DHL Resilience 360 – trade wars, extreme weather and cyber crime

The top three supply chain risks in 2018 were trade wars, extreme weather and cyber crime, according to the latest DHL Resilience 360 risk report.

Disputes between the US, China and other countries was problematic. “The still-open question of the UK’s withdrawal from the EU is also contributing to uncertainty, as companies fear border congestions and delays at ports in the event of a disorderly departure.

“In the realm of cyber security, a rising number of incidents involving supply chain and transport infrastructure showed how actors are intent on obtaining trade secrets, engaging in blackmail, or causing economic disruption.

“Lastly, climate change presented a myriad of severe weather-related disruptions in 2018, which was the 4th warmest year on record. Wildfires, droughts, low water levels and melting ice had the most significant impacts on supply chains.”

Germany and the UK took the top spots in terms of the most incidents. Cargo theft, fires and explosions as well as train accidents took up more than 60% of the incidents. Europe however had a more even distribution of events than others.

The DHL report suggested that there could be raw materials shortages, recalls, safety scares and tougher environmental regulations could have an impact into 2019.

“First, rising demand for raw materials, coupled with a fragile supply caused by political instability and supplier shutdowns, may result in raw material shortages for crucial materials such as lithium, cobalt, and adiponitrile. Second, recalls and safety scares may increase, as wider public awareness of quality issues and stricter enforcement by regulators in highly regulated sectors such as pharmaceuticals and medical devices subject products to higher scrutiny.

“Lastly, anti-pollution measures may be expanded in 2019 to a broader range of industries across Asia. The US Environmental Protection Agency is also expected to announce new requirements. As a result, tougher environmental regulations will increase costs for businesses in a number of industries.”

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