Top supply chain risks in 2025 that need monitoring: Analysis
According to A.P. Moller-Maersk, more than 76% of European shippers saw supply chain disruption throughout 2024. Almost a quarter counted more than 20 disruptive incidents, and 1 in 3 subsequently had difficulty securing materials necessary for production.
With conditions set to be very similar in 2025, organisations must now find ways of reducing disruption in ocean freight, embracing risk (not just mitigating), and successfully building an anti-fragile supply chain, says an analysis by Eloisa Tovee of Xeneta.
It elaborates:
Change is inevitable in modern supply chain management. As 2024 showed us, risks rapidly evolve and become more prevalent with time. Pure risk avoidance is no longer possible. So, proactive, agile, and adaptive risk management is essential to your success.
Poor supply chain visibility and an insufficient understanding of risk will only create additional risks, so this is where your focus should be. Without that visibility, it’s all too easy to increase freight spend, jeopardize relationships with suppliers and customers, and miss valuable opportunities as the market moves. Not to mention, you’ll expose yourself to unnecessary and entirely avoidable disruption.
In no particular order, here are the top ten risks your company needs to monitor this year, and some steps you can take to stay ahead of them.
Supply Chain Risk #1: Geopolitics
Widespread geopolitical unrest has thrown us into an era of unprecedented supply chain risk. Between the Russia-Ukraine war, developments in the Red Sea crisis, the growing use of cyber-attacks in international conflict, new tariffs imposed by the new US administration, and shifts towards nationalism and protectionism, there’s a huge amount to keep track of.
Every one of those risk areas is continuously developing, and they all have the potential to impact freight costs, freight availability, schedule reliability and timeliness, production continuity, and international trade. For example, Xeneta data shows that the last time President Trump ramped up tariffs on Chinese imports during the trade war in 2018, average spot rates spiked more than 70% on critical trade from China to the US West Coast.
Steps you can take
With most industries now highly reliant on globalised supply chains, those with the ability to do so may want to consider shifting towards a more regional focus – or in some cases, moving significant volumes to ‘safer’ territories. Onshoring and nearshoring can help you ensure that your access to critical resources isn’t constrained by geopolitical tensions and trade barriers. But it may lead to higher costs – especially in the short term.
One very popular response to geopolitical supply chain risks is to build and maintain a more diverse supplier portfolio. If tensions create issues in one specific region, an organization can then easily switch to a supplier in a less impacted region, at a relatively low level of disruption.
Others may look to index-linked contracts to build additional reliability and robustness into their supply chains. The case for this type of contract has become more compelling since the Red Sea crisis begun, growing in popularity among shippers, freight forwarders and carriers alike.
However you choose to navigate 2025’s rapidly-evolving geopolitical circumstances, you should maintain a stricter level of compliance in your operations, even if governments allow for a less-stringent approach. This will reduce the risk of compliance violations and safeguard your supply chain against the enforcement of new regulations.
Supply Chain Risk #2: Economic Instability
Following a tough 2024 characterized by persistent inflation and elevated geopolitical tensions for much of the world, the overall economic outlook for 2025 remains highly uncertain. According to the World Economic Forum, 56% of leading chief economists expect weaker global economic conditions in 2025, compared to only 17% expecting improvement. Economic instability is often a consequence of geopolitical instability and disproportionately impacts the most vulnerable in society. This in turn leads to social unrest, protest action, and calls for geopolitical change, creating further disruption and supply chain risk. As a result, today’s supply chain teams must be ready for frequent market turbulence.
One key area to watch is air cargo. Due to the temporary removal of US de minimis threshold for Chinese shipments, the average air cargo spot rate from China to the US plummeted nearly 50% from its December peak season high to USD 2.98 per kg in the week ending 9 March 2025, a level back to pre-pandemic. And only two weeks later in the week ending 23 March, it jumped over 20% to USD 3.67 per kg as the market sentiment temporarily recovered.
Steps you can take
As Emily Stausbøll, Senior Analyst at Xeneta notes, “There is no single ‘best solution’ in such a complex market – it is a case of each shipper understanding their own supply chains, assessing the risks, and using data to gain insights and make evidence-based decisions”. While this quote originally focused on ocean freight, the same is true for air freight.
More than anything, developing an agile procurement strategy will allow for quick adjustments, such as shorter contract terms, diversifying transport modes, or dynamic pricing models during economic instability. Other approaches include diversifying your suppliers and strengthening existing supplier relationships, so you are more likely to receive better communication, flexibility, and support during challenging times. If you have the space, you might also consider increasing inventory buffers for critical materials to ease pressure.
Supply Chain Risk #3: AI and emerging technologies
Generative AI will power nearly 25% of all logistics KPIs by 2028 (Gartner). As it stands, one of the most popular AI use cases is contract risk analysis, with half of organizations predicted to be using AI-enabled tools to support their supplier contract negotiations by the year 2027. Additionally, the synergy between AI and IoT is creating a highly efficient operational environment, with AI expected to make supply chains 45% more effective in timely and error-free product delivery (Research and Markets).
