Global supply chains are under structural volatility, reflecting shifts in trade, logistics and economic patterns at the World Economic Forum Annual Meeting 2026.
Global supply chains have moved from an era of cost efficiency to one defined by “structural volatility,” with tariffs, chokepoints, shifting alliances, and national security concerns forcing companies and governments to pay for resilience. Dutch Prime Minister Dick Schoof argued that “just in time… is not the right way,” calling for redundancy in vital infrastructure and better mapping of hidden weak links. Panelists emphasized that disruptions now recur every three to three-and-a-half years, and that losses are material: one estimate put private-sector profit losses since 2017 at $320 billion, while a 1% drop in global trade could displace 11 million jobs.
Vulnerability often appears first in tier-two and tier-three suppliers, where smaller firms lack visibility and buffers. Diversification helps, but only if it avoids shared single points of failure; “if you have the canal of Panama on one of the critical paths and on the other also, then you will not solve” the problem. Cyber risk rises with complexity, and André Kudelski warned of attacker asymmetry: defenders need “99.999%” security, while adversaries need succeed once. The consensus prescription: invest in technology and AI for real-time visibility, build modular, scenario-based architectures with affordable Plan Bs, and create optionality through regional sourcing—accepting a resilience premium of roughly 3–10%.
Thank you for joining us. As we talk about the global supply chains. Well, for decades, supply chains were driven by cost efficiency. No longer that era some say is dead has ended possibly. And that's because of new tariffs, shifting alliances, global trade chokepoints. Also national security concerns. Now it is about resilience. But even as resilience has become the mantra for companies as well as governments, how far are they willing to go? How much are they willing to pay for security in global supply chains? Prime Minister, we've just heard from President Trump reiterating the need for the US to have control of the Greenland. And that's because of the mineral supplies there. What's your take on how politicized the issue of supply chains have become today? As a prime minister, how are you assessing the issue?
Well, I think first of all, the supply chains should be on the political table because we are much too dependent, in our vital infrastructure, whether it's healthcare, whether it's food, whether it's energy. So we we have to really, make sure that we are redundant, and that we can go on and just in time. It's not the right way. I mean, economically, it would make very good sense. But from the perspective of security and, and and resilience, it's not the right way to go forward. And it means that that we together, companies and, and, and government have to together have to invest and make sure that we get back that redundancy. And, we, we, we had a famous football player. It was Johan Cruyff, and he made this, he made also this, this very strange remarks. And one of it was in football terms, he said, when you see someone sprinting, you know, he's too late. And and, and when we look now at supply chains, we should think exactly the opposite, because we are now sprinting and we should be delaying, because that's the way, in the end, that we are capable. And of course, it's for the Netherlands, but also for Europe, but also for the United States, and probably also for other economic blocs. We have to make sure that we got more autonomy, that we have less dependency on other blocs and take care of our own redundancy.
Also agility, agility versus fragility. That's a big debate right now. Are we more fragile today? Are we in a state of, I don't know, enhanced, fragility because of the political environment and uncertainties?
First of all, I think definitely fragility has been embedded and volatility in the systems for several years now, and it keeps on coming back into the system. If you look at disruptions not only in historically, it's happened every 7 to 8 years. Now it's shrunk to every three, three and a half years. You look at our emerging market index, 51% of the leaders that we've interviewed expect further volatility. 35% say it's here to stay. So the point is it's not is there going to be fragility or volatility is how how well positioned you are to face it. And how can you be resilient enough to bounce back. You look at 2025. You look at, you know, global growth three, 3.5%. But really if you peel the onion, it had several buffers in there. It had the buffer of AI, all that capital investment that took place. One of the Harvard professors actually said, if you look at the US growth, it would actually be half a percent, actually slightly lower than that. If you take out all the AI investment, you had the tariffs where headline news was quite high but landed at 14%, all that $300 billion of front loading, which acted as a buffer, and obviously government fiscal spending. So if you look at trade, in reality, going into 2025, merchandise trade is only going to grow at around half a percent. So you need to think twice about what do I need to do in order to be resilient, because it impacts not only economies, it impacts companies. E came out with a really interesting study that said, since 2017 to 2024, $320 billion of profits were lost from private sector companies because of this impact. So again, yes, it is fragile. Volatile is embedded. But as you mentioned, it's how do we jump back out of it.
