means that consumers can enjoy steady supplies of cheap goods from any part of the world. About one-third of the food consumed in Britain, plus a large share of the medications consumed there, is imported from the European Union…That means that U.K. residents can enjoy fruit from Spain or Chile, electronics from China, beef from Brazil, lamb from New Zealand, and a dizzying range of other items, shipped around the globe every day of the year. Indeed, these supply chains provide the world’s growing middle classes with much the same items, all at a low cost…

Fortunately, the U.K. has time to plan for a no-deal Brexit meltdown—but an adversary won’t provide any such advance warning. Indeed, while there’s much talk about potential Russian military aggression against NATO member states or their partners, President Vladimir Putin could achieve a vastly more devastating result, at minimum expense, by disrupting the supply chains. Cyberattacks—whether perpetrated by a government or proxies—could wreak havoc in companies’ logistics systems, which organize the travel route of every product. Or, an adversary could sabotage harbor operations. For that matter, workers at harbors or distribution centers could simply go on strike. E-commerce is just as exposed as brick-and-mortar chains to supply chain disruptions…

Disruptions to global supply chains are, in fact, more devastating than a traditional military attack. “We assume that we’ll always have daily deliveries, and consumers have come to rely on it,” Marsden, the Cardiff University professor, noted. “But we only need to look at truck-driver strikes to understand the effects of disruptions to supply chains. The 2000 lorry-driver strike put the fear of God in the [U.K. Ministry of Defense].” Brazilians suffered a similar fate earlier this year, when a trucker strike caused food and fuel shortages. When President Michel Temer responded by sending in the Army, commanders discovered that they, too, were short on fuel. An adversary could bring a country to its knees without dispatching a single soldier.

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