[#305-Appendix] Managing disruption of an inbound shipment
Taking a rail route closure example, I explain how an ideal process works when a disruption hits. The post covers the role of Transportation, Inventory, Supply, Production, and Order Management teams.
Welcome to “Supply Chain in Numbers”. This newsletter tracks significant numbers from the supply chain world. Primarily, this newsletter publishes five prominent numbers every Monday. In this “Appendix” post (published on Thursday), one of the numbers from the week is used to illustrate more interesting points.
In this week’s Supply Chain in Numbers newsletter, I covered a disruption of a rail track along the Poland-Belarus border.
$800 to $2,000 more per China-Europe container
Poland’s recent closure of its border with Belarus has caused significant disruptions to China-Europe rail freight. Over 130 trains became stranded. Logistics firms attempted to use alternatives, such as “Hamburg Special” routes through sea-rail connections via St. Petersburg, or southern corridors through the Black Sea and Turkey; however, these routes incurred higher costs — an additional $800 to $2,000 per 40-foot container compared to the original land route. By September 25, Poland announced that it would reopen the border crossings; however, lingering congestion and instability persisted.
‘Resiliency’ and ‘Agility’ are hot words in supply chain since pandemic days. It certainly existed before but they were brought to light only in the times of earthquake, tsunami, hurricanes, large scale strikes,.. and so on. The majority of discussions (and articles, papers) focus on how to prepare for a disruption. Typical levers are multiple sourcing, additional inventory, buffer capacity, and substitution options. But all these are planned before a disruption event occurs. Hence, these are often treated as insurance policy premiums.
No matter how prepared a supply chain is, there is always a new type of disruption to deal with. As I read about the closure of the Poland-Belarus border, I thought about how a well-managed supply chain would handle this situation. This post is about such an ideal supply chain.
Consider you are a Transportation Manager in an European company and you have inbound shipments (>3 containers per day, on average) come from China via rail. This is how the incidents should unfold, again, in an ideal setting.
Within 1 hour of the border closure announcement:
The Transportation Manager receives an automatic notification on September 9th, 2025, from the tracking system regarding the upcoming full closure of rail and road traffic, scheduled to take effect on September 12th. The notification has “high” risk index which was calculated based on number of shipments impacted.
The Transportation Manager contacts the freight company (or companies) to gather any additional details they can provide. Most likely, they are still evaluating the impact and will give a standard template answer.
The Transportation Manager opens the in-transit visibility system to get three lists: (i) shipments that are crossing before Sep 11th and hence should be safe, (ii) shipments that are crossing on Sep 12th and hence are questionable, and (iii) shipments that are on the way but won’t cross before Sep 12th
An internal short communication is sent with these three lists to key personnel, including Materials Managers, Production Planners, Procurement/Sourcing Managers, Supply Planners, Order Managers, Customer Service Team members, and Warehouse Managers. The communication also asks for each time to name one person to be part of the ‘Disruption Management Team’
The Transportation Manager instructs the team to look for three additional lists: (iv) shipments that are at the origin loading station waiting to be loaded, (v) shipments that are on the way to the loading station, and (vi) shipments that are waiting to be picked up to go to the loading station.
In the next 3 hours:
The Disruption Management Team holds its first meeting and reviews all the information available to date.
Confirmation of 3(i) and 3(ii) is received from the freight companies. Planners complete the assessment of 3(iii), i.e, shipments that are expected to be stuck in the closure. It is safe to assume that there is no way to get them out until the border closure is lifted. These shipments might belong to one of the three categories, and the solution differs for each type.
Raw material headed to their factory: The Materials Manager analyzes the impact on the production schedule after analyzing the existing stock situation. It is unlikely that there is an immediate impact (usually, there are safety stocks). In any case, the Material Manager works with the Production Planner or Scheduler to rearrange the schedule (depending on the other orders and raw materials available). If the labor schedule needs to be adjusted, it is completed accordingly. Potential financial and service impacts from overtime, delays to open orders, and downtime are calculated and communicated to the Plant Manager.
Shipment is an order fulfillment headed directly to the customer: Order Manager communicates the unfortunate delay to customers, along with an assurance that alternate plans are being evaluated and will be communicated within 24 hours.
Shipment headed to their warehouse to be stocked for forecasted demand: The Inventory Manager calculates ‘time to sustain’ with the existing stock and communicates any impact to open orders to Order Managers. Supply Planners are informed about the implications for safety stock, enabling them to adjust their plans accordingly.
In parallel, the Transportation Manager pauses loading of 5(iv) and asks the freight company for alternate routes. In addition, 5(v) is diverted back to the origin warehouse, and 5(vi)’s pickup is cancelled.
The Disruption Management Team lead sends a summary of the actions taken so far, along with a plan, to the company’s Senior Leadership.
In the next 8 hours:
The Transportation Team presents all alternate options (costs and service levels) like rail via Russia, air freight, and sea-rail connection. They gather all the costs and vessel/rail schedules. They can do this because they have contacts of different freight providers, which is collected as part of the ‘Resiliency Playbook’ design.
Transportation Manager publishes three scenarios for evaluation by all teams: (1) border closure is lifted by Sep 20th, (2) border closure until Sep 30th, and (3) border closure until Oct 15th.
Along with the scenarios, guidance is also given on the ‘after effects’ of border opening. Examples include: for every 2 days of border closure, it will take 3 days to clear the backlog; alternate routes will also be congested, resulting in a 15-20% increase in lead times.
In the next 24 hours:
Order Managers: work with Inventory Managers to see how customer orders that are impacted can be fulfilled for each scenario. If inventory is constrained, the existing customer segmentation framework is used to prioritize or ration the stock across all open orders. These plans are aligned with the Sales Team, and communication is sent to respective customers with the new Estimated Delivery Date and the rationale for this decision. All these communications follow a set of guidelines that are already available.
Transportation Manager: works with Manufacturing, Inventory, and Supply Planners to understand ‘cost of delays’ in terms of overtime, customer penalties, loss of contracts, etc. They can provide this information quickly using the Scenario Engine, which includes all real-time stocks and open orders.
The Disruption Management Team lead updates the company’s Senior Leadership in a meeting and provides all the essential details.
In the next 48 hours:
Transportation Manager aligns with Finance / Controller on activating alternate options after evaluating costs of ‘do nothing’ and ‘alternate costs’. Based on the financial situation, thresholds are set for each scenario, and the decision is made on when to activate each plan.
After one week:
The Disruption Management Team has held twice-daily meetings and updated all stakeholders. Customers are not left hanging for details. Senior Leadership trusts this team to do the right thing. Monitoring is in progress, and action plans are activated as the closure continues.
I understand many of these sound like fantasy land, but it is possible to get there. I also know that I have glossed over some tasks (e.g checking impact to production plan and creating alternate scenarios) as if it is a single click. There are nuances to each of the tasks referred here. The idea of the post is to illustrate from the lens of a Transportation Manager who is probably on the hook to orechestrating these events.
Your supply chain might not have all these elements ready, but at least you know how the ‘gold standard’ process works.
Thank you for reading. I am sure I have missed many points, and I would be glad to learn from you. Please reply with your comments.