The state of supply chains in 2020 and what’s ahead in 2021

Jim Yarbrough, Global Intelligence Program Manager, BSI

Throughout 2020, global supply chains faced one of the largest threats to security, continuity, and resiliency with the COVID-19 pandemic which continues to cause disruptions, threaten supply chains, and have residual impacts. Many of the concerns BSI monitored this year, including human trafficking, political protests, natural disasters, cargo crime, and terrorism, set the tone for continued risk to supply chains as we head into 2021.

Several emerging challenges and persistent risks are likely to play a large role in the upcoming year. The impacts of COVID-19 continue to alter broader supply chain threats, climate change and natural disasters disrupting business operations, and regulatory changes focusing on rooting out violations, create an environment where businesses need to prepare to ensure a stable global business in the face of future forms of instability.

The COVID-19 pandemic created atypical challenges for 2020 and added new and complicated threats to pre-existing supply chain risks. With lockdowns, diminished supplies, and transportation restrictions, drug introduction and smuggling trends shifted, and cargo theft trends changed to focus on newly high-valued targets and locations.

While migration was on a downturn during the first half of the year, new stowaway smuggling routes and labor risks were established later in the year. As economic downturns and lockdowns remain ongoing globally, it is predicted that there will be continued migration throughout the Americas and Europe, leaving migrants vulnerable to human rights violations and harsh working conditions.

Criminals shifting drug smuggling trends in the Americas, specifically, will create challenges for operators in the area impacting port security and other drug introduction points to cargo across the globe. Additionally, as business operations slowed during COVID-19, cargo criminals shifted operations to target high-value supplies, including medical equipment and warehouse and facility locations for theft. Criminals will likely continue to target high-value commodities, and warehouses and facilities, in 2021, especially if lockdowns continue to occur globally.

Disruptive natural disasters continue to significantly impact business operations, worker safety, and transportation continuity. In the western United States, close to 3 million more acres of forest were burned over the previous year due to wildfires in California alone, causing significant business operations and environmental impacts. Similarly, the Australian continent experienced severe wildfire outbreaks. Additionally, flooding presented a constant threat in Southeast Asia throughout the year. With persistent dry conditions in the western United States and Australia and prolonged monsoon seasons in Southeast Asia, not to mention a record number of named storms in the Atlantic and Gulf of Mexico, there will likely be continued disruptive natural disasters complicating business operations in 2021.

Additionally, regulatory changes focused on eradicating threats to sustainability, human rights, smuggling, and other issues from business operations will play a large role in 2021. Due to trending issues in human rights violations across the globe, with forced and child labor contributing to a large part of the workforce, regulatory bodies are focusing efforts on imposing sanctions and other standards to decrease the presence of these human rights violation.

In the year ahead, issues of sustainability in supply chains and the sustainable sourcing materials will play an increased role in how companies operate as governments and regulatory bodies crack down on companies, creating an environment where vetting suppliers and understanding each level of the supply chain is crucial for a resilient organization. As industry leaders contend with these looming challenges in the upcoming year, leveraging BSI’s supplier management and risk intelligence platform, SCREEN, will allow them to understand and proactively manage risk.