Chokepoints and Cyberattacks: Why Modern Supply Chains Need a War Room

The deal signed between the U.S. and Iranian presidents on June 17 is designed to bring an end to hostilities in the Middle East, and – crucially, from a trade perspective – the opening of the Hormuz Strait. Assuming it holds, the agreement should result in, among other things, unblocked shipping lanes and lower fuel costs.

That will stand in stark contrast to the situation in recent months: Paralysed shipping lanes; overnight sanctions; and skyrocketing fuel costs. Yet although the deal is welcome, it is hard to ignore the conclusion that the era of predictable logistics is dead. Today, supply chain executives aren’t just managing inventory, they are navigating geopolitical crossfire.

It wasn’t always the case. For decades, firms were able to survive and thrive on a finely honed just-in-time approach to supply chains. It was easily done: In a world focused on trade, logistics became so reliable and so efficient that even the largest firms could pare their inventory to the bone, confident that open borders and boringly predictable trade routes meant everything would go smoothly.

That approach worked extraordinarily well – until it didn’t. For some years, trade has been pummelled by constant shocks to supply chains, with one crisis after another keeping supply chain executives up at night looking for solutions. A key event was the Covid-19 pandemic, which exposed the weak links in the global supply chain and shone a spotlight on previously ignored vulnerabilities. 

“There was a dogma before Covid to have one supplier for one product globally,” says Stéphane Descarpentries, Director, Strategy and Chief of Staff at FM Logistic. “Today, that lack of redundancy is a liability.”

In response, the logistics industry is evolving to accommodate clients’ strategic decision to abandon just-in-time for the more resilient just-in-case approach to inventory management.

In a world where yesteryear’s predictable operating environment is no more, and where new shocks seem to arrive with depressing frequency, what are firms to do?

Take the Iran war: At the time of writing, the deal seeks to reopen the Strait of Hormuz after being shut for months – a period that saw significant volumes of oil, liquid natural gas and fertilisers carried by ship lost to global markets. That jeopardised industries ranging from aviation and energy to manufacturing and agriculture.  

And these are hardly the first warning signs of maritime fragility: In March 2021, for instance, a container ship became lodged sideways in the Suez Canal, another key maritime channel that carries 12% of global trade, blocking that route and crucial cargo for six days.

The fallout isn’t limited to maritime trade. Overland logistics networks across Europe and Asia have also dealt with the impact as the conflict drove up fuel prices, inflated insurance premiums and triggered severe delays at intermodal transport hubs. These issues are further compounded by a tariff landscape that’s in constant flux, prompting companies around the world to rethink their supply chains.

“There is this multiplication of events which is completely changing the global transport network,” says Descarpentries. 

To survive, businesses are overhauling long-established trade routes, and leaning heavily into friend-shoring and near-shoring to keep goods moving between ideologically allied markets. As companies diversify supplier networks, notes Descarpentries, markets like India and Vietnam are reaping the benefits. In Europe, Poland has emerged as a key near-shoring hub.

When crises erupt this fast, firms that rely on a patchwork of local agents and disconnected technology platforms risk having their cargo remain stranded. What they need is a unified offering that provides full-service agility. That is something only global providers can offer, along with the ability to achieve the following:

Securing capacity: When capacity at regional warehouses disappears, established providers like FM Logistic can lean on longstanding relationships to secure space that smaller competitors cannot.

Getting practical, high-impact visibility: To retain control in the information age, proactive firms prioritise agility and flexibility with digital dashboards like FM Logistic’s My-SCM and Control Tower offerings that ensure clients can eliminate operational blind spots, from customs brokerage through to last-mile delivery. These dashboards use real-time data for pinpoint SKU-level tracking, which helps clients to shift cargo seamlessly across intermodal options as soon as a new threat or trade policy change is flagged. For instance, when a new tariff is levied or a fresh conflict flares up, an executive, instead of making frantic phone calls, can look at their Control Tower screen to locate their shipment. That makes planning alternative routes far easier.

Mitigating evolving regulatory risks: These dashboards also help clients to navigate an increasingly complex regulatory landscape. Take sanctions: Adherence requires more than standard paperwork, calling for specialised tools and dedicated compliance teams to vet third-party suppliers to ensure firms don’t inadvertently engage with flagged entities or violate international sanctions. Customs compliance tools also play a vital role in ensuring authorised transit across international borders so clients stay compliant.

Additionally, says Descarpentries, full-service providers bring vital safeguards to the table, including crisis management frameworks, continuity plans and defences against the increasing threat of cyberattacks on supply chains, which have surged in recent months. 

This is key because the impact of global events has shown procurement leaders the need to let go of legacy operating models and logistics partners that prioritise short-term savings and instead adopt alternatives that fit their long-term strategic vision. 

“If your logistics partner is chosen solely on the lowest bid, its impact will certainly be felt in your supply chain during the next crisis,” says Descarpentries. “So, you need to look deeper – at their financial capabilities and their ability to adapt their processes if there is an issue.”

If the events of recent years have shown anything, it is that geopolitical frictions are no passing phase. They are the new baseline, and the firms navigating this successfully are those building resilient partnerships. By stress-testing systems against extreme scenarios, by prioritising end-to-end visibility and by integrating operational agility, they are positioning themselves to weather geopolitical storms – no matter what disruptive event emerges next.