Supply Chains, Redrawn: Lessons from Business Leaders Across Industries

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In today's interconnected world, supply chains have become the frontline of business risk across various industries.

Gallagher conducted a Redrawing Global Supply Chains survey that shows how widespread the impact of supply chain disruption has become: In the past year, 86% of companies report experiencing a supply-chain loss (for instance, a financial loss, reputational damage, missed deadlines or operational disruption), with the heaviest impacts found in the energy and construction sectors.

Geopolitical risk, tariff and trade frictions, and rising material costs are redrawing the supply chain landscape in real time. Yet protection remains uneven despite a high awareness of the risk: Just one in three were fully covered for the supply chain losses they experienced in the last 12 months.

"Organizations are now more cognizant of their exposure to suppliers located in regions marked by geopolitical uncertainty," observes Michael Burg, executive vice president and managing director, Manufacturing practice at Gallagher. "This awareness is crucial, as it allows companies to identify risks, even though there may be limited options for addressing them."

When it comes to proactive supply chain risk management, a sizable share of companies — 22% — remains reactive in their approach to responding after a disruption has occurred.

Companies say they need more data and risk advice so they have more visibility into the interdependencies and vulnerabilities within their supply chains and build greater resilience.

Sixty-one percent reported they'd accelerated decisions, including stockpiling goods and components ahead of the imposition of tariffs, while 23% said they'd put off making substantial changes to their supply chain strategy due to rising uncertainty.

Inflation, tariffs and geopolitics are the main drivers of supply chain disruption

The top three risks driving disruption at present are rising material costs, geopolitical instability, and tariffs and trade disputes. These pressures are widespread across industries, with more than 70% of leaders expressing concern over disruptions increasing due to these factors.

According to the leaders' assessment, these risks are also the least effectively managed, with businesses indicating that they have less control over geopolitical and external threats. Just one in four businesses rate their risk mitigation strategies as very effective against geopolitical threats, for instance, compared to a 40% effectiveness for managing cargo theft risks.

As geopolitical dynamics shift, new trade alliances and regional commercial partnerships are reshaping supply chains.

In response, companies are onshoring or nearshoring operations and reconfiguring trade routes to navigate emerging conflicts and shifting allegiances.

Inflationary pressures, particularly rising material costs in manufacturing and construction, are expected to ease as interest rates continue to stabilize. This trend is supported by central bank actions and International Monetary Fund forecasts.

Yet uncertainty about tariffs and geopolitical threats is expected to persist over the near term, according to respondents, keeping supply chains under strain.

Looking further ahead, supply chain professionals anticipate that cyber threats, supplier consolidation, aging infrastructure, labor disruptions and human capital challenges will dominate the future threat landscape.

For six in 10 businesses, people risks shape their supply chain strategy. Disruptions such as the pandemic and the 2024 US and Canadian East Coast port strikes underscore how workforce challenges can present bottlenecks and ripple across global supply chains.

Labor costs, access to skills and worker availability top people-related decision drivers and vulnerabilities. Respondents from the agriculture (40%) and transportation (31%) sectors report labor costs as primary investment drivers, while energy and renewable energy (42%) prioritize access to skilled talent.

These realities are steering investment toward India (+5%), Southeast Asia (+4%) and Africa (+4%) over the next five years. Southeast Asia and countries such as Indonesia and Vietnam are expected to remain key beneficiaries of "China plus one" strategies in 2026, despite the added complication of tariffs, according to survey respondents.

A closer look at the three main drivers of supply chain disruption

Mitigation strategies to build supply chain resilience

As companies continue the shift from just-in-time to just-in-case supply chain resilience strategies, the most popular strategies for building supply chain resilience are emerging. According to the survey, the most effective moves focus on:

• Smarter storage and inventory practices
• Real-time technology-enabled monitoring for early warning
• Tighter oversight of lower-tier suppliers
• Diversification of sources and routes

Together, these supply chain risk management steps improve visibility, shorten response times and help keep service levels intact when pressure builds.

Not every risk is directly controllable, however. As noted, companies identify tariffs and trade disputes, shifting geopolitics and the rising cost of materials as the most concerning drivers of disruption; however, they also report that their mitigation strategies in these areas are among the least effective.

