Some supply chain risks are once-in-a-decade events: wars, tsunamis, pandemics. But just because they’re rare occurrences doesn’t mean you don’t have to account for them. In fact, when low-probability, high-impact supply chain risks catch organizations unaware they can be devastating: halting deliveries, demolishing profits and even triggering bankruptcies.
Planning for the unexpected is critical. Leaders with the insights that flag pre-indicators of the most damaging risks (and the strategies to track and tackle them) will be best prepared to anticipate and overcome crises that would otherwise eat into profitability.
The lower the risk, the higher the price
Black-swan supply chain events like storms, strikes and tariffs, once rare, are occurring with greater frequency. Today, these and other high-impact supply chain risks add up to a tapestry of potentially ruinous events for multinational firms. In 2024, some of the biggest obstacles to smooth shipping and logistics, included Hurricanes Helene and Milton, a tropical cyclone in Southeast Asia, and escalating conflict in the Middle East and the war in Ukraine. In fact, our Sphera Supply Chain Report Report 2025 found that the number of natural hazard-based risks rose by 15.8% in 2024, compared with 2023, with tsunamis and volcanic activities up 160% and 104%, respectively, along with a 53% increase in flash floods. And 2025 has already signaled a continuation and acceleration of these trends.
Proposed tariffs on Canada, Mexico and China — as well as on American steel and aluminum imports — threaten increased costs, complicate demand planning and exacerbate existing supply chain vulnerabilities. Much of last year’s geopolitical risk in supply chains in the Middle East and Eastern Europe has carried over into 2025. Extreme weather events like California’s wildfires have increased transit times, forcing fast pivots and inflating prices. What’s more, health shocks like the H5N1 bird flu have produced food shortages, revealing unforeseen supply vulnerabilities.
Effective contingency planning offers a way out
Within this context, supply chain disruption management calls for a mindset shift. While it’s impossible to anticipate every disruption, companies that build adaptable risk mitigation strategies will weather the storm and emerge with more resilient supply chains.
In response to the evolving risk climate, many organizations are adapting operations and adopting new approaches to reduce uncertainty and boost security. Specifically, they are prioritizing contingency planning, supply chain automation and supplier diversification to provide greater stability and more options when disruptions hit.
For example, some are turning to nearshoring and “friend-shoring” to shorten supply chains and reduce risk, moving production closer to home or to a more stable region. Others are focused on widening their supplier networks. When shipping slows down, they can rely on alternative suppliers to ensure they always have a high-quality partner to choose from. Finally, our report finds that our customers are increasingly leveraging best practices of engaging suppliers in-depth, fostering a collaborative environment to address these novel supply chain issues.
The new toolkit for managing black swan supply chain events
The future of risk mitigation is all about early preparation and agile pivots.
For instance, platforms that enable real-time risk modeling and monitoring ease business continuity planning by helping firms identify vulnerabilities before they become crises, extending into sub-tier suppliers. With advanced software and centralized data, companies can prioritize the most dangerous risks, perform cost analyses and implement continuous improvements to remove inefficiencies, high-risk links and unreliable suppliers.
A risk toolkit built on automated insights, premium data and frequent supplier engagement provides unprecedented agility in the face of unforeseen events. Teams can anticipate hidden risks and plan contingencies for even the most unexpected and sudden disasters that come their way.
Preparing for the unexpected takes planning and a trusted partner
Today, many high-impact supply chain risks that were once rare are now commonplace. To thrive in an uncertain world, the most successful companies will implement proactive risk planning and technology. As an example, many of the risks we explore in our Sphera Supply Chain Risk Report 2025 have predictive characteristics; organizations that leverage leading edge technologies can better anticipate threats of all sizes and likelihoods.
The problem with low-probability risks is not just in their unpredictability but in the false sense of security they provide. By leaning on Sphera’s Supply Chain Transparency solution, businesses gain the efficiencies and insights to take on both routine and once-in-a-lifetime disruptions. Streamlined data analysis and end-to-end supplier visibility expand the scope of risk management for more stable, responsible and productive supply chains.
Explore the Sphera Supply Chain Risk Report 2025 to learn more about how to prepare your organization to face the unexpected. Or, contact a Sphera expert to start optimizing your risk approach today.
