Supply Chain Risks to look out for in 2024

There’s some serious supply chain disruptions on the horizon that have not fully reared their heads but when they do can pose serious challenges for the industry. Today, in this blog post, we will look at what these are and how we can rise up to these challenges and do the best to keep the supply chain up and running…

In 2023, we saw a lot of instability in the supply chain due to factors like extreme weather events, wars, commodity shortages, protectionism, global port congestions and lack of sustainability with the resurgence of COVID-19 being the one thing that the industry just simply cannot seem to shake.?

Let’s look at these factors in detail:

Geopolitical Instability - According to the UN, there has been a significant rise in conflicts and wars across the world. In fact, 2023 saw the highest number of violent conflicts since the end of World War 2. Tensions and Regulatory Frictions between China and Taiwan has significantly affected supply chains because the Taiwan Strait is where half of the world’s container ships pass through.?

Protectionism - With new protectionist measures on commodity exports and increased controls and sanctions, supply chain problems continue to skyrocket. Currently, there are many new measures being devised that are believed to come in power in 2024 and that would be another major blow for the supply chain industry. Economic experts continue to push the narrative that protectionism does not achieve the goals it goes out to achieve but there’s a section of the society which believes that to be false.?

Environmental Risks - According to Everstream Analytics, DHL’s analytics partner, extreme weather poses a 100 % risk score. Hurricanes, droughts, wildfire and other natural calamities can cause delays, cancellations and increased costs to the supply chain industry. The climate crisis is leading the Governments to enact various regulations in order to curb emissions along global supply chains, which can impact operations and require adjustments.

Operational Risks - From Labour Shortages to supply chain blockage like that of the Suez Canal in 2021, can not only slow down production but prevent distribution of goods. This can have a far -fetched impact like unhappy customers and so on. It’s important to bring in sustainability in order to deal with these high impact situations.

So at the end of the day, to manage these risks, supply chain leaders are advised to adopt proactive approaches, leverage digital tools and technologies, and stay informed about potential risks and changes in the supply chain landscape in order to ensure the smooth operation of supply chains, minimize disruptions, and maintain efficiency and reliability.