By Professor Alan McKinnon*
Can you imagine a world without trucks? It’s not a scenario that keeps many people awake at night, but perhaps it should. If, for whatever reason, road haulage operations were suspended, the resulting dislocation of supply chains would result in economic collapse within a few days. This is the conclusion of a study I have carried out of the likely impact on the UK of a total shut-down of its road freight system.
This eventuality is not as far-fetched as it may seem. In September 2000, steep increases in fuel prices provoked some UK hauliers and farmers into blockading oil refineries and blocking roads, causing a national crisis within three or four days. Since then strikes have seriously disrupted trucking operations in France, Spain and Portugal (June 2008), Australia (July 2008), India (January 2009), Greece (September 2010) and Shanghai (April 2011).
The trucking sector is particularly prone to this type of action. In most countries, its profit margins are very tight. This leaves carriers’ finances vulnerable to cost increases, particularly of fuel, whose price is highly susceptible to global events, and which typically accounts for around a third of total haulage costs. Although the trucking industry is highly fragmented, protests over prices, wages, taxes, tolls and regulations can precipitate mass action. Carriers and drivers know that such action can have a swift and debilitating effect on an economy giving them industrial ‘muscle’.
The conclusions of the UK study were far-reaching and profound. After only five days, the country would see retail stocks of most grocery products exhausted, almost all manufacturing closed down, all elective surgery in hospitals suspended, half the national car fleet without fuel, mail and parcel deliveries terminated and retail banking seriously disrupted by the collapse of the ‘cash logistics’ system. As the analysis made no allowance for panic buying, the reality would in all probability be far worse.
Individually, businesses can do little to protect themselves against such a sudden and systemic withdrawal of a vital transport service. Traditional business continuity techniques would provide only marginal relief. High-level contingency planning, involving close government and industry collaboration, would be required to deal with an emergency of this magnitude.
*Professor Alan McKinnon is currently Director of the Logistics Research Centre at Heriot-Watt University in Edinburgh and from January 2012 will be head of logistics at the Kühne Logistics University in Hamburg. He is Chairman of the World Economic Forum’s Logistics and Supply Chain Industry Agenda Council.
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