Exclusive Interview: Third-Party Risk & Compliance Expert for Dun & Bradstreet Addresses Port Crisis

As we reported earlier in the week, when operations were suspended indefinitely last month at China’s Meishan terminal in the Port of Ningbo-Zhoushan, industry analysts were quick to detect a complex dysfunctional trend.

We noted at the time that the event triggering this port’s closure was due to another outbreak of COVID-19. But all major Pacific Rim ports are vulnerable to a host of similar disruptive events.

“We are at a critical moment in time as the continuation of port and terminal closures is further weakening an already fragile global supply chain.” Says Brian Alster, General Manager, Third-Party Risk & Compliance, Dun & Bradstreet. “The immediacy of the moment often takes away from the importance of planning for the future.”

In this exclusive SCMR interview, Mr. Alster expands on his observations.

Supply Chain Management Review: How can U.S. shippers best respond to this crisis?

Brian Alster: We are at a critical moment in time as the continuation of port and terminal closures is further weakening an already fragile global supply chain. Dun & Bradstreet recommends taking an immediate assessment of a company’s full supply chain, asking:

1. How many tier 1 and 2 suppliers do you have in your supply chain that have been negatively impacted by this incident in the region?
2. How urgently do you need the goods that are currently backlogged in and around the Ningbo-Zhoushan region?

Based on these answers, supply chain leaders can then develop a plan to identify alternative suppliers in non-impacted regions of the world.

SCMR: What steps must be taken to mitigate risk in the future?

Alster: Far bigger than the immediate steps for remediation, supply chain leaders should be asking themselves how they can mitigate the risk of future impacts to the delivery of goods and materials in the coming year. It is a given that port closures will continue as the spread of COVID-19 and other unexpected events persist, and the ramifications to companies’ bottom lines will continue to increase as shipment costs and incremental time needed to receive raw materials and goods becomes a major component of overall supplier costs. In the long-term, Dun & Bradstreet recommends three key actions:

1. Develop a risk-assessment plan to identify and monitor risks across all tiers of the supply chain
2. Continuously monitor and be transparent with their company about the financial and operational health of your partners
3. Invest in technology that digitally transforms a supply chain, offering real-time data insights so that issues can quickly be identified and data-driven decisions can be made to pivot operations and mitigate further risk.

Proactively taking action on these steps – and overall, creating a more modern supplier operation – will support companies in creating a more agile supply chain that can withstand any unprecedented events in the future.

SCMR: Does the congestion in Southern California ports reflect this situation in China?

Alster: The vessel bottleneck at the Pedro Bay ports of Los Angeles and Long Beach are due to an exponential increase in demand for consumer goods as a result of COVID-19. In fact, there’s been a significant increase in consumer goods purchases now that many U.S. residents are working from home and are more frequently shopping online for items such as home improvement and workout products, apparel or furniture. Additionally, retailers are importing goods and stocking up on their inventory ahead of schedule to prepare for the holidays, fearing that goods may not arrive in time for peak shopping season. This demand has caused a backlog in vessel shipments coming to the U.S. from other countries that provide these types of goods.

SCMR: Any final observations?

Alster: According to Dun & Bradstreet data, we see an inverse effect occurring to U.S. ports when ports across Asia close. In fact, when a port closes in Asia, we see a dramatic drop in global supply chain productivity, thus immediately decreasing the number of vessels that are traveling at sea. The bottleneck then occurs when the ports across Asia reopen and delayed vessels finally arrive at U.S. ports alongside regularly scheduled shipments. For example, according to Dun & Bradstreet data, shipments from China to the U.S. are taking 5.2 days longer in August 2021 than in August 2020, and in some cases, where there is a longer duration closure, shipments are delayed of up to 22 days.

Brian Alster Bio:
Brian Alster is the General Manager of Third-Party Risk and Compliance at Dun & Bradstreet, a leading global provider of business decisioning data and analytics. In this role, Brian is responsible for the strategy, product development, and sales efforts for the company’s Third-Party Risk and Compliance product portfolio.

Brian has been with Dun & Bradstreet for 10 years and has held various leadership roles in Dun & Bradstreet’s Strategic Sales organization. Prior to joining Dun & Bradstreet, Brian spent almost 20 years in the financial services industry.

Most recently, Brian worked for JPMorgan Chase in the Small Business Card division, leading both customer analytics and new account acquisition efforts across all marketing channels. Prior to joining Chase, Brian spent 12 years at MBNA America and Bank of America, working in various consumer risk and marketing leadership roles in multiple lines of business, including Consumer Card, Mortgage, and Unsecured Lines of Credit.

Brian graduated from the University of Delaware with a bachelor’s degree in business and a minor in Japanese.

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