When businesses set their strategies and budgets for the year ahead, they typically base assumptions on normal market conditions and “known knowns” — to borrow a phrase from Donald Rumsfeld — with allowances made for anticipated world events and pressures. However, sudden geopolitical developments can test even the strongest business plans and contingency measures.
Normal operating processes and established ways of working are immediately placed under strain, often to breaking point. In the case of the latest major incident affecting the shipping industry, regional conflict in the Middle East has rapidly become a global issue. Individual vessels are being blocked, while some countries’ ability to export goods from the Gulf has been severely disrupted. Yet the shockwaves are felt instantly across international markets.
In recent conversations with members of the MFA, we have been listening closely to how businesses are managing this challenging period. Insurance brokers, for example, are asking important questions of their clients regarding cover and exposure. Does a bunker supply company have sufficient protection for asset damage in a war zone? Credit lines are being stretched to their limits, requiring urgent review and careful assessment as prices spike throughout the commercial supply chain.
Legal clauses, including force majeure provisions, are also under discussion. Are these clauses being applied correctly, and are companies fully aware of the implications of invoking them during periods of supply disruption and demand shortfalls?
MFA Partner members are keen to explain the products and services available to support businesses during this period, including alternative fuel solutions and price-hedging strategies to assist cash flow management in increasingly unpredictable forward supply markets.
These are the times when companies must review policies, procedures, and long-established practices during management meetings.
At the MFA, we provide professional support to ensure Managing Directors and senior departmental leaders have access to the latest solutions, expertise, and products needed to support their businesses during critical times.
Join the MFA and speak with our members for guidance and support.
