In January, Everstream Analytics, a U.S.-based global supply chain analysis firm, released its 2025 Annual Risk Report. The report identifies and analyzes five key risks likely to impact corporate supply chains in 2025:
Climate Change Impact
Ocean temperatures have reached record highs, increasing atmospheric water vapor and leading to more frequent flooding. In 2024, floods accounted for 70% of all weather-related disasters.
The report recommends assessing overall flood risks in business and partner regions, including infrastructure, evacuation routes, and waterways. Flooding is just one aspect of extreme weather events that have increased over recent decades, emphasizing the importance of preparing for worst-case scenarios.
Rising Geopolitical Tensions
International political and economic relations are destabilizing due to ongoing conflicts in the Middle East and Ukraine, ship attacks in the Red Sea, and potential tariff increases by a new U.S. administration.
Early detection of political developments provides valuable lead time for supply chain managers. The report suggests building resources and systems to quickly evaluate alternatives, assuming existing plans will change. Faster responses can save time and money.
Cybersecurity Vulnerabilities
The adoption of AI and IoT has increased cyber attack risks, especially through sub-tier suppliers. Electronics and manufacturing sectors are most affected.
The report emphasizes prioritizing robust security measures to protect sensitive data and operations. It suggests using AI and automated solutions to assess growing risks across industries, regions, and operation types, enabling companies to identify and manage specific sub-tier risks in collaboration with first-tier suppliers.
Rare Metals and Minerals Supply Restrictions
Export regulations are tightening, particularly from China, and trade restrictions are increasing due to geopolitical tensions. Companies are taking measures such as direct purchasing contracts with mines.
The report advises monitoring commodity and material information to anticipate unexpected disruptions. Understanding raw materials used at sub-tier levels allows for quick impact assessment and resource allocation to avoid production stoppages.
Intensified Crackdown on Forced Labor
Many countries are introducing new regulations against forced labor, significantly impacting the agriculture and food sectors. Companies are required to eliminate suppliers violating human rights.
The report recommends continuous monitoring of sub-tier labor risk issues rather than waiting for goods to be detained at customs.
While some risks can be mitigated through advance planning, many are not so simple. Floods will occur regardless of preparation, depending on atmospheric conditions. However, early notification and swift action can save inventory and lives. In all cases, companies are expected to apply a combination of planning, close monitoring, and mitigation strategies to overcome challenges.