The Covid-19 pandemic remains the top disruptor of supply chains, new data shows, with its impacts resulting in an increase in cargo theft, smuggling and child labour.
The findings are from BSI’s quarterly review and outlook. Its Supply Chain Risk Exposure Evaluation Network (SCREEN) third-quarter data found a global increase of warehouse and facility theft, particularly throughout Europe as the world approaches peak shipping season.
Other findings include continuing transportation disruptions due to climate change and natural disasters, and an increase of human smuggling and stowaway incidents as many economies remain weak due to the impacts of Covid-19.
When BSI published its annual Supply Chain Risk Insights Report at the beginning of March 2020, the global business impact of Covid-19 was still in its initial stage. As BSI predicted, the outbreak has led to complex and varying responses by individual governments and businesses and has wreaked havoc on supply chain continuity.
“As expected, Covid-19’s continued impact to the global supply chain remains significant,” says Jim Yarbrough, global intelligence programme manager at BSI. “Unfortunately, we are seeing its most significant impact on vulnerable populations including migrant workers and children. For example, through the data collected by our SCREEN intelligence tool, we’ve found that Covid-19’s negative impact on global economies has led to exploitation of vulnerable migrants who may be stranded in detention centres due to mobility restrictions and an increased use of child labour due to lockdowns and school closures.”
Throughout the year, cargo theft continued globally. Several trends influenced the third quarter this year including:
- Economic hardships worldwide hit migrants and children especially hard, with restrictions on movement stranding thousands. Covid-19 deterred some migration through border closures; however, the movement of migrants has continued, and stowaway detections picked back up during May/June. In addition, challenges of labour rights enforcement across Latin America and parts of Asia highlight the importance for organisations to monitor their supply chains to identify where typical factors that are conducive to labour exploitation may be.
- Corruption by government officials was also a highlighted issue during the quarter. In Mexico, the military took over customs administrations due to the high risk of corruption, although this is predicted to be a temporary fix for the problem.
- Natural disasters posed a significant risk to supply chains, disrupting utilities, halting operations, and creating ground transportation delays. Persistent dry conditions in the northwest region of the US will likely continue to contribute to the risk of wildfires throughout the fourth quarter. The formation of La Nina in the southwestern US, and a significant hurricane season, may exacerbate disruptions to supply chain transportation in these regions.