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Political Supply Chain recommendation There are 2 replies: View/Reply options

Aaron Virgil Woolridge Students

Political Supply Chain recommendation Original post: Sun 3/4/2012 at 7:52 PM

I believe a deal where the United Arab Emirates (UAE) would be allowed to control the United States Port operations would be a terrible idea. The most obvious reason for this is security of the United States. The security threat has the obvious problems that go along with it. However, as a business I would be concerning myself with the ability to survive a shutdown of some/all the ports.

A company would need to assume that one or more ports would shut down during the time the UAE had control over the ports. With this being a concern businesses would have to maintain a set of reserves that could be used in the event of a port shutdown. Not all products have the ability to be kept long term. This would cause an increase in waste for businesses. As products are being wasted companies will need to recoup this cost. This will raise costs of goods for United States consumers. When costs increase for consumers fewer products is purchased because there isn’t as much money to go around. If revenue/profits are smaller for companies this could lead to job cuts or businesses closing. The ripple effect may be a bit extreme but I believe it’s a solid reason for keeping the ports with the current London-based controller.

Joel Patrick Forck Students

Re: Political Supply Chain recommendation Posted: Mon 3/5/2012 at 2:22 PM, in reply to Aaron Virgil Woolridge

Aaron Virgil Woolridge wrote:

I believe a deal where the United Arab Emirates (UAE) would be allowed to control the United States Port operations would be a terrible idea. The most obvious reason for this is security of the United States. The security threat has the obvious problems that go along with it. However, as a business I would be concerning myself with the ability to survive a shutdown of some/all the ports.

A company would need to assume that one or more ports would shut down during the time the UAE had control over the ports. With this being a concern businesses would have to maintain a set of reserves that could be used in the event of a port shutdown. Not all products have the ability to be kept long term. This would cause an increase in waste for businesses. As products are being wasted companies will need to recoup this cost. This will raise costs of goods for United States consumers. When costs increase for consumers fewer products is purchased because there isn’t as much money to go around. If revenue/profits are smaller for companies this could lead to job cuts or businesses closing. The ripple effect may be a bit extreme but I believe it’s a solid reason for keeping the ports with the current London-based controller.

I agree with Aaron when he points out that the UAE company needs to have a sufficient amount of reserves in case the worst case scenario unfolds. If the U.S. government is going to hand over control to the UAE, they need to make sure the company handling the ports has sufficient reserves in the event of a terrorist act that could potentially cripple much of the trade economy in the U.S.

James Matthew Maynard Love Students

Re: Political Supply Chain recommendation Posted: Tue 3/6/2012 at 11:02 PM, in reply to Aaron Virgil Woolridge

Aaron Virgil Woolridge wrote:

I believe a deal where the United Arab Emirates (UAE) would be allowed to control the United States Port operations would be a terrible idea. The most obvious reason for this is security of the United States. The security threat has the obvious problems that go along with it. However, as a business I would be concerning myself with the ability to survive a shutdown of some/all the ports.

A company would need to assume that one or more ports would shut down during the time the UAE had control over the ports. With this being a concern businesses would have to maintain a set of reserves that could be used in the event of a port shutdown. Not all products have the ability to be kept long term. This would cause an increase in waste for businesses. As products are being wasted companies will need to recoup this cost. This will raise costs of goods for United States consumers. When costs increase for consumers fewer products is purchased because there isn’t as much money to go around. If revenue/profits are smaller for companies this could lead to job cuts or businesses closing. The ripple effect may be a bit extreme but I believe it’s a solid reason for keeping the ports with the current London-based controller.

I agree with you here Aaron. We can already see a version of having less money to go around due to the energy costs in the US. When the energy costs go up, costs of almost ever other good goes up due to transportation/distribution network costs going up. This leaves less money in the pockets of the citizens to spend on other things that they may have purchased before. A shortage of goods would only compound this due to supply and demand. This is especially true if a panic situation occurs.