RISK & RESILIENCE
Looking around at the world in 2025, it’ s clear why geopolitical risk is now widely recognised as a core threat to global supply chains. With increasing instability and economic fragmentation, the need for sophisticated risk management strategies has never been greater.
Geopolitical risk refers to threats of political instability, sanctions, trade wars, armed conflicts, regulatory fragmentation and more. These risks carry the potential to disrupt the flow of trade, raise operating costs, drive inflation and threaten the supply of vital goods.
Effective risk management requires strong cross-functional collaboration, threat monitoring, scenario analysis and robust contingency processes.
As CSCOs come to the end of a tricky year geopolitically, we reflect on how organisations can be better prepared for whatever unrest 2026 holds.
How do supply chains respond to geopolitical risk? When geopolitics takes a turn for the worse, supply chain managers first watch closely for signs of trouble – checking how it may affect suppliers, shipments and materials.
Then, the team identifies the most vulnerable links in the supply chain, as well as how serious the impact may be. After that, it’ s time for the back-up plan; this is when supply chain professionals turn to alternate suppliers, different shipping routes or additional inventory.
30 %
increase in transit times, as ships were rerouted around the Cape of Good Hope
Teams use AI-enabled tools to track these shipments and suppliers, enabling them to identify the best adjustments quickly, so the risk can be spread out further across regions.
Perhaps most importantly, once the risk has subsided the team then reviews how successful this response was, using it to plan better for the future.
Geopolitical predictions for 2026 Next year, supply chain leaders can expect global trade growth to slow due to ongoing trade conflicts and tariffs. The World Trade Organization projects a figure of only 0.5 % growth, which will further strain supply chains dependent on cross-border trade.
Meanwhile, JP Morgan predicts rising techno-nationalism could enforce stricter controls over data, technology exports and compliance standards, fragmenting the global technology supply chain and increasing operational complexity and costs.
Regional conflicts and maritime route risks, such as in the Red Sea and South China Sea, will continue to threaten shipping lanes critical to containerised trade. One article from Forbes predicts
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