Disruptions from natural disasters are on the rise. In addition to being an incredible tragedy for so many families, the earthquake in Turkey is a wake-up call for supply chains. Despite several years of disruptions, many small and medium-sized businesses still rely on a single source for raw materials and supplies. The flexibility provided by using multiple suppliers means supply chain survival.
The earthquake caused significant damage to logistics and transport infrastructure. For example, the port of Iskenderun suffered severe structural damage, causing leading shipper Maersk to stop all operations in the area. Maersk recently ordered eight new ocean-going ships using only carbon-neutral fuels. They are now diverting all bookings.
Crude oil futures were up on Tuesday for a second day after the Turkish government ordered a shutdown of the Ceyhan oil export terminal. The port exported over 1 million barrels a day in January, with most of the oil being from Iraq and Azerbaijan.
One of these disasters will finally move companies out of the single-source habit that is now, for most, a thing of the past.