These Are the Top Supply Chain Risks Every Business Should Know About

Supply Chain Risks

One Danish logistics company last year faced a ransomware attack that ended up costing the company between $250 and $300 million. Twenty or thirty years ago these types of supply chain risks didn’t even exist.

In a world with advancing technology and a global economy, you need to consider a whole new set of threats to your business. These risks range from ones you can control and prevent to others that are random and unpredictable.

You aren’t helpless though. The best thing you can do is know the risks and prepare. That way if one affects your supply chain, you are ready.

Let’s get started reviewing the top risks to your supply chain and what you can do about them.

Cyber Crime

The advancement of technology has allowed businesses to optimize and streamline their supply chains. Unfortunately, it also brings the risk of data breaches and IT incidents.

Remember that ransomware attack we mentioned earlier? Well, it was more than just paying money. They had to replace 45,000 computers, 4,000 servers, and 2,500 applications.

It took them ten days to get back up and running. So the question is, how would your supply chain suffer in that kind of attack?

You can protect your business and supply chain by regularly backing up all data, avoiding phishing schemes, and acting quickly to cut off any threats.

Supplier Failings

This is one of the oldest risks in the book. Unfortunately, you can’t tell your suppliers how to run their business.

What you can do though is do your due diligence and only work with reputable and financially stable companies. Then continue to pay attention to the economic trends and competitive industry of the supplier.

This way you can be alerted to any possible problems before they become an issue.

Another protective strategy is to not 100% depend on a single supplier. Sure you get volume discounts, but you risk your entire supply if that one supplier fails.

Spread your demand to two or three suppliers. Now when one fails, you still have an infrastructure in place for at least a reduced supply.

Labor Problems

The entire trucking industry in the United States is in a panic over the severe lack of drivers. Over 70% of all of the freight tonnage coming into the US gets moved by trucks. That’s 10.5 billion tons of freight each year.

Without trucks, it all stands still at the port, and our entire economy shuts down. So while there are 3.5 million truck drivers, that is not enough.

As of last year, the industry was 60,000 drivers short. Industry experts are expecting that need to be closer to 100,000. To make matters worse, if no effective changes are made, that number could triple by 2026.

Natural Disasters

These days most supply chains depend on a network that stretches across the globe. The problem with this is that you now contend with each area’s natural disasters.

Florida and the Caribbean contend with hurricanes. Head to California, and you have earthquakes and wildfires. Then there is the northeast where they face blizzards that shut down entire cities.

In South Africa, they face a debilitating drought. In the Philippines, they contend with typhoons.

So what does this mean for your supply chain? You must have a plan in place for when a natural disaster shuts down a part of your network.

Look at each area and determine an alternate route for transport. Maybe you adjust your inventory during certain seasons to have a backup supply if a natural disaster blocks your delivery.

Take a lesson from Key West; rehearse, respond, and rebuild.


These risks are more than just who will be the next president. Your supply chain faces a threat from terrorism, war, and geopolitical conflict.

How Trade Wars Stop a Supply Chain

The automotive industry is a perfect example of how trade wars can wreak havoc on an international supply chain. A car may be assembled in the US, but the transmission came from Mexico, the touch screen and GPS from South Korea, and the engine from Germany.

Except that the EU decided to raise US tariffs on auto parts. Then South Korea halts trade as a result of threats issued from North Korea. Mexico is booming though thanks to the trade war with China.

So now you have no electronics, super expensive engines, and more transmissions than you know what to do with.

Middle East

Conflicts in the middle east can cause an oil shortage or hikes in the price. These can put a halt to the trucking industry here that is depending on gasoline to keep moving.


We’ve all seen the headlines about the tension between the US and China. While this conflict may not be as deadly as the Middle East, it is putting a stranglehold on trade.


Another country with massive oil reserves, Venezuela’s economy is currently in a dangerous freefall. This implosion can cause a ripple effect that stretches across South America.

Three million people have fled the country, once eradicated diseases are back, poverty and malnutrition are rampant. This is putting an enormous strain on the surrounding countries’ infrastructures and supply chains.

Protect Your Business from Supply Chain Risks

Don’t let this article be a message of doom and gloom for your supply chain. Instead, take these supply chain risks and use them to fortify your system.

Remember, the best thing you can do is identify potential weaknesses and take actions to address them. This will prevent those weaknesses from ever becoming cracks.

Even if they do become a crack in your chain, you already have a plan in place to fix and overcome.

Ready to get your supply chain moving? We can help with our robust suite of solutions, starting with trucking services.

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