Month: February 2024

133 Days

In this February 16 report, NBC news provides a two-minute summary of causes and consequences of disrupted flows serving the people of Gaza. More detail is available here and here and here and here. Particular midstream logistical complications are outlined in this January 8 report by the World Food Program’s LogCluster.

According to the United Nations Office for the Coordination of Humanitarian Affairs (OCHA), below is inbound freight flow to Gaza since October 7.

The precise number of truckloads received differs by what is counted when and where. For example, below is an accounting of truckloads by Coordination of Government Activities in the Territories  (COGAT). In either case, flows are insufficient to fulfil fundamental human needs of 2.3 million people trapped in the crossfire.

February 22 Update: Yesterday National Public Radio reported on Gaza food flows with details very similar to what this blog has reported since early January. I appreciated the confirmation drawing on alternative sources.

February 24 Update: The Brookings Institution has produced a brief, helpful overview of challenges involved in providing humanitarian support to the people of Gaza. Kevin Huggard interviews Tania Hary, CEO of the Israel-based NGO Gisha – Legal Center for Freedom of Movement. Ms. Hary’s observations are consistent with what has been reported here since December. I agree with her summaries related to context, causes, and effects. Ms. Hary also offers, “Only a cease-fire will allow humanitarian actors to even begin to address people’s needs in the strip.” A sustained ceasefire would clearly support much more effective flows of humanitarian resources . And… in catastrophic contexts — tsunamis, earthquakes, plague, war, and more — there is a need to conceive and commit to doing what can be done here and now to serve survivors. As the inbound flows reported below indicate, there is a desperate and urgent need for much more. But we begin each day with as much as creativity and courage as we can find — many in Gaza and nearby have now been doing this for over 140 days.

Personal Note: Given other commitments, this is likely to be my last post until March 2 or so.

February supply chain fitness update

Reality is superabundant. Where are we looking? Over what time period? To what do we give priority? Lots of different angles to consider. Each month I try to evaluate the current condition of big flows. Here is where I landed in mid-January. Below are three gross indicators. Farther below are are few links to a bit more detail.

One indicator of Upstream Capacity is Gross Domestic Product. According to IMF estimates and projections, global GDP per capita is continuing to gain. The chart below is rendered per current US dollars. The growth trend is even stronger and more evenly distributed on the basis of purchasing power parity. The rate of growth has, however, recently been very uneven and in many places (e.g., EU and China) much slower than pre-pandemic. (More and more.)

Mid-stream Capacity is clearly sub-optimal. Two major global trade channels are currently seriously constrained, even evolving toward chokepoints. According to the Financial Times, “in the week to February 5, arrivals by container ships in the Gulf of Aden [transiting Red Sea] were 92 per cent down on the average for the first half of December.” Throughput for the Panama Canal is roughly one-quarter below historic averages due to low water. Add-in various trade sanctions, simmering trade conflicts, and the occasional large scale labor action and export flows are clearly choppy. There is plenty of potential for improvement (and the opposite). (More and more.) Still… aggregated flows are currently huge and well-above pre-pandemic trends (see IMF chart through, October 2023, immediately below), even with the softer growth rate noted above (more).

Downstream Capacity: While the population growth rate is slowing, everyday there are still more people on the planet. Given economic growth (see above), these people have an increasing ability to purchase more thereby pulling and motivating more upstream capacity. As regular readers know, I consider pull capacity to be the key to healthy high volume, high velocity supply chains. The strength of US personal consumption expenditures has continued to surprise many — and support significant domestic and global flows. This morning’s release of the January Consumer Price Index suggests this support is unlikely to dissipate soon since the gap between pull and push (once again) exceeded expectations (more). The pull capacity — demand activity (expressed potential?) — of China‘s, Europe‘s, and Japan‘s consumers has disappointed many. But from a Supply Chain Resilience perspective, I mostly perceive sustained abundance of both demand and supply. For example, according to China’s National Bureau of Statistics, “In 2023, the nationwide per capita consumption expenditure was 26,796 yuan, a nominal increase of 9.2 percent over the previous year, and the real increase of 9.0 percent after deducting price factor.” 2022 was not a banner year of China and NBS is not always a reliable source, but here’s a positive — if not stellar — growth rate (more). Just in this century the percentage of people living in extreme poverty has fallen from 3-in-10 to a bit less than 1-in-10 (more and more and more). Projections for the future are shown below. Despite — of perhaps, because of — persistent increases in demand, supply has — usually, in most places, for most products — been able to keep up. For example, even with all the midstream constraints noted above, the January FAO Food Price Index fell once again.