Digital twin technology has also emerged as a key driver of supply chain growth. According to McKinsey, the global market for digital twins will grow about 30 to 40 percent annually in the next few years, reaching $125 billion to $150 billion by 2032. Digital twins create a digital model of a physical product, system, or process, including its functionality, features, and behaviour. In supply chains, they’re helping organizations model strategic changes made in response to emerging risks. By enabling teams to validate the impact of those changes, digital twins can help organizations invest in the right areas and make the decisions that deliver the best impact for their business, customers, and global supply chain operations.
Steps you can take
While excitement around AI and its potential for value creation across the supply chain is high, it remains an opportunity that very few organizations are well positioned to make the most of today. It demands new skillsets, highly mature data strategies, and in a lot of cases, high capital investment.
For most teams, the best course of action is to proceed with caution. Build use cases, conduct pilots, and focus on delivering demonstrable ROI from AI in areas of specific relevance to your business. A critical part of this process is ensuring you have mature, unbiased freight data to feed your AI models. Without a strong data foundation, you risk making decisions based on incomplete or misleading insights.
This test and learn approach will help you identify where AI and other emerging technologies have the greatest potential to positively impact your supply chain operations. By taking this approach, you can showcase where appetite for change is high, where new technology can easily integrate with your existing tech stack, where challenges might lie, and ultimately, which pilots are worth scaling out.
Supply Chain Risk #4: The evolving priorities of CFOs
In 2025, Chief Financial Officers (CFOs) are navigating a complex landscape, balancing cost control with strategic investments. A survey by Egon Zehnde, in collaboration with Imperial College Business School, revealed that 72% of Chief Supply Chain Officers identify financial pressures as their primary challenge, followed by evolving customer demands and the need for operational efficiency.
To address these challenges, companies are focusing on reducing expenses in supply chain, manufacturing, and procurement. For instance, a major US-based apparel maker announced plans to achieve $100 million in savings, primarily through supply chain efficiencies (Oracle NetSuite, The CFO Agenda Report, 2025). Simultaneously, businesses are investing in artificial intelligence (AI) and cybersecurity to enhance resilience and operational effectiveness. AI is being leveraged for predictive analytics, inventory management, and logistics optimization, helping companies navigate trade disruptions and maintain agility. This dual approach of cost reduction and technological investment underscores the evolving priorities of CFOs in strengthening supply chains amid ongoing economic uncertainties.
Both are evolving from a tactical to a strategic approach, prioritizing proactive intelligence and decision-making over the reactive strategies of the past. This helps to build resilience, mitigate disruption, and enables businesses to drive positive change on their own terms, instead of waiting for external factors to force their hand.
Steps you can take
With 67% of executives prioritizing supply chain costs (BCG), the pressure is on to forecast smarter and avoid budget surprises. To stay ahead, decision-makers need a complete and data-driven view of the market. Start with global data coverage, including short- and long-term rate trends, schedule reliability, carbon emissions, surcharges, and spend benchmarks. With finance leaders ‘paddling like crazy’ to control costs, real-time rate intelligence helps cut excess spend and free up working capital.
Locking in the right deals can also help stabilize costs, protect working capital, and avoid overpaying upfront. Index-linked contracts offer shippers and LSPs a dynamic way to manage freight costs by attaching contracted rates to a market benchmark. This translates into greater price stability, risk mitigation, and fairer pricing. With tender acceptance ranging from 98% to just 75% over a freight cycle, indexing also improves strategic commitments by reducing friction and building trust in increasingly frequent and complex bidding cycles.
Paying just 10% above market on freight can cost millions in unnecessary COGS. Procurement teams need rate intelligence to negotiate smarter, keeping budgets in check and ensuring supply chain costs don’t erode profitability.
Supply Chain Risk #5: Extreme Weather Events
Extreme weather represents one of the most significant global risks to ocean freight. It was ranked second on the list of risks likely to cause a short-term material crisis on a global scale in the World Economic Forum’s 2025 Global Risk Report. And in the same report, environmental risks (including extreme weather events) made up the entire top four in a list of risks ranked by long-term severity.
In 2024 and early 2025, we’ve seen record-breaking temperatures, major floods in Europe and South Asia, wildfires devastating Europe and North America, and droughts spanning multiple continents.
Any one of those events can have a major impact on the global supply chain landscape and freight markets. Smoke from prolonged wildfires in Canada caused delayed deliveries by up to two days in 2023, while reduced visibility caused shipments in different areas to fall by up to 75%. Droughts in the Panama Canal have triggered slowdowns on major shipping channels and a 2024 flash flooding in Dubai was responsible for submerging an international airport.
Steps you can take
Shippers must evaluate their preferred routes and determine which carriers can increase shipping in anticipation of extreme weather events. This allows for flexibility to scale back operations or shift modes during tumultuous times. It can also be beneficial to balance between local suppliers to reduce transportation risks and global suppliers to diversify geographical risks.
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More than anything, developing an agile procurement strategy will allow for quick adjustments, such as shorter contract terms, diversifying transport modes, or dynamic pricing models during economic instability. Other approaches include diversifying your suppliers and strengthening existing supplier relationships
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For carriers, extreme weather events often trigger a surge in demand for crucial commodities such as home repair supplies and essential goods. At the same time, damage to manufacturing facilities, warehouses, and distribution centers can disrupt production and in turn, supply shortages. You could also face fuel shortages and port closures, resulting in heightened price volatility.
Source: Oslo, March 20