Who gets hit first? Dinesh. Is it tier one or is it those embedded lower.
So actually it starts not at the tier one. It starts going down to the tier two, tier three. And even the smaller companies which tend to operate are the ones which get actually exposed first. And going back, I think it also starts, especially if I look at the manufacturing sector, it starts from where the raw material itself comes and as you know, certain countries and certain products then get actually affected by that. But if I step back and look at it, I think this problem, as was earlier pointed out, is not new. I mean, we have had climate issues. We have had, I would call it lack of visibility issues, which has resulted in companies looking at this very differently than in the past. But if I look at it, where I think the future is going to be is how do we really integrate as deep as we can into the supply chain, into the last, I would call it, or the first service provider or the first product provider, and go all the way up. And the final point is, if I really look at manufacturing or even if I look at some of the service sectors which require aftermarket support, the biggest challenge people are facing today is predicting what's going to happen. So we are preparing so many scenarios that I think we are in a world of not just uncertainty, but also preparing for the unknown and the unknown. So I think that's where we are.
I think we keep hearing again and again that we need to diversify. Our supply chains are more diversified, supply chains at risk and more vulnerable when it comes to cybersecurity attacks, digital attacks. How are you assessing that?
I would say in a way, yes and yes. So more there is more risk if you do the things the wrong way or let's say you have more exposure, but it's also the opportunity to manage that in a much more efficient and real time world. Now people some people say it's new. It's not really new. This issue, what has been very clear is through Covid, we have suddenly realized how complex it was to get things on time at the right place. And and that that has started with, for example, the masks. People were not taking care of that because it was not something that we need every day, at least for most of the people. So suddenly, things that were invisible has become visible. And this means that there is a need to have a system where you have more than one solution to a problem. So fundamentally, you have many industries where you consider that you need to have dual sourcing. But the question is, is it a real dual sourcing or not? And fundamentally you need to understand the full supply chain and to understand what are the elements on the critical path. If, for example, you have the canal of Panama on one of the critical paths and on the other also, then you will not solve with having the dual source. And here you need to have new technology, including geo tracking with IoT, and to have something that is at the same time efficient and reliable, then you need to have something that is well secured. So yes, there is more risk, but this is allowing you to solve the problem in a way that is much more efficient. And maybe last point, 30 years, 40 years ago, people were solving the issue by having more inventories. But one of the issues with the acceleration of the new technology obsolescence is becoming something that you really need to care about. Then it's really important to have something that is just in time and with more than one path for success or avoiding that, you have a single point of failure.
So for Europe, Prime Minister, people have suggested that the supply chains are vulnerable. In fact, 75% of shipping companies in Europe saw disruptions over the last two years. How should Europe be looking at boosting its supply chains? What's needed right now that hasn't been done?
Well, probably a couple of things. I mean, first of all, I think the the ecosystems or the supply chains in itself should be, investigating where there, the weaknesses, because in I learned that a lot of companies actually don't know and the supply chain don't know. So they are overtaken by surprise because suddenly there is a lack of something that was so crucial that they were not aware that you have to, have other ways of, of getting these things. That's for a second. I think, we should think through, also geopolitical, where our dependencies are and make sure that, that we, at a certain cost, of course, but make sure that we are more autonomous. And third, I think we should, make sure that we really boost our economy, because that will probably help to get the revenues to to invest in it. And maybe as a fourth point, I think in the end, there's always a possibility that something goes wrong. And that's also why in the Netherlands but also in Europe. But I'm of course, I'm more aware of the Netherlands, that we have specific programs to address the people of the Netherlands to take care of themselves for, say, 72 hours. And I think that's important as well. I mean, people were laughing a little bit about it and not about war. I mean, it's also about war, but it's mainly because if energy goes down, we have a problem, that's for sure. If internet goes down, we have a big, big problem. So people should prepare for that. Not because they think it's going to happen today or tomorrow, but just to be prepared.
Interesting that you pointed the issue, of course. And you said at a certain cost, of course, redundancy and resilience are great until you get the bill, our companies prepared to pay the price for resilience.
