Businesses are continuing to face supply chain disruptions as geopolitical tensions, tariffs and higher input costs reshape global trade, according to new research from Gallagher.
Its Redrawing Global Supply Chains survey found that 86% of companies experienced a supply chain loss in the past year. These losses included financial hits, operational delays, reputational damage and missed deadlines. The energy and construction sectors were among the most affected.
Despite heightened awareness, insurance protection has not kept pace with exposure.
“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,” the report stated.
For Michael Burg, executive vice president and managing director, manufacturing practice at Gallagher, companies are increasingly scrutinising their exposure to global suppliers: “This awareness is crucial, as it allows companies to identify risks, even though there may be limited options for addressing them.”
Companies are responding in different ways. Sixty-one per cent (61%) said they had sped up decisions such as stockpiling goods and components ahead of possible tariff changes. Meanwhile, 23% delayed major supply chain changes due to uncertainty, and 22% said they still respond only after a disruption occurs rather than taking preventative steps.
Gallagher’s findings show that many organisations are also changing how their supply chains are structured. As trade relationships shift, some are moving production closer to key markets through onshoring and nearshoring to reduce risk and shorten transport routes.
Supplier concentration is another concern. Relying on a small number of suppliers for critical parts can lead to longer lead times, higher prices and reduced bargaining power. Respondents pointed to semiconductor production in Taiwan as an example of concentrated supply risk. Suggested mitigation steps include using multiple suppliers, building regional alternatives and keeping approved backup suppliers ready.
Although respondents expect material cost pressures in manufacturing and construction to ease as interest rates stabilise, uncertainty around tariffs and geopolitical issues is expected to continue in the near term.
Looking ahead, Gallagher’s survey found that cyber threats, supplier consolidation, ageing infrastructure and labour disruptions are expected to shape future supply chain risks. Workforce issues are already influencing strategy, with six in 10 businesses saying people-related risks affect supply chain decisions. Labour costs, access to skilled workers and workforce availability were identified as key concerns across sectors.
Over the next five years, businesses expect to increase investment in India, Southeast Asia and Africa, with Southeast Asia remaining central to “China plus one” strategies, even with tariff uncertainty.
