In recent years, procurement teams have faced a series of major logistics disruptions, from Red Sea shipping attacks and Panama Canal restrictions to port congestion, geopolitical tensions, and extreme weather events.
What was once considered a supply chain issue is now firmly a procurement challenge.
The Red Sea crisis alone highlighted how exposed global supply chains remain. Approximately 30% of global container trade normally passes through the Suez Canal, yet many vessels have been forced to reroute around the Cape of Good Hope, increasing transit times by up to 30% and significantly raising freight costs.
For procurement leaders, the impact extends far beyond delayed deliveries.
Cost Volatility Becomes a Procurement Risk
When logistics networks are disrupted, transportation costs can rise dramatically. During the Red Sea crisis, some shipping routes between Asia and Europe saw freight rates increase several-fold as carriers rerouted vessels and absorbed higher fuel and insurance costs.
This creates immediate challenges for procurement teams managing budgets, supplier negotiations, and cost forecasting. Contracts that appeared commercially attractive can quickly become less competitive when logistics costs shift unexpectedly.
Supplier Risk Assessment Must Go Deeper
Traditional supplier evaluations often focus on quality, price, and performance. Increasingly, procurement professionals must also understand suppliers’ logistics exposure.
Questions such as:
- Which shipping routes do suppliers depend on?
- How geographically concentrated are supply sources?
- What contingency plans exist for disruption?
have become critical considerations during supplier selection and contract renewal.
Resilience Takes Priority Over Lowest Cost
For many organisations, recent disruptions have reinforced an important lesson: the cheapest supplier is not always the lowest-risk supplier.
Procurement teams are increasingly diversifying supplier bases, exploring nearshoring opportunities, and building greater flexibility into sourcing strategies to reduce reliance on single routes or regions. Industry experts have recommended diversifying transport channels and logistics partners to improve resilience during large-scale disruptions.
Stronger Supplier Collaboration is Essential
Periods of disruption place significant pressure on supplier relationships. Organisations with strong supplier partnerships are often better positioned to secure inventory, receive timely updates, and collaborate on mitigating risks.
Procurement’s role is therefore expanding beyond contract management and into proactive supplier engagement and business continuity planning.
Looking Ahead
Major logistics disruptions are unlikely to disappear. Whether driven by geopolitics, climate events, infrastructure constraints, or global conflicts, supply chain volatility is becoming a permanent feature of business.
For procurement leaders, success will increasingly depend on balancing cost, resilience, visibility, and supplier collaboration. The organisations that prepare for disruption before it occurs will be far better positioned than those that simply react when the next crisis emerges.
Citation List:
GEP (2024) Navigating the Red Sea Crisis: What Procurement & Supply Chain Leaders Should Be Doing. Available at: https://www.gep.com/blog/strategy/red-sea-crisis-what-procurement-supply-chain-leaders-should-be-doing (Accessed: 20 August 2026).
J.P. Morgan (2024) What are the Impacts of the Red Sea Shipping Crisis? Available at: https://www.jpmorgan.com/insights/global-research/supply-chain/red-sea-shipping (Accessed: 20 August 2026).
Transporeon (2024) The Red Sea Crisis and its Impacts on Supply Chain. Available at: https://www.transporeon.com/en/community/blog/the-red-sea-crisis-and-its-impacts-on-supply-chain (Accessed: 20 August 2026).
