Wild weather events will be the top logistics disruptor for supply chains in 2024, according to a forecast from supply chain risk analysis firm Everstream Analytics.
Weather is already a top logistics disruptor, and that impact will only increase as the “Era of Extremes” persists into 2024, the firm said. Today, a billion-dollar event occurs every three weeks, and those same hurricanes, winter storms, wildfires, and floods are likely to cause havoc in supply chains in 2024.
The prediction comes from California-based Everstream’s “2024 Supply Chain Risk Report,” which is based on its database of known and predicted events, and informed by human intelligence and AI technology.
Following the challenge of extreme weather, the report also named five other looming threats:
- Environment Regulations. Supply chain managers will face more administrative burdens, operational costs, research and development challenges, raised prices, and other disruptions as they shift production practices to meet compliance goals.
- Trade wards between the US and China. The coming year will highlight a gap between increasing trade war restrictions and shifting technology investments. Since it will take up to three years for new semiconductor plants to come online, many companies will face sourcing problems for high-tech components previously available from Chinese suppliers.
- Rising geopolitical instability threatens supply chains more than ever, and Taiwan will be the primary conflict hot spot in 2024. Disruption in the Taiwan Strait would impact the estimated half of all the world’s container ships that pass through it.
- Commodity shortages will come to a head this year due to the culmination of many factors, including high input prices, farm profitability concerns, increasing protectionism, and extreme weather events. Further disruption with limited warning is expected and top commodity-producing countries will likely respond to smaller harvests by proposing or expanding protectionist measures for commodity exports.
- Cybercrime: A carryover from 2023’s risk report, cyberattacks on supply chains rose sharply during 2023—202% year-over-year—with attacks on companies, sub-tier suppliers, and logistics providers. This is the highest level in the last five years, surpassing the previous record during the COVID-19 pandemic in 2020, and it’s not slowing down. Everstream predicts ransomware and data breaches will be an ongoing risk to supply chains in 2024.
