2024 Supply Chain Threats: From Extreme Weather to Cyber Crime
2024 Supply Chain Threats: From Extreme Weather to Cyber Crime
According to a supply chain risk analysis report prepared by Everstream Analytics for 2024, extreme weather events are expected to cause the most significant logistics disruptions in supply chains. In what has been termed the "Age of Extremes," billion-dollar events are anticipated to occur every three weeks. This indicates that hurricanes, winter storms, forest fires, and floods will continue to negatively impact supply chains throughout 2024.
The report identifies five additional threats beyond extreme weather events:
Environmental Regulations: Supply chain managers will face increased administrative burden, operational costs, research and development challenges, rising prices, and other disruptions as they adapt production practices to meet compliance targets.
U.S.-China Trade Wars: The new year will highlight the widening gap between escalating trade war restrictions and shifting technology investments. Since new semiconductor factories will take three years to come online, many companies will face supply challenges for high-tech components previously sourced from Chinese suppliers.
Rising Geopolitical Instability: In 2024, the possibility of disruption in the Taiwan Strait—a region through which half of all container ships in the world pass—poses an unprecedented threat to supply chains globally.
Commodity Shortages: Multiple factors, including high input prices, farm profitability concerns, rising protectionism, and extreme weather events, will converge to reach a peak this year. Additional unexpected disruptions are likely, and major commodity-producing nations will be inclined to propose or expand protectionist measures for commodity exports in the face of smaller harvests.
Cyber Crime: In 2023, cyber attacks on supply chains increased by 202%, with attacks targeting companies, downstream suppliers, and logistics providers. Everstream predicts that ransomware and data breaches will remain an ongoing risk for supply chains in 2024.
Key Takeaways:
Extreme weather events remain the primary source of logistics disruption for supply chains.
Environmental regulations will create increasing burden and costs for businesses.
U.S.-China trade wars will create challenges in sourcing technological components.
Geopolitical instability will concentrate particularly on the Taiwan Strait.
Commodity shortages will strengthen protectionist tendencies.
Cyber crimes will escalate the threat level to supply chains.