Recent geopolitical events, including wars, civil unrest, and extreme weather conditions, are significantly disrupting supply chains, particularly for European businesses. A report by A.P. Møller-Mærsk highlights that one in three companies struggles to secure necessary materials due to these challenges. Geopolitical instability is identified as the biggest threat, with 80% of firms expressing concerns about its impact.
Photo: Dreamstime.
'Since the turn of the decade in 2020, the world has been far from a simple place for businesses across Europe and beyond to navigate. The unprecedented global impact of the Covid-19 pandemic and its resulting policies was one thing, but add ongoing geopolitical conflicts, extreme weather issues, key transport route blockages and more – and you get one significant melting pot of supply chain challenges,' says the report.
The report indicates that 75% of companies have faced delays in their supply chains, with half reporting that these disruptions have been costlier than expected. Around 20% of businesses experienced delayed shipments more than 20 times over the past year.
'Over 1 in 2 businesses are considering new sourcing locations in the wake of disruption, and almost 1 in 3 of them are located close to or within European shores,' it reads.
In response, about half of European companies are considering relocating their supply sources, with Turkey emerging as a popular alternative due to its proximity and skilled workforce. Poland is also mentioned as a viable option.
Companies are increasingly monitoring their supply chains in real-time to react swiftly to changes and are exploring technologies for better forecasting. This turmoil offers an opportunity for businesses to restructure and create more resilient supply chains. Mærsk emphasises the need for flexibility and preparedness in an unpredictable landscape, urging companies to diversify their sourcing strategies to ensure sustainability and efficiency in their operations.
To access the full report, click here.