With North Korea all over the news this week after its nuclear test and missle launches, as well as with South Korea's entry as a "full participant" into the U.S. Proliferation Security Initiative (PSI), it now seems like the appropriate time to continue my discussion here on maritime security and trade in the Asia-Pacific.
In this post, I would like to summarize the types of disruptions that concern supply chain managers in terms of the maritime transit of goods and within the current Asia-Pacific environment. Without citing anything specifically, and in no particular order, from my own experience I believe disruptions could include:
- Adverse weather events and natural disasters
- SARS-type pandemics
- Perpetration of theft / fraud
- Organized terrorist attacks and / or hijackings
- Regional, armed conflicts
All of the above could significantly affect ports, shipping and the people involved in a particular company's supply chain, thus causing major disruptions in the delivery of goods and services. As inferred in my previous post, the dramatically increased levels of trade between countries of the Asia-Pacific has served to reduce tensions and concerns overall on its seas and in its ports. However, as we have seen with North Korea, there are specific areas that will be identified as potential flashpoints that could quickly begin disrupting the links of Asia-Pacific trade.
Below is a diagram that points out where these flashpoints are located:
The East Sea and Yellow Sea are now going to be under close watch due to the recent actions of North Korea and because South Korea has now become a full participant in the PSI. Tensions still exist between Japan and South Korea over the Dok-do islands in the East Sea, between Japan and Russia north of Hokkaido, and between Japan and China over oil exploration and development in the Yellow Sea, but these mostly have taken a back seat to stronger economic ties and political reconciliation.
The South China Sea and Taiwan Straits are also areas of territorial tensions as witnessed by the occasional flare up between Chinese and U.S. vessels and military exercises in Taiwan and China in relation to a possible armed conflict. Fortunately, China-Taiwan relations have been warming significantly in recent months and territorial disputes in the South China Sea have mostly been made through international bodies.
The Strait of Malacca differs in that it doesn't involve territorial issues; rather it is a hotbed of piracy, fraud, theft and general crimes against the concentrated flows of trade and commerce in the area. As seen in the below graph from the "Regional Security Outlook" report made available by the Council for Security Cooperation in the Asia Pacific (CSCAP), attacks are down over the past few years as trade intensity has picked up along with new security measures:
With an increase in attacks in 2008, it will remain important for government-led security and private-sector security remain focused and innovative when dealing with these incidents. But there is no doubt that as the value of trade goes up the will to protect and secure those trade flows will also increase.