Complementing — and mostly reinforcing — these mega-macro indicators, the US Department of Agriculture continues to forecast strong 2024 harvests, especially for global wheat and rice crops. Despite geo-political turmoil and very material flow complications (see above), natural gas and most fossil-fuels continue to be well-supplied at affordable prices. Freight prices are higher, but this has preserved (even reclaimed) freight capacity needed to fulfill the sort of robust demand described above. Where food, fuel, and freight can flow, much more is possible too.

This is not an MRI, but these fitness indicators seem surprisingly good to me. Given very real perils all around, we ought not underestimate systemic risks. But neither should we discount the strength and agility outlined above.

A no-win supply chain scenario?

Please consider this scenario: One-hundred twenty days ago a Magnitude 7-plus earthquake hit a dense urban area. More than 2.3 million people are crowded into a roughly 25 mile by 6 mile matrix between a treacherously rocky littoral and high mountains. Almost everyday since there have been multiple after-shocks, many between M6 and M7. At least 28,000 have been killed, more than 67,000 have been injured. Three-quarters of the population is displaced into tents and other temporary shelters. At least sixty percent of residential housing is now uninhabitable.

The grid is gone. Solar and fossil-fuel emergency generators continue to deliver sparse flows of electricity. The water network has been decimated. Telecommunications is unreliable and from time to time has been mute for several consecutive days. Every hospital has been seriously damaged. Four of five leading grocery distribution centers have been destroyed. Fifteen commercial-scale bakeries have survived or been reopened, but output is sporadic.

Freight routes through the surrounding — still seismically active — approaches are narrow and susceptible to unpredictable landslides. Maritime infrastructure has been destroyed, previous navigational channels are unusable. For four months now inbound flows of water, food, fuel, pharmaceuticals, medical goods, and other essential freight have been about two-thirds below ordinary pre-event volumes. Redistribution of this seriously reduced flow is slowed — often stopped — by recurring aftershocks, disrupted transportation networks, poor communications, lack of local trucking, and other usual suspects.

Significant supplies are now staged outside the impact zone, some as close as thirty miles away. But — so far — there has been no way to sustainably increase inbound capacity. The best available estimates indicate that at least 900,000 residents are “facing extreme food shortages, acute malnutrition and disease levels are excessively high.” Another 400,000 are on the edge of imminent starvation.

This is a dense urban area in an isolated geography that has been — is being — seriously disrupted by seismic activity. Mass evacuation is essentially impossible given currently available transportation/shelter capacity constraints and seismic-related impediments.

Many geologists perceive the seismic activity will continue. There is credible concern regarding the prospect of even more destructive seismic events. Your current strategic context is treacherous. Your strategic options are austere. The context could soon become even worse and your options could be further constrained.

Given this scenario: What is your Supply Chain Resilience strategy? How can you practically engage this intractable problem with creativity and commitment? What is the best you can do? Where and how do you focus? What are your triage principles? To reasonably advance your strategy, what are your minimum operational requirements? Given this scenario’s lack of detail, it is probably premature to outline your tactical priorities and sequence, but please flesh out your minimum operational requirements with concrete examples.

Of course, this scenario — except for cause and topography — mirrors what is happening in Gaza now (more and more and more and more and more and more). Does that change your strategy? Your operational requirements? If so, why? If so, how? Given your “why” answer, what should you — and I — do next?


February 13 Update: Flows go from bad to worse. Below is the OCHA update on truckloads. This contrasts with the COGAT update reporting 174 truckloads for February 12. This data discrepancy is sometimes resolved over a few days (but not always). This data gap is also wider than any I have seen previously. (More and more and more.)

February 14 Update: Today’s Financial Times gives considerable prominence to a so-called “explainer” headlined: Why Desperately Needed Aid is Failing to Reach the People of Gaza. If you have been reading this blog (here and here and here) nothing will be new to you, but it is a concise summary from a credible source. (More and more and more and more.)

February 15 Update: I have received several inquiries related to UNRWA activities in Gaza (and the West Bank and Jordan). Here is some recent background from the Washington Post. I previously addressed this issue in a January 31 Update. But my admittedly technocratic “response” is probably best articulated in the following statement of a core Supply Chain Resilience principle included in a December 9 post (well before the most serious critiques of UNRWA emerged).