So yes or no. First the if you look at it, when it becomes priority, when it is going to destroy the brand, or when it is going to completely disable the service, then obviously there is no price which the companies look at. But if I just then move to optimizing, or as somebody pointed out earlier, Andre pointed out in terms of the inventory management, etc., I think what we have been hearing across the board is anywhere between 3 to 7%, going up to a maximum of 10%. Companies are willing to absorb that cost, and in some cases, customers are also willing to pay for that cost. So as a data point, if you look at it, everybody or functionally, if you ask people, there will be obviously a strong focus on profitability and focus on optimizing the inventory and the supply chain. But in reality, everybody is preparing for the downside and the protection of it. And that is quite significant when it comes to value. The last point is, is it alternate planning? Is it having regionalization? Is it building in enough optionality? I think the way it's more and more going is people are not really looking at predicting, but actually creating that optionality, so that even if 2 or 3 get switched off, they always have a four. So earlier it was about, you know, dual sourcing, triple sourcing. Today I have actually heard many people speaking about regional sourcing, which means it could be as high as maybe 1012. But I think there is also one positive factor, which I want to stress here that is actually throwing up great opportunities for the midsize and smaller companies to play a significant role in the supply chain. So I think I see that as a positive.
How do you look at it? Howdy.
I agree with what everyone says, but the reality is today is that since Covid, you know, leaders have already started diversifying the supply chains. And not just that, the infrastructure infrastructure of supply chains is completely shifting. And you see the emergence of new logistics hubs, super centers, you know, trying to manage this new sort of evolution and transportation. And it's coming at the nexus of three things technology and AI, government spending when it comes to trade policy and industrial policy and energy. So when you think about AI. AI can actually boost trade anywhere between 180 to 300 billion annualized. So that's one element when you look at AI and not simply AI, but also technology in the system today, it speeds up. It speeds up from quote to cash. It drives productivity in some cases 40% productivity from quote to cash. You know, today we talk about visibility. Visibility used to be very difficult. Today 70% of tracking is online and visible. Instead of thinking about where is my stuff, you're trying to think about where does it go next? So the application of AI is improving supply chain, visibility and reliability. So that's one piece. The other piece is government spending. You have some countries that are putting in tariffs. If you look at sort of restrictive policies, they've grown 18,000, 18,000 times 18,000 new restrictive policies since 2020. At the same time, you have friendly countries, French are spending 2.1 trillion in terms of supply chain alignment. On the back of that, you have countries emerging. And the Gulf is a key example of these countries emerging as super hubs, where the reliability policy is clear, infrastructure is there. And then lastly is energy and the ability to have that capacity. With the advent of AI and technology in the requirements, you need to make sure you have infrastructure to feed that demand. As I mentioned, you know, Gulf is a perfect example, and countries have to have to strategically think about how do they operate along that nexus. From our perspective at agility, we focus on diversification. If I look at our operating businesses, we've diversified all around the world, and I think about digitization, we talk about supply chain platform called shipper freight, which is focused on technology and AI to enable small to medium sized enterprises, which, as you mentioned, you know, their demand for supply chain quoting globally has grown exponentially ever since Covid.
Andre, you are as weak as your weakest link when you consider that you are diversifying your supply chains even more now, how do you start thinking about boosting resilience against cybersecurity attacks? Digital issues.
First, elements that you have to take into account is what is the impact. In case you have a major issue. If it's just a few days of lost revenue, that's one thing. But if and that is where cybersecurity may be extremely important, if suddenly because you have done something wrong, you get no power at all. Imagine at all the consequences. If you think, especially during the summer, a city or a country that have just no more power. You have all the refrigerators, the freezers that are out. You have problems with hospitals, we have problems like that. And fundamentally, when you look at this question of the weakest link, you have to understand what are the consequences. And in a way, if by trying to save 1%, you create a risk that has a systemic risk implication on a society, that's something that you cannot afford and you can, you must at the end really differentiate what are the consequences if the things go wrong. Because sometimes if you are not able to supply, it's not a big deal. Sometimes it's a question that is really death or life. And so you need really not only to understand what are the elements in your supply chain. And that's using the advanced technology in terms of information, but also to understand what are the consequences on your client and your stakeholder if things go wrong. And if you don't do the two exercise, then you may get into big trouble. If you are not the one that will directly notice, at least the the client and or the state will then take action. Takes all the question of the banks that are considering as systemic too big to fail. That's a similar element. It's an element that it's not just looking at what's happened to them, what is happening to the rest of the society.
