Supply chain disruptions: flexibility measures when encountering capacity problems in a port conflict

• DOI: https://doi.org/10.1108/IJLM-03-2020-0123
• Published date: 01 March 2022
• Date: 01 March 2022
• Pages: 567-589
• Subject Matter: Management science & operations,Logistics
• Author: Sara Rogerson,Martin Svanberg,Vendela Santén

Supply chain disruptions:

flexibility measures when

encountering capacity problems

in a port conflict

Sara Rogerson, Martin Svanberg and Vendela Sant

en

SSPA Sweden AB, Gothenburg, Sweden

Abstract

Purpose–There can be many negative effects from a disruption in a central node of companies’supply chains,

such as a port conflict that reduces capacity. Strategies for disruption management include flexibility and

redundancy. This paper aims to analyse a supply chain disruption from flexibility and capacity perspectives.

Design/methodology/approach–A case study was conducted of the supply chain disruption caused by the

port conflict in 2016–2017 in Gothenburg, in which the port operated at a reduced capacity. Companies

importing and exporting goods, freight forwarders, hauliers, train operators, ports, shipping companies and

their agents were interviewed.

Findings –Various capacity problems (ports, links, container chassis, empty containers) were encountered

due to the port conflict. Flexibility measures such as node, mode and fleet flexibility can be used in response to

changes in capacity. Difficulties with applying flexibility are discussed.

Research limitations/implications –Although based on a Swedish case, findings are relevant for

disruptions or other types of disturbances in ports elsewhere and also in other important nodes in companies’

supply chains.

Practical implications –Actors influenced by disturbances in a port can increase their understanding of

potential capacity problems and flexibility measures. Readiness and timely action are important due to

competition regarding capacity.

Originality/value –The implications on the transport network surrounding a port, including many actors,

are explained, illustrating how capacity problems propagate, but there is some flexibility to manage the

problems.

Keywords Supply chain disruptions, Capacity, Flexibility, Port strike, Gothenburg

Paper type Research paper

Introduction

Supply chain disruptions caused by low-frequency high-impact events, such as earthquakes

(Chang, 2000), tsunamis (Park et al., 2013), hurricanes (Ergun et al., 2010), floods (Haraguchi

and Lall, 2015) or terrorism (Sheffi, 2001), can, besides the devastating impact upon people’s

lives, disrupt goods flows and have a profound and incalculable effect on companies’supply

chains. A severe supply chain disruption can be defined as “an unplanned event that disrupts

the flow of goods and materials within a supply chain to the degree that it exacts a cost on the

affected company, with cost being measured in terms of customer satisfaction, finances,

production, substantial employee effort, or other metric”(Macdonald and Corsi, 2013, p. 275).

Supply chain disruptions are important for companies to consider since, in times of global

sourcing, it is not a matter of if, but when they will occur (Deane et al., 2009).

In the last two decades, supply chain disruptions have received much attention within

overlapping research domains including risk, resilience and security. Several frameworks or

strategies for coping with both low- and high-frequency disruptions have been suggested

(Chopraand Sodhi, 2004;Hale and Mober g, 2005;Kleindorferand Saad, 2005;Berle etal., 201 1a;

Supply chain

disruptions:

port conflict

567

Funding: This research was funded by the Swedish Transport Administration (TRV 2017/96953).

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 9 March 2020

Revised 17 April 2021

24 September 2021

11 February 2022

Accepted 11 February 2022

The International Journal of

Logistics Management

Vol. 33 No. 2, 2022

pp. 567-589

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-03-2020-0123

Chang et al., 2015). These frameworks comprise various steps, including risk identification,

evaluation and management through different strategies. The strategies can be divided into

redundancy risk mitigation, achieved through buffers of finished goods or raw material, and

flexibility risk-mitigation, building in various types of flexibility in processes to manage

disruptions (Sheffi, 2005;Chang et al., 2015).

Although various strategies exist, disruptions could often be better managed (Macdonald

and Corsi, 2013). Companies rarely have plans for supply chain disruptions, as such occurred

long ago or impacted someone else (Berle et al., 2011b). Keeping plans for something that may

never happen is costly (Macdonald and Corsi, 2013), but Tang (2006) describes strategies

where benefits justify costs, for example, increasing flexibility in product, supply and

transport. Furthermore, plans may not be adequate. Before the West Coast strike in 2002,

Toyota arranged a buffer, but the strike lasted longer than expected and one of their joint

ventures had to be temporarily closed (Zsidisin et al., 2004;Lam and Su, 2015). Also,

determining appropriate strategies may be difficult. Chang et al. (2015) acknowledged the

many contextual variables influencing the appropriate risk-mitigation strategy as a

limitation. Empirical studies may help contextualize frameworks, but are limited on

supply chain disruptions (Blackhurst et al., 2005;Porterfield et al., 2012;Bode and Macdonald,

2017), maybe due to difficulties in collecting data for low-frequency events with high

unpredictability (Greening and Rutherford, 2011).

One type of disruption that could benefit from further contextualization relates to port

conflicts. Port conflicts are re-occurring global phenomena, with potentially severe

implications for supply chains. Port conflicts, due to labour strikes and countermeasures

taken by port operators, often cause disruptions with potentially large impact (Chopra and

Sodhi, 2004;Hale and Moberg, 2005;Tomlin, 2006;Dynes et al., 2007;Berle et al., 2011a;

Lorentz and Hilmola, 2012;Bradley, 2014). Consequently, non-vessel-related companies have

ranked port strikes as the worst port disruptions (Loh et al., 2017). In areas where natural

disasters are likely to occur, the severity of disruptions in ports caused by hurricanes is

higher, but conflicts are the second most important disruption, which, alarmingly, has a

rising trend in Asia (Lam and Su, 2015). The devastating impact of port conflicts may be

explained by the supply chain density, supply chain complexity and node criticality being

positively related to the severity of supply chain disruptions, as proposed by Craighead et al.

(2007). Ports are central to global transport systems and should be considered critical

infrastructure (Cao and Lam, 2019). However, there are few in-depth studies on how

disruptions unfold due to port conflicts. Lee and Song (2017) suggested that disruption

management is overlooked in container shipping but is important as disruptions in trans-

shipment affect the entire supply chain. While Lam and Su (2015) describe mitigation

strategies, Lindroth et al. (2020) concluded that several risk management strategies from

literature were not used in practice.

A port conflict in 2016–2017 in Gothenburg, Sweden, received much media coverage. Far-

reaching implications were reported for importers, exporters (Bengtsson, 2017;Lundin, 2017;

Mellwing, 2017;Dagson, 2019) and other stakeholders, for example, hauliers (Wande, 2019)

and rail operators (Mellwing, 2017). During the conflict, the port operated at reduced capacity

(Gonzalez-Aregall and Bergqvist, 2019;Svanberg et al., 2021), and Lindroth et al. (2020)

highlight that limited trucking capacity created a bottleneck, suggesting that further

research is needed on capacity constraints. Also, Blackhurst et al. (2005) illustrated the

importance of capacity in relation to ports.

In summary, supply chain disruptions can have significant impact on supply chains.

While various strategies exist, such as flexibility risk-mitigation strategies, their use in

practice could benefit from contextualizing in specific types of disruptions. One type of

supply chain disruption that can have severe implications is port conflict. Capacity

constraints related to a port conflict have been pinpointed as relevant to study further.

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