A Renewed Supply Chain Threat From Iceland

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There has been increased seismic activity in the areas surrounding the Bardarbunga volcano. The caution that has been observed since Iceland’s previous newsworthy eruption that virtually stopped European air traffic can be seen in the increase of the alertness level of the aviation warning code. It has now been lifted from yellow to orange, with orange being the second highest level on the scale.

The warnings by the Iceland Meteorological office have recalled memories of the 2010 Eyjafjallajokull eruption that not only caused huge air travel headaches but equally significant supply chain disruptions. The eruption’s ash cloud forced the closure of both North American and European airspace for weeks.

Freight forwarding representative groups as well as those who represent other sectors of the logistics industry have been closely monitoring the situation and have been continually evaluating contingency plans. The various plans that have been developed by these groups include alternative routing, capacity purchase, and multi-modal options. However, none of the plans are expected to be put into practice unless the volcano erupts and the size of the eruption warrants the closure of significant airspace that disrupts air cargo shipments.

The seismic activity in the area started on 16 August and has been a continuing phenomenon. This most recent activity also included the strongest earthquake in the area since 1996 and according to the Iceland Meteorological Agency, “very strong indications of ongoing magma movement.” The office statement continued, “Presently there are no signs of eruption, but it cannot be excluded that the current activity will result in an explosive sub-glacial eruption, leading to an outburst flood and ash emission.”

The massive disruption caused by the 2010 eruption forced shippers to restructure global supply chains as a defense measure to limit their exposure to future airspace closures of similar magnitude. In cooperation, the aviation industry and air cargo in particular has worked to increase resiliency against ash cloud events while remaining to provide service. However, the measures have not been tested and we have yet to see just how effective any contingency plans might be at this point in time.

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