Supply Chain Resilience acknowledges that contemporary high volume, high velocity flows of essential human resources serving large populations cannot be replaced, even by the most robust and best-organized relief operations. The only effective and timely way to serve large numbers of survivors is rapid restoration and adaptation of preexisting flows. The current situation in Gaza may be the exception that proves the rule. For sixteen years a huge, dense population has depended on robust, well-organized “relief” operations. Sixteen years of relief operations should have signaled an unsustainable situation requiring fundamental reform. But in the very present crisis, this humanitarian supply chain is the only “preexisting capacity” that has the irreplaceable ability to serve survivors.

For many years UNRWA has been the key source of last mile capacity for a significant proportion of the Gaza population. The middle of a flooding stream is not a propitious moment for changing horses, no matter how troublesome the current mount.

February 17 Update: Is available here.

Noto: Lessons still to be learned

On New Year’s Day the Noto Peninsula on the west coast of Japan experienced a significant earthquake. The US Geological Survey reported a Magnitude 7.5 quake. The main quake has been followed by more than 1500 aftershocks including one M6.4 and more than a dozen between M5 and M6. Today, February 6, for the first time since, all schools in the quake zone have resumed operation.

According to Ishikawa Prefecture, the quake resulted in 240 deaths, more than 1200 injuries, and at least 28,756 residential structures are now uninhabitable. One month after the earthquake more than 14,000 persons remain in 551 evacuation centers. Before the earthquake the population of the Noto Peninsula was estimated at roughly 350,000. (More and more.)

As the current map below indicates, the transportation network — especially on the north end of the peninsula nearest the epicenter — was (and continues to be) seriously disrupted in many places (here and here). Upstream supply chain capacity was not seriously impacted in nearby urban Kanazawa (465,000 persons) or Toyama (418,000 persons). Only about 150 miles away, seismic activity had no impact on the capacity organized around 2.3 million in metro Nagoya. Preexisting south-north flows using the Tōkai-Hokuriku Expressway were increased.

But this robust upstream capacity was detached from downstream demand by midstream transportation constraints. On January 5, I responded to some diagnostic questions with the following:

There are nodes of urgent need and nodes of available supply with very disrupted, diminished links in-between. The situation is mostly explained by damage/destruction of the road network in closest proximity to seismic epicenter(s). Given the innate limitations of the Noto peninsula and its landslide propensity, multiple chokepoints will not be quickly reopened, despite Japan’s well-practiced expertise in post-seismic road repair (here and here). The Asahi Shimbun reports (my rough translation): “Since large trucks cannot enter the Oku-Noto area due to damaged roads, light trucks are using a relay system to transport relief supplies such as water and food. With roads cut off by landslides , marine transportation has begun, but in the case of Suzu, the weather is bad and the water along the coast is shallow, making it difficult for Japan Maritime Self-Defense Force ships to dock.”  Yesterday the military used amphibious landing craft to deploy heavy equipment and some shelf-stable meals into hard-hit Wajima City.  But neither volumes nor velocity are sufficient to fulfill increasingly urgent human needs.  It is very tough to reestablish sufficient flows without the recovery of preexisting flow capacity — which in this case consists of a channel involving surface roads, trucks, and truckers.

While this may sound/seem obvious, there is a persistent tendency to discount how much an effective emergency response depends on commercial flows (almost always involving many trucks) — especially with a six figure population of survivors and even more when dealing with potentially catastrophic impacts. Japan has more experience with this reality than most and there is still a stubborn focus on volume and velocity of relief supplies in place of commercial flows. It is not a competition. Both will always be needed.

Response to the Noto Peninsula earthquake did demonstrate lessons-learned from the 2011 Triple Disaster. Then commercial flows were actively suppressed for at least ten days. Last month commercial trucks — and even mobile retail services — were deployed quickly. Within 72 hours most convenience stores were open and supplies were being surged into the impact area. This included some so-called “Push Mode Support” procured by the national government being delivered by major manufacturers, distributors, and retailers using their own transportation assets (here and here).

Several hot washes on Noto have already been undertaken (here and here). Serious after-actions will eventually be done. One of the most important strategic issues is to consider what our experience in this less populated, rather peripheral place tells us about what will be necessary when a similar force envelops ten-times the population and the high capacity supply chains embedded in and near the very hard-hit place? I expect that what we will see is profound and urgent downstream demand, deeply diminished midstream flow capacity, and upstream push capacity flat on its back — unless we take appropriate action today, tomorrow, and everyday between now and then.