Top supply chain risks in 2025
Supply Chain Risk #6: Environmental, Social and Governance (ESG)According to Xeneta, emissions and their impact on the environment fall under tight scrutiny, and as such, represent another critical supply chain risk area. Yet despite a growing focus on sustainability and corporate drives for greater ESG performance, emissions continue to rise.
It elaborates:
In the first 10 months of 2024, total emissions from container shipping were up 13.8% globally compared to 2023 and were on track to set a new all-time record for the full year. In that time, 199.7 million tons of CO2 were emitted by container ships – 9.5% higher than in the first 10 months of 2021 (the current highest full year on record).
Rising emissions make the International Maritime Organization’s (IMO) target of net zero by or around 2050 seem extremely ambitious. But progress towards net zero goals continues, with new laws and regulations emerging which will put freight carriers under even greater scrutiny.
While policy gaps are delaying the scaling of green solutions, we expect to see ESG policies influencing three main areas:
* Supplier and carrier choices
* Ethical sourcing and procurement practices (Unilever is an industry leader for this)
* Enhanced supply chain transparency and real-time data—for reporting and informed decision-making
Steps you can take
Xeneta’s Chief Analyst Peter Sand believes that data will be key to supporting the industry on the path to net zero and further regulation may be required to achieve the lofty emissions targets—as well as robust data reporting and analysis.
He said: “We talk about the introduction of EU-ETS emissions regulations in Europe, but perhaps some sort of global emissions trading scheme is required—or any other way of putting a price tag on carbon emissions.”
Sand also speaks to Xeneta’s Carbon Emissions Index (CEI) in partnership with Marine Benchmark, which provides insight on the carbon intensity of ocean freight shipping lines and carriers across 48 global trades.
“From an actionable point of view, it allows shippers to choose a carrier to transport their cargo with a proven track record for having a low carbon footprint. Maritime shipping also has an energy efficiency index to identify and action to take against the poorest performers from an emissions point of view. If you are a bad carbon emitter then you need to do something about it, whether that is slow down, de-rate the engine, or scrap the ship.”
Supply Chain Risk #7: Procurement Transformation
While many areas of the modern business have completely transformed over the past two decades, procurement functions have (generally) seen far less transformation. However, as more and more organisations recognise the strategic value that procurement can deliver – from ensuring business continuity, to supporting ESG and sustainability efforts – that’s set to change.
In a recent Xeneta survey, we learned that 6 in 10 businesses have already changed their approach to ocean freight tendering in 2025. The key driver behind this is a frustration around having allocation removed or blank sailings, despite
having a contract in place.
For most, the traditional tendering approaches are simply no longer fit for purpose. Amidst all the volatility caused by the myriad disruptive forces impacting the global freight landscape,
it no longer makes sense to agree 12-month rates for every trade and every volume – especially if the LSP is likely to play the spot market anyway.
That’s just one example of a wider shift happening in procurement. Disruption is no longer the exception – it’s the rule. It’s a complex new reality for procurement teams, but one they are ready to adapt to, and build new processes, workflows and capabilities to accommodate. However, if those changes aren’t managed or executed well, they can quickly transform from an opportunity into another supply chain risk.
Steps you can take
As procurement functions evolve to better manage continuous disruption, they need three key things to succeed:
* Reliable, timely insights and intelligence which enable proactive decision-making to break free from a continuous stream of purely reactive actions.
* Operations which are aligned with wider business objectives, to ensure all supply chain executives understand the relationship between freight rates and factors such as schedules, capacity and carrier strategies.
* Metrics and autonomy to pursue outcomes other than final dollar savings and prioritise other important goals such as business continuity, sustainability, or the avoidance of schedule disruption.
Supply Chain Risk #8: Cyber-Attacks
Cyber-attacks are a predominant risk in modern supply chain management. While not malicious in its nature, 2024’s Crowdstrike outage showed us the incredibly disruptive impact cyber outages can have. It cost Fortune 500 companies alone more than $5 billion in direct losses, which should be enough to put outage-causing cyber-attacks high on any supply chain team’s risk agenda for 2025.
What’s more concerning is that only 13% of businesses review the cybersecurity risks posed by their immediate suppliers, and only 7% review their wider supply chain (2022 Security Breaches Survey). For cybercriminals, the complexity of today’s supply chains makes them an enticing target. Comprised of multiple vendors, manufacturers and other third-party organisations (often with access to centralised data and systems) there’s potential for a real domino effect of destruction when it comes to a data breach or cyberattack.
Steps you can take
Choose supply chain systems vendors with a proven record of maintaining stringent cybersecurity protocols. Limit personnel access to your systems to those necessary for shipment processing, and maintain the strong physical security of your facilities. Penetration testing, continuous monitoring and modern IT skillsets can also reduce cyber-attack risk.
Supply Chain Risk #9:Data Integrity and Quality
Data integrity refers to the quality and strength of data for use in supply chain management. According to Gartner, poor data quality costs organisations at least $12.9 million a year on average. For example, the wrong freight procurement data could lead to misinformed strategies, costing your organisation millions in delays, direct costs, and reputational damage.
With AI rising up many organisations’ agendas, high quality data is more important than ever. When using AI and Machine Learning models, what you get out is only as good as what you put in. So, if you push ahead with AI initiatives without first addressing underlying data integrity and quality issues, at best you’ll fail to realise your technology’s full potential, and at worst you’ll cause significant negative outcomes for your business.
Steps you can take
Validate data for accuracy and timeliness. Bad or outdated data is worse than having no data at all, and systems that leverage real-time data monitoring can be crucial in increasing data integrity and quality. Shippers who collaborate with data can increase data integrity and decrease ocean freight spending. You may also want to consider using blockchain-based technologies to eliminate erroneous changes in data retroactively.
Supply Chain Risk #10: Ongoing talent gaps
Together, The Great Resignation of 2021 and the following recession-like tailwinds have caused a skills gap in the procurement function and supply chain industry. And while the global talent shortage fell by around 2% in 2024, this gap remains large, and a significant operational challenge for supply chain teams.
In response, we’re seeing the rise of “T-shaped” procurement teams. These refer to individuals who possess both a deep expertise in one area, and a broad set of skills or knowledge in related areas. T-shaped teams suit the volatile nature of the modern supply chain by reducing dependencies between teams, resulting in faster decision-making and aligned priorities. They also help foster team ownership, and reduce handoffs between knowledge silos, avoiding information loss.
Steps you can take
DHL Supply Chain has indicated that procurement skills shortage falls to four main issues: demographics, a need for modern skills, cost cutting measures, and a lack of training programs.
With this in mind, recognise where you have skills gaps (presently or forecasted) and invest in education, mentorship, and training. This will foster a culture of continuous learning, as well as stronger employee engagement and retention. Your team’s improved knowledge will also positively circle back into the overall success of your supply chain.
Where your team is already at capacity, leverage procurement technology and automation in the shape of e-sourcing tools, spend analysis software and other procurement technologies. This will free up your team for more value-adding activities and improve the efficiency and effectiveness in routine takes.
Proactive risk management is key to ocean freight success
In an era of continuous disruption, being reactive to risks is no longer enough to ensure the success of your business and the stability and efficiency of your supply chain and freight operations.
To mitigate these risks effectively, and transform some of them into powerful value creation opportunities, you need to enable well-informed, proactive decision-making — and that demands full market transparency and predictability.
Discover solutions as dynamic as your procurement challenges and start modernising the way you buy and sell freight today.
Source: Exim News Service: Oslo, April 1