New US tariffs are prompting companies to reduce their reliance on China as a source of imports, but the implications for supply chains go much further. From the rise in dark shipping to the escalation in sanctions to countries including Iran and Venezuela, supply chain reorganisation is becoming a priority. Capt. Steve Bomgardner, VP – Shipping & Offshore, Pole Star Global explores the new risks and highlights the importance of intelligence driven contingency.
Global Conflict
The World Economic Forum cites war as the ‘biggest risk to the global economy this year’, placing new demands on business to consider the implications for supply chain disruption.
Companies have worked hard to extend the supply base in recent years, with China's share of U.S. goods imports falling significantly, down from 22 percent in 2017 to 17 last year . The UK has also reduced its reliance on China, with imports falling by 18% between mid-2023 and mid-2024. However, supply chains have become increasingly convoluted. While direct sourcing may have reduced, with other foreign suppliers imported goods – including Vietnam and Mexico – increasing their reliance on China.
How many companies are at risk of importing goods from China through the back door? Furthermore, just as sanctions against Russia and Iran have led to a significant escalation in shadow fleet (STS) and dark shipping activity, creating significant additional risks to legitimate ships e increase in tariffs is also expected to prompt significant changes to global trade routes and volumes. It will influence both the size and activity of the dark fleet, as companies in prohibited countries look to find new routes to market, especially for high value goods.
Real-Time Assessment
From insurers to ship owners and importers there is an urgent need both to understand the implications of this global geopolitical landscape on supply chains and to build robust, preferably multi-layered, risk mitigation models. From ensuring compliance to rapidly changing sanctions to real-time route visibility and the ability to switch to second, even third choice transport routes in the event of disruption, supply chain resilience has become both more critical and more demanding.
Engaging, even unwittingly, with vessels linked to the dark fleet poses significant compliance and reputational risks. Many of these vessels are eventually sanctioned, leaving businesses exposed to regulatory scrutiny and financial loss. Yet with the ever expanding number of vessels targeted by the Office of Foreign Assets Control (OFAC) using deceptive tactics, such as changing names, to avoid detection and continue illicit activities, the onus is on businesses to act quickly to identify possible exposure to these vessels and unintentional trade with these entities.
Proactive Management
Real-time technology that provides both continuous vessel tracking and monitoring as well as instant alerts when screening newly sanctioned vessels underpins effective compliance. In addition, companies can harness dedicated intelligence solutions to provide proactive risk identification by identifying high risk dark fleet vessels long before they hit the sanctions list, allowing early risk mitigation through vessel change.
Immediate insight combined with highly effective modelling is also key to managing the delays that can result from problems caused by industrial action. 24/7 routing support, combining AI and expert human insights, enables vessels to minimise risk to cargo and life. In depth understanding of route options and shipping patterns is key to allowing an effective response to challenges such as the US port strikes along the Eastern Seaboard.
This insight can also play an important role in determining the viability of new second and third line contingency suppliers. In addition to understanding the ability of a supplier to meet demands, the cost, safety and reliability of the shipping route is now a vital consideration.
Conclusion
Supply chain disruption is inevitable. Yet while 72% of companies experienced adverse operational impacts due to supply chain issues, only 2% feel prepared to address these challenges. With economic and political conflict set to dominate during 2025 businesses, and countries, are increasingly vulnerable.
Add in compliance demands, tariffs and the risks created by the dark fleet, alongside the existing pressures on containerised shipping and price caps and change is now essential. Supply chain reorganisation should be a priority, with organisations exploring changes such as near-shoring and short shipping to reduce risk and improve control. At every step however, it is also vital to build in both resilience and contingency and that can only be achieved through effective use of intelligence and knowledge systems that deliver real-time insight across the entire supply chain.