Sunday, July 21, 2024
Urgent action needed to improve supply chain resilience

Urgent action needed to improve supply chain resilience

The Covid-19 pandemic exposed the fragility of global supply chains, with resilience having become a critical issue facing many businesses and policymakers.

Today, rising geopolitical tensions and instability continue to underline the importance of making sure supply chains are resilient and secure.

Maximising resilience requires strategic decision-making and investment; unfortunately, here in the UK, it seems that both are still lacking.

Recently, the availability of ad-hoc slots at airports in London and the South East, including Heathrow, all but evaporated; this disproportionately impacted cargo-only flights, as compared to passenger flights, as they use more of these slots.

The reasons are varied and complex, and addressing the issue is a challenge, exacerbated by an opaque blend of regulations, government policies and conflicting commercial interests.

The result is that proper accountability for the consequences has been obscured.

Whilst some might disagree, one fact remains incontrovertible; the sudden absence of ad-hoc slots for freighters weakens resilience and is not in the national strategic interest.

This is especially the case for an economy like the UK’s, a trading nation critically dependent on the strength of its connectivity to global markets. Our ability to trade is fundamental to our prosperity and economic growth.

Without a holistic, long-term strategy to continue to expand and protect our trading links across the world, the likelihood is that the UK will stumble into yet more supply chain disruption, eroding our international competitiveness and suffocating growth. 

This is not to say that the UK Government is not concerned about resilience, but there is clearly a need to make it a higher priority. A strategy to expand and protect our international trading links, guiding the decisions of regulators, government and others, would provide the necessary vehicle.

At the dawn of a new era in sustainable aviation, it is an ambition we should not be afraid to embrace. Indeed, as we strive to inject momentum into the UK’s still too lethargic economic growth, many would argue it is an imperative.

Over the past year or so there have been too many incidents highlighting the low priority resilience has been given. In addition to the situation affecting ad-hoc slots for freighters, further examples include last summer’s system failure at National Air Traffic Services and the e-gates failure on 7 May, which followed a similar outage in 2023.  

Incidents and issues will never be eliminated, but the absence of a proper strategy to strengthen resilience by enabling structured, risk-based decision-making and investment is increasingly apparent.

The Telegraph reported that the recent e-gates failure was due to a communications mishap between the Home Office and their IT service provider. Many have been left aghast at failures of critical infrastructure due to (to paraphrase) someone forgetting to put 50p in the meter. Where is the effective back-up? Where is the system that kicks in to replicate the functionality of the system that has failed?

Nowadays resilience should not be characterised by the ability to implement contingencies based on antiquated and inefficient processes.

Returning to the availability of ad-hoc slots for freighters, in wider terms the issue arguably stems from a lack of airport capacity. A long-term strategy to expand and protect the UK’s international trading links might help remedy this (at least in part), as well as provide the structure needed to align the allocation of limited capacity with strategic economic interests (the Government’s latest consultation on slot reform does not even mention freight).

It might also help eliminate the interminable buck-passing that can happen when things go wrong, and which can impede progress towards solving longer term issues.  

Of course, cost is a familiar barrier to investing in resilience. Perhaps all too often the business case is only proven after things have gone wrong. This again underlines the importance of strategic and risk-based decision-making.

Absent this, the temptation to make decisions based on short-term expediency can be too great. This temptation is even stronger inside a government where fiscal challenges (and HM Treasury) dominate.

Unfortunately, the consequence is fewer proactive measures and piecemeal responses to issues when they arise, which then allows the inexorable cycle of further avoidable incidents followed by further avoidable costs (and finger-pointing) to perpetuate.

Our shared mission across aviation and government should be to break that cycle. Only by doing that can we achieve the resilience needed for trade and prosperity in an increasingly competitive, uncertain and dangerous world.

David Leighton FRSA
Chief Executive at Aviation Services UK

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