This week’s supply chain risk news
A shutdown and a slowdown
Supply chain complications are becoming apparent after U.S. lawmakers hit an impasse on funding plans. This resulted in a government shutdown and furloughs for hundreds of thousands of federal workers. For now, many others, like air traffic controllers, are working without pay.
While cargo is still moving through ports and airports, documentation and inspections may lag. This is because many key support staff are among the furloughed.
One indicator of what to expect could come from the Port of Los Angeles and neighboring Port of Long Beach, where shipment dwell times increased 15 to 20 percent in the most recent U.S. shutdown seven years ago.
Other potential issues include customs delays for trains crossing the United States’ borders with Mexico and Canada. Low morale and absenteeism could also lead to longer lines and delays at airports as more officers who screen cargo call out of work while they’re not getting paid.
It’s not clear how long the shutdown will last, but each day the impacts and uncertainty increase.
Ecuador faces logistical challenges due to nationwide strike, protests
Ecuador’s government has declared a state of emergency and a nightly curfew amid strikes and protests over fuel price hikes and key subsidy cuts.
Numerous protests have caused logistics issues in the country’s Sierra region. Protesters in Imbabura burned a police headquarters and blockaded a highway, halting truck movement. In addition, demonstrations have also disrupted traffic further south in places like Quito, the nation’s capital.
Ecuador’s president, Daniel Noboa, has promised to use force against blockades of food supplies or oil wells. The police and the military have responded to stop protesters from blockading roadways.
With cargo trucks stranded along parts of the Panamericana Highway, seasonally sensitive crops like potatoes, lemons, and pulses are at risk. The blockades and curfews also affect provinces that export agricultural goods like sugar, coffee, corn, wheat, bananas, and dairy products.
It’s not clear when the protests might conclude. We have more details in our Risk Center.
A European experiment to make polluters pay
For years, the European Union has worked on rules to fight climate change by driving down carbon emissions. But if a company in Europe doesn’t like those rules, there’s a chance they’ll just move their operations somewhere else and ship their products to the EU without slowing emissions—a concern known as “leakage.”
That’s why the bloc is now poised to implement a carbon border tax. This is officially known as the Carbon Border Adjustment Mechanism, or CBAM. Starting January 1, 2026, importers will have to pay for certificates to bring in goods like steel, aluminum, and fertilizer, CNBC reports.
China, Russia, and Brazil have all taken issue with the plan. Furthermore, it could jeopardize the EU’s recent trade deal with the U.S. India has also warned it could retaliate, saying Europe bears greater historic responsibility for climate change and should pay accordingly.
Still, if other places respond by devising carbon taxes of their own, there’s a case that’s giving EU climate officials exactly what they want.
Some of the best things in life are free
While the United States has sought to leverage its centrality in global trade through tariffs, some smaller countries are banding together around free trade—and starting to reconfigure shipping corridors and hubs accordingly.
Among the initiatives to this end, per Forbes, is a partnership led by New Zealand, Singapore, the United Arab Emirates, and Switzerland; others involved range from Norway to Morocco to Chile. The arrangement is emblematic of a wave of new trade deals and alliances.
One result is an expansion of “South-South” shipping routes connecting Asia, Africa, and Latin America. “The drivers are clear: demographics, urbanization, industrialization, rising middle classes and infrastructure in the Global South,” the Forbes piece notes.
New hubs are also emerging, like Mundra, India’s largest port, and the new Vizhinjam port near Kerala, which “boasts world-class deep water and a location just ten nautical miles from the busy east–west shipping lane.”
While some of these shifts were doubtless brewing before the tariffs, their pace seems to have picked up as a result. The U.S. Supreme Court may yet undo many of the country’s new levies, but it’s hard to imagine fully reversing their global effects.
Where to begin?
If your company hasn’t faced a supply chain disruption in the last year, you’re lucky. That’s one upshot from a survey that found such disruptions hit almost 80 percent of organizations, and more than once in many cases.
Some of those risks are impossible to avoid, underscoring the importance of being prepared. But what if you could do more than just survive such crises—what if you could make risk a strategic advantage that unlocks financial and operational value?
This is the promise of supply chain risk management, or SCRM—a proactive, holistic strategy that protects your business while driving growth and resilience. There are essentially three steps to spinning up SCRM.
First, you identify your main pain points, along with potential “quick wins.” To this end, you want a cross-functional team and perspective from stakeholders. Knowing what keeps them up at night and which priorities are most critical gives you a starting point for applying SCRM. Using timely data and predictive intelligence, you can then better manage risk and start delivering results worth building on.
As more departments buy in, the payoffs increase both in profits and overall resilience, as we discuss in more detail on our blog.