Diversifying can build resilience in a more fragmented world

Diversification of trade partners has emerged as a cornerstone strategy for managing supply chain risk. In many cases, supply chains are becoming more compact as companies invest in onshoring/nearshoring and "friendshoring" in an effort to build resilience and maximize the benefits of regional trade agreements.

These approaches reflect a broader response to a world where global trade is no longer governed by a single set of rules. The traditional global trade system is changing rapidly and trade blocks are being revived, reshaping how goods flow around the world.

Strategic supply chains are becoming increasingly critical as countries seek to control critical resources such as technology, energy and rare earth minerals for both security and economic advantage.

"Diversifying is important, particularly when it comes to suppliers," explains Jackie Robinson, managing director of operations for the Construction practice at Gallagher. "Companies should thoroughly examine their supply chains and seek to diversify their sources."

Redrawing supply chains in this way demands real-time data and insights on markets, trade agreements, ethical and compliance considerations and flexible strategies as companies continue to adapt to a more fragmented world.

Half of companies are using real-time supply chain monitoring platforms, but fewer incorporate external data, with just 43% saying they analyze broader market conditions or geopolitical trends.

Stockpiling is a strategy with unintended risk concentrations

Against a backdrop of trade uncertainty, stockpiling is a strategy that nine out of 10 respondents are turning to. While these just-in-case provisions help to cushion the impact of supply bottlenecks and new tariffs, they also result in an increased concentration of risk. Storing more goods at warehouses in ports and industrial parks elevates natural catastrophe exposure and increases the risk of cargo theft.

As Alec Russell, managing director, Marine Cargo at Gallagher, explains: "You can de‑risk in one place and add risk in another. If you introduce tariffs, everyone stockpiles, then a windstorm comes through, and the loss is bigger than it normally would be. We're having a greater accumulation of values in single locations."

Likewise, higher volumes of components and raw materials in transit or sitting in one place amplify the risk of theft, with a quarter of businesses saying they're aware of but not prepared for this scenario.

From an environmental perspective, longer trade routes and increased emissions add cost and sustainability challenges, cited by 29% of respondents as a concern. Obsolescence is another consideration, with the risk that stockpiled goods could become outdated before they enter the market, especially in fast-moving sectors.

Tools for mapping the supply chain should improve insurability

With just one in three respondents reporting that their most recent loss was fully covered, the protection gap remains a key issue for companies seeking to de-risk. Thirty-six percent say coverage for supply chain-specific risks is too limited, with limited capacity, policy complexity and high premiums serving as additional barriers.

Companies' ability to map their networks of suppliers becomes more challenging as they move upstream. Six in 10 companies report limited or no oversight beyond their direct suppliers. These blind spots hide vulnerabilities and increase the chance of costly disruptions.

As a result, demand is strong for data, analytics and risk and insurance solutions. Businesses say they want clearer visibility and faster signals when conditions are changing.

Respondents also called for flexible insurance products, tailored risk assessments and clear guidance on regulatory, trade and sanctions compliance across jurisdictions.

Gaining greater transparency into supply chain interconnections should aid the growth of the insurance market by allowing underwriters to more easily assess and price the risk.

From exposure to action: Building adaptive supply chain resilience

Six years on from the start of the global pandemic and 15 years since the global disruptions caused by both the 2011 Tohoku earthquake and Thai floods, it's clear that supply chains remain a global challenge. Close to 90% of companies reported losses in the past year from shocks ranging from trade disruptions and supply bottlenecks to labor shortages and extreme weather; over half were deemed to be moderate or major claims.

Supply chain decision-makers say they want more data, predictive analytics and actionable insights so they can identify and mitigate vulnerabilities and better anticipate risks they cascade.

In terms of risk transfer, companies are asking for tailored assessments, flexible products and guidance that align with their sectors and unique supply chain structures. This request is an opportunity to close protection gaps and help businesses make informed and confident decisions.

The insurance marketplace is the place to find risk management and financial solutions that offer contingencies and support recovery when volatility strikes.

Published in February 2026