Plan for the New Year by learning about the biggest trends set to impact the future of supply chain. Dive into the top supply chain trends of 2024.
While 2023 brought some much-needed stability to the global supply chain, experts are well aware that the next major disruption is just around the corner. In this blog, we take a deep dive into predictions for the New Year, outlining the top megatrends set to shape global supply chains next year and beyond. The five key supply chain megatrends we explore are geopolitics, climate change, cyber attacks, ESG (Environment, Social, Governance), and labor issues.
This year, three major geopolitical conflicts impacted the global supply chain: the Russia-Ukraine war, China-Taiwan tensions, and the Israel-Hamas war. The Russia-Ukraine war highlighted numerous dependencies tied to the region, including rare earth materials, gas and oil, and neon. Meanwhile, the semiconductor industry hung in the balance as China restricted the export of critical materials germanium and gallium. The ongoing Israel-Hamas war continues to pose a threat to the high-tech industry and pharmaceutical industry.
As global supply chains continue to grow ever more intricate, the impact of geopolitics will only become more and more important to the future of supply chain. In 2024 and going forward, supply chain managers must stay on top of the latest geopolitical developments and truly understand where products and parts originate in order to protect supply chain resilience.
2. Climate Change
Drought is one of the most severe problems we face—and it only gets worse each year. According to the U.S. Geological Survey, “Climate change has further altered the natural pattern of droughts, making them more frequent, longer, and more severe.” Many sectors are affected by droughts, including agriculture, energy, water, utilities, and manufacturing. Currently, the Panama Canal, one of the world’s most important waterways, faces one of the driest years in over 140 years. Learn more in our Special Report: How Industries are Adapting to the Panama Canal Drought.
Hurricanes are another extreme weather event that can impact global supply chains, resulting in lost or delayed shipments, port disruptions, canceled cargo flights, and unbalanced supply and demand. According to the National Oceanic and Atmospheric Administration (NOAA) the 2023 Atlantic hurricane season ranked fourth for most-named storms in a year. To prepare for next year’s hurricane season, be sure to check out our blog: How to Hurricane Proof Your Supply Chain.
3. Cyber Attacks
Cyber attacks have been on the rise over the past few years. In 2022, Resilinc’s 24/7 global supply chain monitoring alert system, EventWatchAI, recorded the most cyber attacks in a single year—up 49%. According to Resilinc data, 2023 will break that record, with Q3 2023 seeing a 62.6% increase in cyber attack alerts. Out of the industries tracked by Resilinc, automotive, life sciences, and healthcare were the top industries impacted by cyber attacks.
Two notable cyber attacks from 2023 were the MOVEit Data Breach and the Clorox Data Breach. Called the biggest hack of 2023, the MOVEit Data Breach impacted over 1,000 businesses and more than 62 million individuals. As for the Clorox Data Breach, Forbes says the breach dented sales by 23-28%—likely over $500 million in lost revenue. Don’t wait for a cyber attack to happen in 2024. Learn how to prepare your business and your suppliers: 10 Ways to Prevent Cyber Attacks Across Your Supply Chain.
4. ESG (Environmental, Social, and Governance)
Staying on top of ESG compliance for forced labor regulations and environmental regulations will be key to smooth supply chain operations. Expect forced labor legislation like the Uyghur Forced Labor Prevention Act (UFLPA), German Supply Chain Due Diligence Act, and EU Due Diligence Act to continue to be top of mind in 2024. Additionally, more and more countries are expected to pass and adopt their own unique legislation. The implementation of these laws is predicted to increase the cost of transporting goods as well as decrease the overall volume or quantity of goods shipped.
With increased regulations and concern over supply chain compliance, Resilinc has seen a year-over-year increase in events impacting the supply chain related to forced labor. This includes compliance, legal action, fines, labor violations, regulatory changes, and OSHA/EMA/FDA standards.
Environmental regulations against harmful chemicals are also on the rise. For example, the ‘forever chemicals’ known as PFAS—popular for their unique properties, such as water and oil repellency, heat resistance, and chemical stability—have come under scrutiny. Despite their widespread use, PFAS have the inability to naturally break down, leading to accumulation in soil, water, and the human body. By 2025, The European Chemical Agency (ECHA) plans to ban PFAS in Europe, and 3M plans to halt all PFAS production. Companies affected will have to completely redesign the construction of thousands of products that rely on PFAS. This is expected to have a major supply chain impact.
Is PFAS part of your supply chain? Learn how to ensure supply chain compliance in our special report: How Are The New PFAS Restrictions Affecting Your Supply Chain?
5. Labor Issues (Shortages and Disruptions)
Resilinc’s CEO Bindiya Vakil has called the Labor Megatrend the “biggest disruption of our time.” With an aging workforce, a shortage of skilled laborers, and the popularity of flexible gig work, this trend is set to only get worse in the coming years. According to the Bureau of Labor Statistics, the median age of the labor force in 2022 was nearly 42. To deal with this trend in the U.S., we are seeing some states— including Wisconsin, Ohio, and Arkansas—propose rolling back child labor laws to deal with the labor shortage.
Labor disruptions like strikes, layoffs, and protests are also a concern. In Q3 of this year, Resilinc data showed a 55% increase QoQ in labor disruptions. Much of this is attributed to labor strikes such as the United Auto Workers (UAW) in the U.S. and Unifor in Canada. Prior to that, however, in the first half of the year, labor disruptions were substantially higher globally—up an astounding 136% QoQ.
The Future of Supply Chain in 2024
Geopolitics, climate change, cyber attacks, ESG, and labor issues—these are the broader supply chain megatrends that will continue to affect the future of supply chains and businesses globally. While risk is inevitable, that doesn’t mean your business can’t prepare for the future. Look at this list of supply chain megatrends and note for which challenges your business has a strategy in place. Are you monitoring your supply chain 24/7 to efficiently respond to disruptions? Have you mapped your supply chain down to your Tier-2+ suppliers for enhanced visibility?
If you need help preparing to face these megatrends and want to elevate your supply chain risk and resiliency program in 2024: reach out for a demo today.