As we move into the second quarter of 2026, we recognize that the challenges of increased tariffs, a new war in Iran and one still lingering in Ukraine, along with instabilities in world politics and economies … threatens global trade and how logistics responsibilities need to be managed successfully.
Supply Chain Executives faced with these mounting challenges need to develop strategies to maintain resilience and stability in their global supply chain program.
Following these tactics can prove to be invaluable in managing disruption and creating a strong, resilient and successful global supply chain:
- Ability to adapt and pivot quickly and nimbly
- Find trade partners that add value to your operations
- Develop a risk management culture
- Work with strategies to reduce risk, cost and tariff impacts
Ability to adapt and pivot quickly and nimbly
A critical factor in succeeding in disruptive times is the ability to quickly shift with alternative and contingent strategies which can favorably change the impact of the disruptive event.
An example would be that you have a long-time supplier in Ningbo China. The current Administration increased tariffs on China in your commodity by 50%. That makes this supplier a very expensive vendor.
A year earlier, you moved 50% of your purchasing to a new supplier in Vietnam, where the duty rate stabilized at 15%. You now can shift much of the China production to Vietnam, mitigating the impact of the China tariffs.
Personnel responsible for sourcing and purchasing are in a much stronger position to pivot and shift promptly when they have an alternative supplier to pick up the load when others may start to fail.
Supplier diversification is a solid risk management strategy that may slightly increase costs and management time, but offers a proactive tactic for future potential disruption.
Find trade partners that add value to your operations
Trade partners, such as but not limited to, freight forwarders, customhouse brokers, 3PLs and other forms of service providers, can be valuable assets in your global supply chain business model.
They can provide manpower, experience, capabilities, skillsets and have a global reach as an extension of your global supply chain.
They typically have an expansive profile of service offerings to provide capability and support in freight, logistics, warehousing, distribution, consolidation/deconsolidation, brokerage, fulfillment and other related services.
They can become an extension of your desk, not only in planning, but in executing shipments activity typically on every continent, and in major cities of trade.
Other trade partners can be insurance brokers, bankers, accountants and consultants that all provide an array of services necessary to conduct global trade.
Develop a risk management culture
Work with strategies to reduce risk, cost and tariff impacts
Global trade executives at every corporate level of responsibility, from the Boardroom, CEO, VPs, Directors and Operating Personnel, must develop a mindset of the importance of risk management in the global supply chain.
The culture is typically driven from the top and should filter down through every level and be adapted as a “cultural” icon in every organization operating in the international economy.
Risk management can be defined as follows:
All management personnel in these areas need to create risk management controls and protocols in their areas of responsibility. All team members must be rowing the boat with the same cadence and direction: Senior Management, Operational VPs … in sales, customer service, demand planning, warehousing, distribution, procurement, sourcing, legal, finance and logistics.
A strict protocol we highly recommend is “Do not chase cost … but work towards obtaining the best value for your spend”.
When this edict is followed, it automatically brings the evaluation of risk into the equation of procuring any material or service for the company.
There will always be a balancing act in every company and supply chain where you’re weighing risk and cost. The central goal is to weigh risk reduction as having more value than cost in most decisions that we need to make.
Too often we weigh cost — but experience teaches us that the opportunity for failure can be a realized consequence.
Summary
Those companies that prioritize risk assessment in all business decisions will develop better options that create the best opportunity for resilience and stability in all operational functions.
We fully recognize that we have risk every day in every “nook and cranny” of our business models. Risks will always be personified in international trade and in global supply chain.
The risk management steps to follow:
- Assess the risk and measure the potential downside
- Determine if the risk exposure is worth the effort, if it can be mitigated, and what steps may need to be taken
- Evaluate the risk and the costs involved
- Establish where the risk factor has some weight for value to be obtained and at what cost, and what mitigation steps should accompany the decision
Some companies will create a quantitative analysis algorithm and assign a risk factor guide from 1-10 with 1 having little risk and 10 having the greatest risk. Guidelines can be established such as:
- When the risk factor is greater than 7, it will always be a rejected option.
- A risk factor less than 3 is acceptable, but when between 4 and 7, steps must be identified that offer risk mitigation and require senior management approval.
The lingering impacts of Covid, tariffs, two major global conflicts and international politics and economies are certain to produce chaos and disruption… but all require those of us engaged in global supply chain, to make business decisions every day that impact the security of our business models.
Making informed decisions while bringing risk and cost into the equation is a solid strategy that can pay back in spades for both the short- and long-term business cycles we operate in.
12 April 2026
