Jan Husdal

Supply chains and volcanoes

Posted by Jan Husdal Apr 19, 2010

The volcanic ash cloud over Europe has been on my mind for the last couple of days, and it's time for some thoughts.

 

Can we do without air traffic?

 

Many supply chains are exposed to natural hazards. And many supply chain managers are no strangers to managing suply chain disruptions after natural disasters. Usually, the hazards that can disrupt supply chains are in the direct  vicinity of the supply chains. If you are importing wine from Chile, earthquakes are on your shortlist of risks. If you're importing pineapples from the Caribbean, tropical storms are on your watchlist. The last 5 days however have been somewhat extreme. A natural hazard, a volcanic ash cloud, coming from a country as far away from most supply chains as possible, is able to completely paralyze European air traffic, and for that matter, many flights worldwide.

 

Holiday travelers and business travelers is one side of the disruptions. Air cargo is the other side. No flights also means no air freight, and at the airports stores and warehouses are probably full to the rim by now with fresh produce in danger of perishing. In turn, this may have widespread ramifications for the producers, as they may have to lay off staff, or even being forced out of business, as if the aftermath of the recession wasn’t enough. We haven’t heard much about the business impacts yet, because so far the focus has been on getting people home...or anywhere, for that matter.

 

This incident also shows how dependent airlines are on keeping their planes flying. No flights, no cash. After all, a flight is not something you can produce and stock somewhere. It is produced and instantly consumed at the same time. Cash in from one flight, is money in the bank for the next flight. Without passengers and without fligths, no airline can survive, sparking emergency talks on the impacts of the volcanic ash cloud in the EU. While they did lift the restrictions I do expect to hear demands for government actions (i.e. bailouts) soon. And, I do expect to see airlines, businesses and perhaps also insurance companies suing civil aviation authorities for closing too many airports, causing them to lose money or even go out of business.

 

While the threat of the volcanic ash cloud appears to be winding down somewhat, now is the time for reflections: What if this goes on for a prolonged period, say weeks or months of intermittent air traffic restrictions? Will we change our travel behavior? Will we start valuing slow travel again, like it used to be in the old days, before the aeroplane came? Will business meetings be replaced by teleconferencing and videoconferencing and will we perhaps realize that we do not need this face-to-face meeting that much? Maybe we really don't need to be a able get every where in just a matter of hours? Or having our cargo delivered asap?

 

The German newspaper Die Welt had an interesting, semi-humorous article about this some days ago. In a "what if"-scenario description titled Was passiert, wenn die Wolke viel länger bleibt? they look at the possible impacts of a volcano ash cloud scenario that lasts one week, one month and one year. I have made an attempt at translating it into English on my blog here:

 

What happens if the cloud stays much longer? Can we do without air traffic?

 

While perhaps a bit too much on the funny side to take it seriouly, it is still worth pondering. Enjoy!

Filter Blog

By date:
By tag: