Tag: Economic Risk

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Brazil Trucker Strike Paralyzes Economy Endangers Livestock

Rising fuel prices have brought the trucker strike in Brazil to its ninth day. Over the past year fuel prices have risen 50%. Drivers have parked their vehicles and refused to deliver food for both humans and livestock, medicine, and other essentials. President Michel Temer has called for national security forces to unblock roads and has called on local governors to do the same. Petrobras workers plan to strike later this week adding complications to the trucker strike. There are 20 billion chickens and 20 million pigs that are at risk of starvation with over 150 poultry and pork processing plants shut down according to trade group ABPA.

Strikes are a form of business interruption that need special attention. ISO 22301 requires that organizations address risks and opportunities relating to business continuity and business interruption events. Strikes can involve your own workforce, your suppliers, or you may a bystander. Assessing the risk of strikes in your business is essential, but you should not ignore third-party risk. What if livestock feed became unavailable for your farm? Would your delivery business be able to function if a trucker strike had blocked all the roads? Assessing risks caused by other parties or events such as a trucker strike or soaring fuel prices that could lead to protests should be part of your continuity plans. You could mitigate the risk by using your current plans for severe weather or pandemic disease since the outcomes of reduced ability to travel or available workforce would be the same. Transferring the risk is also a financial strategy.  Does your business interruption insurance policy cover strikes? In many cases you will need to buy added coverage for losses caused by a strike among your workers or for strikes at elsewhere that affect your business. Your policy review should include replacement of perishable goods, damaged equipment, and other losses.

Performing a risk assessment of your supply chain and including events caused by unrelated third parties is a crucial step to avoiding a disaster or continuity of operations event. Assessing the entire supply chain or key suppliers can be a complex project. Our consultants can assist you with assessing your supply chain, economic risk, and other factors that may lead to a disruption in your business. Contact us today and setup an appointment to discuss how

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Bill Bans US Government Use Of Huawei or ZTE

  • HR 4717 prohibits the US government from procuring  “covered telecommunications equipment or services”
  • Equipment made by Huawei Technologies Company or ZTE Corporation
  • an entity that uses any equipment, system, or service that uses covered telecommunications equipment or services as a substantial or essential component of any system, or as critical technology as part of any system.

A recently introduced bill in the US House of Representatives threatens to ban the use of ZTE and Huawei equipment by the government. It also prohibits contractors who use equipment made by those companies. Portfolio diversification is important in investing and business. A diverse portfolio of services would allow a supplier to continue doing business in the event of a product embargo. Supply chain risk should become part of your risk register for business continuity.

Contact us if you need assistance with establishing or updating your ISO 22301 program. Our certified professionals can assist with your business continuity needs.

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FRB FOMC Statement Leaves Interest Rates Unchanged

Today the Federal Open Market Committee announced.

  • Inflation measured on a 12-month basis is close to the Committee’s 2% objective.
  • Slow growth in Q1 is likely Transitory
  • Ex food and energy, consumer prices declined in March.
  • Target range for fed funds rate will remain at 0.75% to 1%.
  • Near-term risks are roughly balanced
  • Monetary policy is accommodative
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FRB Philadelphia survey beats expectations

The Federal Reserve Bank of Philadelphia announces results from the March Manufacturing Business Outlook Survey. The survey suggests manufacturing activity continued to expand. Delivery times and unfilled order indexes were positive. This suggests longer delivery times and an increase in unfilled orders.

  • Diffusion index 32.8 for March down from 43.3 in February
  • 44% of firms reported increases in manufacturing activity
  • 11% of firms reported decreases in manufacturing activity
  • 25% of firms reported increase in employment
  • 8% of firms reported decrease in employment
  • 60% of firms reported a labor shortage
  • 68% of firms reported skills mismatch between available workers and requirements
  • 47% of firms report positions open for more than 90 days

FRB Philadelphia suggests growth for the manufacturing sector on the region. Broad indicators read positive with most up from February.