Week Three discussion replies. Please reply to the TWO students discussion post. 250 word min.

Please reply to the TWO student’s discussion post. For your replies to others what else could you add to take the conversation further? and make more vivid for the other students.

Marcos Flores

Transportation disruptions are unexpected events that interrupt the normal movement of products through a supply chain. Transportation risk is the possibility that one of these events could happen and cause delays, higher costs, or lost products. According to Novack (2019), transportation plays an important role in creating time and place utility, so disruptions can affect the entire supply chain.

FedEx is a good example because its transportation network can be affected by severe weather, natural disasters, fuel shortages, geopolitical conflicts, and other events. FedEx states that these disruptions can delay shipments, increase fuel and maintenance costs, damage assets, and negatively affect its financial performance (FedEx, 2026).

On the financial side, a disruption can force a company to pay for expedited shipping, alternate routes, additional inventory, or higher fuel costs. From a service standpoint, transportation delays increase lead times and can cause stockouts or late customer deliveries. For example, if a FedEx aircraft carrying medical products cannot reach its destination because of severe weather, the company may need to reroute the shipment. Having contingency plans, shipment visibility, and alternative transportation options helps reduce these risks and maintain customer service.

FedEx Corporation. (2026).  2026 annual report. U.S. Securities and Exchange Commission. https://www.sec.gov/Archives/edgar/data/1048911/000104891126000105/fdx-20260531.htm

Novack, R. A., Gibson, B. J., Suzuki, Y., & Coyle, J. J. (2019).  Transportation: A global supply chain perspective (9th ed.). Cengage Learning.

Jerald Henry

Transportation disruptions occur when normal movement of goods is interrupted. Examples of these include strikes, port closures, severe weather, accidents, cyberattacks, among others. These disruptions are associated with multiple risks, or potential consequences, that during transportation of goods. Transportation disruptions are defined as events that stop, delay, change the route, or increase the financial burden of freight. These transportation disruptions can be financially consequential, as they influence inventory, production, sales, and cash flow. For example, delayed shipments can result in increased costs, need for additional storage, and overtime.

Further, supply chain disruptions negatively impact profitability and sales and can be defined as the “ripple effect,” which is a localized transportation failure that reaches a supplier or customer that is beyond the original impacted area (Katsaliaki et al., 2021). The European Central Bank also shares the same sentiment and supports the adverse effects that supply chain disruptions have on industrial production and trade, and increase the cost of goods. They have also supported that the global trade volume would have been 2.7% greater without these disruptive supply chain activities that occurred between late 2020 and September 2021 (Attinasi et al., 2021).

Service consequences are equally important. Customers experience missed production schedules and unfulfilled delivery promises. For example, the closure of the Port of Baltimore from the collapse of the Francis Scott Key Bridge in 2024 resulted in roughly 5,000 trucks diverting daily (Liu & Green, 2024). At a cost of $28 billion in goods, these ships and trucks caused delays and increased fuel surcharges for delivery customers. The Baltimore port is the main source of raw sugar for Domino Sugar, the largest importer of bulk sugar. Baltimore closure meant the Domino Sugar also had a safety stock of about six to eight weeks to minimize the risk of immediate service loss. Companies must rely on a network of backup transport dependent supply chains, as well as multiple alternative transport options, to maintain safety stock at the appropriate level and leverage real-time shipment tracking. Quick restoration of service and minimization of financial impact from service loss must be the priority.  

 

References

Attinasi, M. G., Balatti, M., Mancini, M., & Metelli, L. (2021).  Supply chain disruptions and the effects on the global economy. European Central Bank.

Katsaliaki, K., Galetsi, P., & Kumar, S. (2021).  Supply chain disruptions and resilience: A major review and future research agenda.  Annals of Operations Research, 319, 965–1002.

Liu, Z. Z., & Green, M. R. (2024).  Baltimore Bridge Collapse Tests U.S. Supply Chains. Council on Foreign Relations.