Navigating Supply Chain Complexity
A structural reshaping of the supply chain is happening due to a number of factors including policy uncertainty in global trade, geopolitical tensions and technological disruptions.
In a recent report , KPMG outlines five trends reshaping the outlook. (Here are some excerpts from the report.)
Uneven rollout of tariffs disrupts supply chains
On top of supply chain vulnerabilities, tariffs have pushed US importers to stockpile inventories. We saw a 42% surge in shipping rates between Shanghai and the US from December 2024 to January 2025, with intermittent spikes since then as importers use a stop-and-go approach with ongoing trade negotiations.
As tariffs rise, tariff fraud tends to rise, prompting stepped-up enforcement. US Customs and Border Protection collected $163.2 million in penalties in the 2025 fiscal year through June 30, up from $118 million for 2024. The goal is to deter transshipments and the utilization of third countries, potentially increasing compliance costs. The result is a landscape that is growing more unpredictable.
Rules of origin are tightening
August’s new round of tariffs introduced a major shift in how the US will treat country of origin: a 40% tariff targeting “transshipments” that are avoiding higher tariff countries. The Commerce Secretary has said that products with “significant content, like 30%” from a higher-tariffed country would be considered a transshipment.
Advances AI up the ante for cybersecurity
Cybersecurity has become one of the top risks for executives in supply chains. The FBI’s Internet Crime Complaint Center (IC3) reported over 859,000 cybercrime complaints in 2024 with losses exceeding $16.6 billion; that’s up from $3.5 billion in 2019. Ransomware remains the biggest threat to critical infrastructure.
Disruptive weather events continue to rise
Billion-dollar disasters (after adjusting for inflation) occur every two to three weeks today on average, compared to every four months in the 1980s. In 2024 alone, the US experienced 27 disasters in which losses exceeded $1 billion, the second highest on record and second only to 2023. Catastrophic hurricanes, wildfires and storms hit logistics capacity hard; for example, rerouting in the midst of an Atlantic hurricane can take weeks for maritime shippers. Trucking and port operations on land can also be slowed.
Uncertainty throws a wrench into supply chain forecasting
Stocking up earlier in the year before tariffs led to bloated inventories; now the question is whether or not they can be sold. Firms face a delicate balance: overbuying inventories risks a glut if consumer demand falters, while underbuying could lead to shortages and increased costs. This dynamic is particularly acute in sectors with long lead times (such as heavy machinery, high-tech goods and aerospace/defense) and perishable goods.