So build resilience. Prime Minister, can you encourage companies to build resilience without undermining competitiveness?
Yeah, I think so. At least I hope so. But I think the companies I mean, first of all, business continuity is has always been an issue for companies. So you can directly link to that issue. But that's a on a, on a company to company base. And we're talking here about supply chains and ecosystems, which is much more difficult. So, I think that business and government should work together on the vital infrastructures and see where the weakest parts are. And the cybersecurity is very, very important. I mean, it's not underestimate the possibility of attacks by criminals or state actors to intervene and to sabotage. And if they are and they are smart, so we have to make sure that we are as smart as them and make sure that companies and government have the base layers of cybersecurity and at the same time, on specific issues, they on top of that, they create something else that really, is helping the resilience of the supply chain or the ecosystem.
Andre.
I will just react to one point. We cannot just be as smart or a little bit smarter than the bad guys, because there is an asymmetry. And that is something that is extremely important to understand. If you need to ensure that something is secure, you need to do that 99.999%. And that is back to the weakest point in the link. If you as a bad guy, it's enough that you are successful once and preferably when it will create the maximum negative impact. So you will not do that during the time where everybody is out of and not doing something important. It's really trying to target the worst possible time in the day, in the year, in the month. And that is really this asymmetry that is important.
Just building on what they're both saying is the criticality of trade and supply chain. It's not simply making sure it comes on time or whether it's slowed down or not. Trade is so important. The WAF came out with an interesting study that said a 1% decline in global trade could potentially displace 11 million jobs. That's tangible impact to economies, to people every single day. And that's one thing that we really need to think about, you know, so ensuring supply chain is smooth, is accessible, is diversified. And there's no halt, I think is a really important factor, not simply from a logistics perspective, from an economic country perspective.
I think at this point in time, I think the Prime Minister has to leave us. Unfortunately.
Yes.
Yes, yes, commitment.
We're a little bit delayed on our agenda problem.
We thank you so much for your.
Thank you so much. And one last remark, I mean, and it's it's about risk management. It's not about excluding all the risk. I mean that's and so we have to and that's what I meant with smart. But I agree with you. We never outsmart, the real hacker. Yeah. Thank you, thank.
You, thank you.
If I can just add.
Una declaracion aqui. Yo creo en el problema. Q tenemos a tener es q normalmente. Nosotros vemos la calidad Como el punto mas de Como ya lo menciona. Pero si nosotros tenemos la cadena de suministro y tomando en cuenta con todos Los problemas vemos. UN beneficio significativo sobre todo yo siempre hablo de las empresas pequenas. Porque es normalmente son el mas devil. Entonces, asi tenemos Los temas de produccion de visibilidad y de seguridad. Yo creo q el diseno de la cadena de suministro es un factor de prioridad si deciamos tener una cadena suministro segura. Entonces la seguridad es algo diferente después el diseno on sea. Cual es el cual es la beneficio principal en esto. Bueno para me. UN elemento adicional Q tenemos q tomar en cuenta es.
He changing.
En un entorno geopolitica cambia. Nosotros tenemos todavia un riesgo adicional. Qué es tenedor de la tecnologia y sobre todo cuando necesitamos efectivamente? Tenemos tener toda la fase de monetaria la dimension de la seguridad. Si tenemos tecnologias pueden tocar Los temas de influencia geopolitica. Entonces tenemos un elemento aun mas tenemos q preocupar. Por lo tanto es importante efectivamente entender q todos estos riesgos. Estos riesgos de evaluacion es algo q. Necesitamos considerar este nuevo escenario y qué imagine hornos en el escenario en donde las cosas no salen Como la esperamos. Qué tenemos qué minimizar todo este impacto efectivamente. Yo creo en esta en este memento. Podemos invitar incluso a tenemos aqui nuestro.
He is on his way. Right. Maybe you can pick up on the trade off. The biggest trade off. You think so?
