Broken Chains

Lack of supply chain control laid bare.

Lynn Johnson
8 May, 2022

The global pandemic has laid bare how international free trade relies on fragile and poorly understood supply chains. These supply chains are optimised solely for efficiency and just-in-time availability and, as a result, lack both transparency and resilience.

Supply chains started to break down almost immediately at the beginning of the pandemic, causing basic items to be rationed in supermarkets. Adding to the strain, international, online shopping exploded. As lockdowns have ebbed and flowed in countries around the world, production and distribution in this global trade system has buckled.

The scale of the current disruption due to lockdowns in China, as highlighted in the image below showing how many vessels are waiting to enter the port of Shanghai (compared to a pre-COVID normal – second image), contributed to Amazon shares tumbling recently, after the company’s e-commerce sales fell over the year.

Companies, including Amazon, issue sustainability statements which ought to be based on supply chain transparency. Yet the last months and weeks have shown these same companies have little understanding or control of their supply chains; and these supply chain pressures aren’t going away anytime soon.

Companies, industries and countries are struggling to create effective risk plans for world events that throw their supply chains into turmoil. Not a surprise given a growing number of experts are repeatedly warning about a coming “era of pandemics”.

What is ironic is that this general chaos was triggered because the line between humans and exotic animals has long been breached for trade purposes. The irony comes from the fact that for decades no investment has been made in ensuring the legal wildlife trade supply chain is transparent and well managed. Ignoring the risks this trade posed, to provide the exotic fashion accessories, food, décor, pets and more that cashed up consumers wanted, has brought world trade to a standstill.

The root cause of the pandemic gets minimal attention, even though the WHO now says it has killed 15 million people and also over 10 million children have lost a parent or caregiver, creating an orphanhood crisis unprecedented in modern history.

Thankfully some scientists are taking notice, with one report published in recent months heavily criticising the approaches by global bodies and governments that focus only on preventing the spread of new viruses once they have infected humans, rather than also tackling the root causes. “That premise is one of the greatest pieces of folly of modern times,” said Prof Aaron Bernstein, of the Center for Climate, Health and the Global Environment at Harvard University, who led the new assessment. The report details three key actions to minimise the risk of future pandemics: global surveillance of viruses in wildlife, better control of trade in wildlife, and stopping the razing of forests.

For consumers, trapped in their homes, online purchasing ‘saved the day’, or so they thought. But instead, the risks associated with not investing in the tracking and traceability of the trade in endangered and exotic species has ongoing repercussions with no end in sight. Lockdowns, raw material shortages, transport bottlenecks, sanctions, microchips shortages and many other ‘small’ problems are giving rise to serious disruptions and ongoing supply problems.

Port congestion, such as the one in Shanghai, China’s second largest port, will have downstream effects for many months. Expect longer delivery times and more volatile stock markets.

For years Amazon seemed invincible, an e-commerce behemoth. But Amazon is also vulnerable, its stock plunged 14% on April 29, its largest one-day drop since July 2006; during April, Amazon stock tumbled 24%. Jeff Bezos saw his personal wealth slashed by US$20 Billion, dropping him to No. 3 among the world’s richest.

So here is a thought for the Bezos Earth Fund, invest the US$30 Million needed to complete the global roll out of the CITES electronic permit system, to more effectively manage the legal trade in endangered species.

After all the Bezos Earth Fund claims that “We will target transformational system change.”  and modernising the CITES trade system fits this stated mission and is decades overdue. Investing the US$30 Million now Jeff, may personally save you another US$20 Billion down the track! The Bezos Earth Fund also claims it “will move quickly to seize high-impact opportunities” and “will support environmental justice groups and programs to build resilience [because] only a just transition can succeed.” Funding the urgent global roll out of the CITES electronic permit system aligns with all these claims. Currently there is no environmental justice in the legal trade of endangered and exotic species, because sustainability without the corresponding supply chain transparency is just an ideology and not a strategy.

The legal trade in endangered and exotic species goes unquestioned and is even clinically sidestepped by the premier conservation organizations. The global pandemic has shown that this trade is a risky business. If it is to stay, then the risks must be addressed.

Most companies only have a moderately competent risk plan for tier one suppliers, for examples the tanneries that process exotic skins for final manufacturing. Companies rarely go beyond the first and second tiers and map full supply chains, right down to the raw materials end. All indications are that the scale of the current and future disruptions to trade can be much more costly than a deep look into a supply chain.

While supply chain mapping will take years, high risk industries, such as the legal trade in endangered and exotic species, must be prioritised. This means that CITES needs to provide data we can trust. By modernising CITES we get an “early warning system” for future pandemics and also disruptions to trade, together with a clearer picture of what genuinely constitutes a sustainable offtake.

Back to those experts whose warning that inaction on dealing with the root causes of pandemics has left the world playing an “ill-fated game of Russian roulette with pathogens” and “protecting nature is vital to escape an era of pandemics.  Bernstein said. “If Covid-19 taught us anything, it is that we absolutely cannot rely on post-spillover strategies alone to protect us. Spending only five cents on the dollar can help prevent the next tsunami of lives lost to pandemics by stopping the wave from ever emerging, instead of paying trillions to pick up the pieces.”

Nature Needs More is in total agreement with the fact that we must tackle the root cause (trade and deforestation) not just work on dealing with the symptoms (human health). All industries need to create supply chains that are transparent and resilient, bit let’s start with the riskiest.

If you head to today you will find a full array of products made from endangered and exotic species for sale, many of which are listed under CITES for trade restrictions. Amazon and Jeff Bezos would be well advised to change their supply chain model and there is particular urgency to make the wildlife trade fully transparent and traceable from end-to-end. It is well worth the US$30 Million investment in to modernising CITES Jeff, it could save you another US$20 Billion down the track; not a bad ROI!