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New Report Details Primary Causes of Supply Chain Disruptions

Business improvement and standards company BSI has unveiled its annual Supply Chain Risk Insights 2021 Report that identifies the trends and associated risks likely to impact global supply chains in the year ahead. The report is powered by the global data in BSI’s proprietary web-based, comprehensive intelligence system. Using this insight, BSI predicts the following trends will likely dominate the global supply chain throughout the year ahead:

  • Ongoing challenges from COVID-19 creates new threats for organizations in the coming months
  • Economic hardship increases the risk of labor exploitation, human rights violations, and stowaway smuggling
  • Drug smuggling trends remain consistent, however, means and methods will continue to change and evolve due to COVID-19
  • Food fraud and safety will continue to challenge supply chain resilience
  • Regulatory changes will test organizational adaptability

“COVID-19 will certainly have latent effects on organizational resilience throughout 2021.”

The Supply Chain Risk Insights 2021 Report sheds light on these new threats and the progress made in addressing ongoing challenges, while offering guidance on best practices that can be used to counter and manage risk.

“COVID-19 will certainly have latent effects on organizational resilience throughout 2021, directly and indirectly shifting the way organizations do business,” said Jim Yarbrough, Global Intelligence Program Manager at BSI. “However, several other challenges, including increased regulation of supply chains and forced labor, are poised to challenge organizational resilience and business continuity as the world continues to grapple with the lingering impacts of the pandemic.”

Ongoing Challenges From COVID-19 Create New Threats for Organizations in the Coming Months
Many of the COVID-19 related challenges that organizations faced in 2020 forced them to adjust in novel ways to maintain their supply chain continuity, integrity, and overall resilience. Yet, at the same time, the spread of the virus seemed to merely exacerbate historical trends and known risks such as cargo crime, man-made disruptions, and political protests, which all remain as risks to supply chain resilience in 2021.

BSI intelligence noted an increase in thefts from facilities in Africa and Europe and an overall increase in stolen medical supplies last year. However, despite these changes noted in the BSI incident data, some trends remained the same, such as in Latin America, which continued to experience a high number of hijackings, and the United States and Canada saw consistent trends in the targeting of trucks parked in vulnerable locations.

As the spread and impact of COVID-19 reduces, cargo theft trends are expected to return to pre-pandemic levels, with certain types of goods losing value again, such as personal protective equipment (PPE), and the resumption in trade leading to more movement of vehicles, restoring thieves’ opportunities to again strike this transportation mode.

Economic Hardship Increases the Risk of Labor Exploitation, Human Rights Violations, and Stowaway Smuggling
As COVID-19 pushed countries into lockdown, it also put the world’s most vulnerable communities at greater risk of labor exploitation and human rights violations, creating new migration trends as individuals attempted to avoid hardships and seek new economic opportunities. School closures combined with ongoing reduced family incomes suggest a greater potential for child labor in the year ahead as all family members are forced to work as they try to make a living.

In addition, border closures and other pandemic impacts occurring at the start of 2020 led to a decrease in migration; however, new stowaway smuggling routes and labor risks developed later in the year as controls declined, but economic opportunity continued to be sparse, leaving migrants outside their countries susceptible to labor exploitation. While mass migration on its own does not pose an overt threat to supply chains, it is the tendency for some individuals, often facilitated by organized crime, to exploit gaps in security that are the real risk to individuals and organizations and will likely be at the forefront of supply chain risks in the year ahead.

Read more and download a copy of BSI’s Supply Chain Risk Insights Report here.

Continuity Insights

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