I think there are. I mean, obviously the cost trade off is something which everyone is clearly aware of. But I think the real challenge in my mind is when people are planning for the future. I mean, every company, every, entity starts looking at the next three years at least, if not ten years. And when people make big bets like moving into a country investing there, then how do they see the future? So I think that's what I meant by saying that the real trade off is in long term planning, vision, and actually trying to be agile in every minute as they go along. That's one. The second aspect is the, I would call it the geostrategic versus the domestic consumption issue. So if I am just picking an example of India, you have a huge domestic market, and therefore people are not going to be really walking away from just producing for the domestic market. But then when it comes to internationalizing that or globalizing that, that's the second trade off, which then people play with. So honestly, the way I look at it is that the more people focus on doing what is right for a particular region, for a particular geography, for a particular locality or place where they're going to be doing their business, then that makes for more resilient supply chains going forward, because I hope we won't be in a situation where every country is challenged or every, business model is challenged across the board.
I would agree with that. I'd say, you know, from a longer term perspective, making the bets and thinking about capital spending. That's where your biggest risk, you know, because you need to make capital spending for the next, you know, five years to invest for the capacity for the next 10 to 15 years. And the question becomes, where do I do that? What strategic. So that's one of the biggest, biggest risks. But at the same time it forces you to really think, okay, how do I place my bets strategically in a place in a location in certain hubs where I can maximize the elements to drive that resilience? So it's a cost benefit analysis.
And in terms of the determinants of those who adapt and those who get left behind, what would that be?
Oh, so in terms of those who get left behind are the ones who, unfortunately today, who paid the price are the small to medium sized enterprises, because getting access is a challenge which needs to be solved for. Yes, technology is in the process of solving for it, but it's not there yet. When you think about the end of the day, when trade slows down, who gets impacted in terms of, you know, losing their jobs again, it's the small to medium sized enterprises that get impacted. But I'd say most of all, out of this equation, when you think about the loss of jobs, it's more more than ever. Women are the ones who pay the price. So they're the ones who lose the job. When you think about technology small to medium sized enterprises, you think of some of the regions. Most of the small to medium enterprise businesses are led by women. When it comes to technology, all the manual sort of sort of documentation work is helped by women. So they're the ones that pay the biggest price.
Actually the ones in my view, company wise. First, if you look at it, the ones which get impacted are the ones which don't build what I would call agility and into the planning. They the companies which tend to look at every possible scenario and not wasting time on it using technology, using that visibility is something which I think will make a difference, which creates the impact. Normal challenges. Supply chain was never seen as an integral business requirement till maybe Covid came. So over the last 6 or 7 years, I think supply chain has become not C-suite but actually CEO suit, decision making, activity. And I have seen most large corporates, I mean, at least the ones we work with typically any issues actually go all the way up to the CEO of the company. Right. So stepping back, I think the impact will be felt on those who are not agile enough in their planning or who tend to think that what they did two years ago or one year ago could still be practical today. Everybody is waking up to the shocks of the geopolitical issues which we are facing today. But having said that, as I think Andre earlier pointed out, it is not that it has not happened in the past. We have had floods in particular market, or we have had a lack of shortage of materials in one country actually stopping production all over the world. So it's not like every time it seems as if we are. It's new, but it is maybe the old wine in a new bottle. So I think we have to be prepared for that is what I feel.
Andre.
One element that is pretty interesting is if you have an issue with your supply chain. The question is it are you the exception or is everyone in the same? Having the same problem? Take the example one more time. Covid was an extraordinarily interesting lab to understand how things can turn bad, because the probability, if you don't have Covid to need a mask is pretty low, then if your supplier will not give you satisfaction, you will have a plan B. The issue is that if suddenly something happened and something that is suddenly in very high demand, and then it's much more difficult to find a plan B than if you are the only one or a very limited number of actors have been affected by one problem of supply chain. And then what will make the difference are the company and the people that are flexible. If someone is able to change plan very quickly, he may get a real competitive advantage over people that are over. I would say rigid in the way they do things. And so the way company or entity has structure, how flexible they are will make a difference. And here we are back to information technology. Someone that is able to use information technology to get more flexibility will be able to get better results and more agility than the one that is just doing the things as he has done in the past.
We talked earlier about how supply chains are being driven by shifting alliances. As we talk about diversifying supply chains, how permanent are they? It is shifting alliances we've seen. I mean, just recently we had Mark Carney going to China, for instance, to secure his energy supplies trade between the two sides in China and Canada. I mean, how permanent are these shifts in supply chains under current circumstances, given the current picture?
