Supply Chains Are Under Pressure. Here’s How to Guard Against the Impacts.

The last several years have seen a prolonged period of intensifying pressure on global supply chains. As the challenges mount, so do the costs, with businesses and consumers alike paying the price.

Research shows supply chain disruptions cost businesses a 3% to 5% increase in expenses and a 7% drop in sales. Further, when supplies of goods are spotty, sales are missed, revenues lost and the customer relationship and brand reputation suffer. 

Various factors are behind this continuing supply chain destabilization — geopolitical tensions and trade disruptions, a rise in extreme weather events and the effect of inflation on costs, among others. 

Understanding the forces shaping this changing landscape and having the resilience and tools to adapt have become a critical business priority for 2026. In an increasingly unpredictable market, this will better position organizations to mitigate risks, optimize operations and maintain a competitive edge. 

What’s Shifting the Supply Chain Ecosystem

Four major trends are influencing supply chains:

1. Nearshoring 

The practice of outsourcing production closer to end markets (from Asia to Mexico or Canada, for example) exploded during the pandemic, and today 90% of respondents to one survey said it’s essential to keep their supply chains safe. Further, 70% of industrial companies will increase the practice in the next five years. It’s a defining supply chain trend for stability and cost efficiency as businesses adjust to new tariffs.

2. Geopolitics 

A volatile global political environment is influencing trade dynamics, opening new opportunities but also making supply chain planning more complex and uncertain.

3. Natural disasters

Extreme weather is on the rise, and no continent escaped the impact in 2024 as natural disasters caused global losses of around $320 billion. The threat to supply chain integrity is serious, from overall logistics to warehousing disruptions.

4. AI integration

Global investment in AI for supply chain optimization is expected to reach $157 billion by 2033. For all the benefits (think dynamic inventory replenishment), this poses risks, too: cybersecurity and regulatory compliance among them.

 

Strategies to Bolster Supply Chain Sustainability

Three strategies will help the construction industry take advantage of the positive trends affecting supply chains, while gaining operational efficiencies and a competitive edge. Managing the risks will influence supply chain sustainability over the long term. Here’s how.

• Guard against disruptions with resilience planning — Disruptions on any front are inevitable. Preparing for them helps control their impact. For those most vulnerable to supply chain fractures, backup options are key. Companies are well advised to partner with logistic experts to devise a well-defined, comprehensive resilience plan that positions them to best manage any potential supply chain threat. The spate of tariffs being imposed by and against the U.S. will likely continue to be a major supply chain disruptor, particularly affecting consumer goods, automotive and energy.
• Leverage the power of AI tools — Smart businesses are quickly getting up to speed on deploying AI, and that includes its capabilities for supply chain risk management. AI software solutions, for example, allow insurers to take a multifaceted, real-time approach to inventories. Not only does it lead to tailored coverage, but its optimized capabilities for procurement, forecasting, visibility and inventory management can boost cash flow.
• Partner with a broker that really knows the territory — Supply chain risks are far better managed when the business’s broker partner brings industry-specific supply chain expertise (and integrated solutions) to the table. Capabilities must utilize cutting-edge technologies and a deep grounding in sector-specific supply chain coverage that is customized and holistic. And having a worldwide network of carriers is essential for the best rates and coverage options for supply chain challenges.