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Home » Blogs » Think Tank » Supply Chains Are at Risk — But No One Threat Stands Alone

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Supply Chains Are at Risk — But No One Threat Stands Alone

A shipping port with multi-colored containers stacked in rows seen from above, blanketed in fog

Photo: iStock / bfk92

May 8, 2025
Pierre du Rostu, SCB Contributor

The most immediate danger to global shipping today is cyberattacks. And while artificial intelligence has brought tremendous benefits, it has also been a gift to hackers.

In 2024, cybercrime is estimated to have cost the world a staggering $9.5 trillion in damages, stolen money, lost productivity and related costs. With AI growing daily in sophistication, cybersecurity is becoming both more difficult and more necessary for those managing supply chains.

Ports, cargo systems and freight networks are prime targets for hackers. One successful breach can paralyze essential trade routes, leaving manufacturers stranded and supermarket shelves bare. But severe weather, made more serious and more likely by the climate crisis, is also squeezing supply chains from every direction. The Panama Canal’s ongoing drought has slashed shipping capacity, forcing vessels to take longer and more expensive detours. And political turmoil presents an additional challenge. Attacks on ships in the Red Sea have turned a vital trade passage into a high-risk zone, forcing many vessel to take the long way around Africa, adding thousands of miles to their journeys, inflating costs, and delaying deliveries.

It would be tempting to see these risks as isolated, and to tackle whatever offers the most “bang for your buck.” That’s an illusion, and a dangerous one. Risks today, though apparently distinct, interlock. To treat them in isolation is to play a very long game of Whac-A-Mole, dealing with a problem only for it to reemerge right away. If global warming makes certain areas unlivable, then that will drive mass migration. The integration of new communities into established ones causes political tensions and short-term economic strain. That can weaken governments and cause political crises, or create civil unrest.

Cybercrime thrives: laws become harder to enforce, economic hardship pushes skilled individuals to hack, and data leaks become more likely. Supply chains, already attractive targets, become seriously vulnerable.

Global warming can harm supply chains directly. So can mass migration, which often leads to labor shortages. Political crises can cause capital flight, which reduces investment in infrastructure; destabilize trade agreements and economic partnerships, or prompt the weaponization of supply chains and restrictions on the export of critical goods, such as rare earth metals. The prime threat to supply chains isn’t this or that crisis, but a polycrisis: a situation where multiple, interconnected crises converge and amplify each other.

The sheer complexity of this risk landscape, and the extraordinary cost attached to picking up the pieces when disaster strikes, has forced insurers to evolve. Reflective, progressive insurers are moving quickly to a model centered on prediction and, in some cases, prevention — not on compensation and response. This is, in fact, a welcome shift. It’s a cliché that prevention is better than cure. But if took a crisis for it to happen, then the blame can’t be laid at the feet of insurers. The technology to predict accurately simply didn’t exist in the past.

It does now. First among the tools insurers are using is the result of rapid advances in the field of Earth observation and associated technologies. This area corresponds to the gathering of information about the planet using remote-sensing (mainly satellite imaging) and ground-based sensors, linked to the internet of things. Sophisticated, AI-powered analytics and machine-learning make sense of the raw information gathered so that insurers can inform their clients about vulnerabilities — for example, port congestion, cyber threats and severe weather events. All can be tracked. And already the big shipping firms are leaning on this tech to optimize routes and enable rerouting. The technology gets better every day.

That’s just as well, because the threats that together make up the polycrisis are evolving very quickly. The climate crisis is getting worse, hackers are growing in boldness and sophistication, and geopolitical volatility seems to be increasing. Critics should bear this in mind as they lament the perceived high cost of preventive insurance, or the burdens associated with technological integration. Not only is such tech necessary, but it is, in the medium term, cost saving: the European Investment Bank estimates that every €1 spent on prevention saves between €5 and €7 in recovery costs.

The polycrisis is real, and supply chains are the most vulnerable pressure point. By recognizing the interwoven nature of today’s risks and making use of the cutting-edge technology now at our disposal, we can keep those crucial veins and arteries of the global economy health and intact, and ensure that goods continue to flow around the world.

Pierre du Rostu is chief executive officer of AXA Digital Commercial Platform.

Supply Chain Visibility HR & Labor Management Regulation & Compliance Supply Chain Security & Risk Mgmt

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