I say, I mean, if you look at countries like Saudi Arabia and the UAE, Saudi Arabia are spending close to $270 billion in terms of logistics infrastructure. They're spending on the Saudi Landbridge. You have UAE, you know, from the top ten cargo handlers and investing in it, passenger airports and continuing to invest in it. These are hundreds of billions of dollars going into the Gulf, spending on infrastructure. Those are pretty big bets for longer term returns. So I'd say they're they're pretty permanent.
But sorry, no one element how to address that. I think personally we are living in a world that is less and less predictable. We see that there is incremental volatility that is here, at least for the next few years, to stay. Then what will make the difference is how modular is your architecture in terms of supply chain. If you are able to have blocks where you can replace some elements through different sourcing, then you have something that is more resilient. But I would not bet to say that things are forever.
Actually, in my view, I think it's just starting.
What is just starting.
The complete, what I would call change in the way in which supply chains are being perceived and handled. And you said diversification as to what is going to happen. So I think we are just sitting here and speaking because we are looking at the geopolitical and geostrategic angle. But I think there is significant, I would call it focus on, like I said, linking consumption and linking where efficiencies are cost of doing business is going to be lower. So if I look at the kind of investment which we are the Middle East is doing, that's because they are looking at it as reducing or increasing the ease of doing business. So I think that process, every country is competing with each other. And the more and more you see domestic consumption attracting investments, you are going to see further diversification taking place. The the day of having only maybe one country sourcing is gone, because that was a common belief for maybe about 7 to 10 years. That's change and change forever. So I think it's just a starting point of the journey. We should be prepared for it, at least for the next 3 to 5 years before it comes back to a new normal.
But the trend is Onshoring friend shoring because it is about trust in the end, right?
Yes, but the question is. What is today's reality? May be not the reality of tomorrow we found. So it's always very emotional if we talk about things that are just happening now. But take the difference of alliance between 1900 and 1940. Take what has happened between Japan, Russia, China. You have had very different alliances that have appeared, and it's important to consider that you need to have in your architecture something that is flexible enough. What is today considered as friends may become very different sometime from now.
But if we're investing billions of dollars into the supply chain, it's a huge amount to commit. It is very difficult to then pivot and move that supply chain. Isn't that true, Dinesh?
Yes, 100%. In fact, I would say that's why I said the journey has just started. Because once somebody takes, it's like a ship coming to a grinding halt and it is not going to come to a grinding halt unless it really has accident. So I think my view is it's people have to make up their mind. Today, 3 to 4 years later, you will actually see that significant shift taking place. And it's also very difficult considering raw material availability, etc., to shut off just for geostrategic reasons. So you will have to still continue to engage.
But don't forget, if it's a small problem, sometimes it's more difficult to solve it because you may be the only one to have the issue. If you have an element where a complete industry is depending from one specific geographic zone, then even with geopolitics, people will take care of it. Take for example the chip, take Taiwan, take Korea, and so on. It's known as being an element critical in the supply chain. And then government will try to make the necessary efforts to make that smooth. If you are the only one in a place where nobody cares, then you may be in much bigger trouble.
We have about a minute and a little bit. I just want final thoughts on how to make the global supply chain more resilient. If there is one, I guess measure or policy that countries or companies can adopt to ensure that resilience, what is what would that be?
Andre I will say consider a number of scenario plays, a different scenario and ensure that each scenario you have a solution that may cost you more than your plan A, but that you can still afford it.
Backup plans plan B okay.
I would say as a company, invest in technology. I think technology, not simply from a supply chain perspective, but from a people's perspective, productivity perspective. I think that's a bet. That is a, you know, it will permanently drive returns.
And is that something that we've seen from a lot of companies or countries?
I mean, from companies perspective, especially in the logistics sector, you're starting to see them double down, not simply in technology, but AI agents, AI agents to support in driving productivity enablement, being able to deal with surges, documentation surges. We were talking about, you know, the changes in tariffs when it comes to different products. It's able to digest that process at much faster than you were five years ago. So that's definitely a place where one should invest.
I will just finish by saying visibility, whether it is to the technology or better planning or better tools. But finally, visibility. If you have complete visibility all through your supply chain, I think that's what is going to make the difference.
The Nash Andre, thank you so much for your time today. Great perspective.
Thank you.