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ESC – European Shippers’ Council

Tackling Brexit uncertainty & supply chain resilience

Shippers and logistics operators all over Europe and globally are spending time and money analysing the possible consequences of Brexit: congestion at ports, impact on transshipment operations, and new barriers to trade. Contingency plans can be made, but each one is very time-consuming to develop, and in the current climate of uncertainty there could be many scenarios that need to be considered.

Fortunately, MJC², in the framework of the CORE project, has developed the LARG+O real-time supply chain software toolset that is ideally suited for the Brexit situation. LARG+O stands for Lean Agile Resilient Green & Optimised, referring to the principles underlying its aims.

In the context of Brexit, global shippers using the major north-European ports need to plan for different levels of UK-Europe connectivity (depending on agreements reached), while intra-Europe shippers such as those from Ireland to mainland Europe face other decisions – “should I go through the UK or round it, or both?”. LARG+O allows these scenarios to be modelled in minutes, exploiting powerful multimodal supply chain optimisation algorithms to develop efficient logistics solutions.

Simulation exercises show how LARG+O responds to the recent congestion problems in northern European ports, disruptions to the rail network caused by the Rastatt landslip, and how the toolset can test the robustness of a specific supply chain to events such as labour disputes, severe weather, or political problems. For the shipper in question, the delays impact on import and export operations to most parts of the World. LARG+O reacts as follows:

• Predicts the impact on inventories throughout the supply chain (at the SKU level);
• Automatically chooses alternative multimodal routes, e.g. via different ports or on different services, that are the most cost-effective;
• Analyses the resulting impact of the mitigation strategy on costs and service level.

In these exercises, apart from developing contingency plans for a wide range of scenarios, a “spin-off” benefit is the identification of new trans-Atlantic shipping options which offered a faster door-to-door service, allowing safety stocks to be reduced by at least 1 week.

In fact, the availability of LARG+O and the other CORE tools based on artificial Intelligence, interoperable data pipelines, and sophisticated detection & tracking technologies, in relation to Brexit, is largely a matter of chance. When the CORE project started more than 4 years ago, the Brexit referendum had not even happened. CORE, which refers to “Consistently Optimised REsilient” global supply chains, set out with the target of developing new technologies and algorithms to make supply chains more resilient to disasters and other major disruptive events. Natural disasters such as earthquakes, floods and hurricanes were contemplated, as well as severe disruptions such as port congestion and industrial disputes.

In the context of Brexit, CORE gives shippers and logistics operators a powerful solution to not only plan ahead for different scenarios, but also to react optimally to unforeseen events and consequences. For example, “what if Dover-Calais transit times increase by X%?”, “what is the best alternative port?”, “do port X’s rail connections make it more attractive than port Y?”, etc. CORE allows different scenarios to be modelled and optimised with a touch of a button.

Apart from the strategic optimisation and resilience that CORE provides, operational cost savings for shippers and transport operators are substantial, not to mention the increased agility to respond to more commonplace disruptions such as delays, poor weather, and other events which occur daily.

Background information

CORE is a research project funded by the European Commission’s 7th Framework Programme, involving collaboration between more than 70 partners in Europe and the USA. Through its leadership, European Shippers’ Council, working with industry giants such as P&G, Maersk, and DHL, supported by leading research organisations such as BMT and TNO, and benefiting from niche innovators such as MJC², has enabled CORE to create powerful tools that can help shippers respond optimally to uncertainties and disruptions in the supply chain, man-made or otherwise.

The collaboration of high-tech developers such as MJC² with real-world shippers and logistics operators has led to a suite of optimisation tools that are both highly innovative and practicable.

This article was posted on September 10th, 2018 by Katsiaryna Kliuyeva under Uncategorized