Top 5 factors to consider when evaluating EHS logistics risks



It is no secret that Covid-19 has reshaped the future of global logistics. The pandemic is exacerbating the same environmental, health, and safety risks that have always plagued ocean shipping, placing more strain than ever before on maritime shipping. To stay on top of ever-changing threats, an emphasis on risk assessment and resilience-building will allow logistic professionals to prepare for the unexpected and avoid future troubles. Re-evaluating the top 5 risks that will impact your supply chain is a great place to start. 

  1. Trade tensions: Trade tensions have caused trade patterns to shift, as the search for alternative markets and new suppliers result in a redirection of trade flows away from China and towards other markets, especially in South-East Asian countries. Tariffs on some specific goods of Chinese origin as well as some Human Rights issues worldwide have increased awareness of specific products when sourcing critical materials or finished goods.
  2. Changing weather patterns: Natural weather catastrophes such as hurricanes, large waves, and high winds continue to hurt the cargo shipping industry’s consistent supply chain model. Due to these events, cargo ships have often been reported to lose some cargo on-board the vessel, and on-time performance has suffered.
  3. Cyber risks: While most computer systems aboard cargo ships as well as at corporate headquarters are self-contained, they are vulnerable to insider threats, such as human error or disgruntled employees with their own motives. Hacks from the outside are still possible, which can steer the ship off course.
  4. Human error: Shipments on international cargo ships have been found mislabeled, improperly handled (without proper blocking and bracing), or carrying other safety risks. This can result in fires on board and containers falling off the moving ship.
  5. Piracy: Cargo shipping theft has been closely linked with piracy at sea, and there have been increasing instances of theft on board over the past several years. According to Statista, contemporary maritime piracy led to 195 attacked ships in 2020.

Recommendations: Shifts in trade have created new challenges that are here to stay for a long time. Because of the nature of their sensitive products, companies should pay close attention to the aforementioned areas of challenge and can prioritize EHS issues by:

  • Checking inventory levels of safety stock for critical materials
  • Plan for disruptions within your supply chain and know both when and how to make quick, informed decisions to avoid further troubles; have a designated person in your organization own this important and critical decision-making role
  • Re-evaluate risks with your direct and indirect suppliers
  • Re-engage with your partners

The above suggestions will not solve every problem within today's supply chains, but they will provide you and your business with a path forward for developing a process for better decision-making. It's time to re-think your approaches to minimizing the levels of risk that are a very real and constant presence in today's world.