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Global Supply Chain Entwined With Political and Economic Stability

May 14, 2009
By Henry Kenyon

Recent news about piracy near the Horn of Africa is only one example of the disruptions to the global supply chain that will have expansive and far-reaching effects, according to Stephen Carmel, senior vice president, Maritime Services, Maersk Line Limited. At the opening presentation on the final day of the Joint Warfighting Conference, Carmel said that because the global supply chain depends heavily on information technology today, cyberattacks are increasing as a vulnerability to the transport of goods. He explained that unlike in the past when these disruptions could be linked to an individual incident or adversary, today it is increasingly difficult to isolate the cause of the disruption.

While many of the conference sessions focused on asymmetric threats, Carmel stated that he prefers to think of asymmetric opportunities. For example, Russia will only be able to transport its oil through pipelines to a Chinese refinery. As a result, China's future oil supply is guaranteed. However, the globalization of trade and the interaction it involves is a growing reason for instability in nations around the world. The failure to prepare for increasing instability is dangerous, he added.

Emphasizing the ubiquitous link of the global supply chain, Carmel stated, "A stoppage anywhere is a stoppage everywhere. Everyone is on the grid." A point that is often not addressed is the military's dependence on this supply chain, and this is an issue that must receive more attention.

On the other hand, too much attention is paid to determining how to respond to individual attacks rather than finding solutions to the root cause of the attacks, he added. For example, piracy based out of Somalia is the result of economic and political instability. "Until this changes, piracy will continue."

The U.S. as well as its allies must determine how to help the Somalia as well as other countries solve these problems to decrease piracy. "Instability occurs over time and not just in a single environment," he stated. As an example of this, pointed to issues developing in Nigeria.

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