In an era marked by unprecedented global challenges, the resilience of supply chains has become paramount for the sustained success of businesses. As disruptions become more commonplace, the need for comprehensive risk management and resilient logistics practices has never been more critical.
The landscape of risk in supply chain management is evolving rapidly. A study by CargoNet underscores the escalating challenges, revealing a 15% increase in supply chain risk events in the past year. Cargo theft alone surged by 20%, resulting in a staggering $223 million in losses for the US and Canada. These statistics emphasize the necessity for robust risk management strategies.
Amidst these challenges, marine insurance emerges as a crucial safeguard. As marine transportation remains integral to global trade, especially for valuable commodities like oil, gas, and raw materials, marine cargo insurance plays a pivotal role. It acts as a shield, protecting the economic interests of stakeholders and fostering the growth of this essential segment.
EIMC, standing at the forefront of risk management, offers insights and solutions that transcend the conventional. An illustrative example is our recent Point of View (POV) on lithium-ion batteries, underscoring our commitment to unravel hidden risks and champion regulatory compliance. As the world embraces green technologies, incorporating lithium-ion battery components into various products has become commonplace. Our focus on effective risk mitigation and management becomes even more crucial in a landscape where the supply chain is the lifeline of businesses. We weigh in on safeguarding goods throughout the supply chain, from transportation to storage and everything in between.
Insights for 2024
As companies prepare to face disruptions in 2024, adapting contingency plans, reconsidering routes, utilizing forecasting technology, and partnering with integrated logistics providers are key strategies. Threading resilience through the supply chain acts as a shield against external disruptions, enabling companies to create flexible supply chains that align with their needs. As we look into 2024, here are key insights and strategies to navigate the challenges that lie ahead:
1. Finding Multiple Routes to Market:
In times of disruption, the most straightforward route to the market can be fraught with hurdles. Collaborating with an integrated logistics partner becomes invaluable, offering the flexibility to find multiple routes and adjust supply chain moves, as needed. This approach circumvents bottlenecks during disruptions, ensuring the ability to meet business demands consistently and promptly.
2. Creating Contingency Plans:
Disruptions can be categorized into unexpected and expected events. While unexpected events like political unrest are hard to plan for, expected disruptions such as harsh weather conditions can often be forecasted. Establishing stronger contingency plans in partnership with logistics providers helps alleviate disruption strains and ensures resilience in supply chains, no matter what the weather or conditions are.
3. Utilizing Options Closer to Market:
The ripple effects from disruptions can be far-reaching. The COVID-19 pandemic highlighted the need for flexible supply chains, with a push towards nearshoring instead of far- and off-shoring. Bringing production back to the same region as sales can often mitigate delays and disruptions. Regionalized trade business models are expected to grow in the coming year.
4. Implementing Technological Advances:
The last decade witnessed a surge in consumer expectations for delivery and visibility in goods movement. Technological advances have played a pivotal role in optimizing supply chains. In 2024, businesses are expected to collaborate with partners having substantial advances in visibility, tracking, and predictive programs to navigate bottlenecking effectively.
5. Collaborating Where it Matters:
The post-pandemic period brings new and unexpected needs for industries. Collaborative partnerships with logistics service partners with expertise in digitizing customs and managing duties and risk management specialists like EIMC to identify vulnerabilities before a claims event takes place becomes a strategic advantage, boosting business and bringing ease during supply chain difficulties.
An integral part of your strategic preparedness should be a bespoke risk assessment process. In the case of EIMC, our reports identify short-term, medium-term, and longer-term vulnerabilities. This type of assessment should include operational and organizational risk priorities and recommendations, including various aspects such as supply chain structure, supplier evaluation, contract vulnerabilities and risk mitigation, transport and logistics, warehousing and distribution center performance monitoring, compliance, emergency response/disaster planning, and more. You should have full visibility into your goods while in the supply chain, from end-to-end, in transit, and at rest.
The industry is facing significant changes in the mid-2020s. Geopolitical conflicts, regionalization, and inflation are expected to shape 2024. Disruptions are not fading, but the right logistics partner can help businesses navigate and overcome these challenges, ensuring a resilient and adaptive supply chain. In this ever-changing global landscape, you need a steadfast partner to mitigate risks, fortify your supply chain’s integrity, and safeguard your growth.