8 Supply Chain Risks For 2025
Supply chain risks have evolved beyond simple cost fluctuations and delivery delays. To help you digest these complex challenges, we've outlined 8 risks your business must prepare for in 2025.
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Supply chain risks have evolved beyond simple cost fluctuations and delivery delays. To help you digest these complex challenges, we've outlined 8 risks your business must prepare for in 2025.
Regulatory requirements continue to tighten across multiple industries in Australia, creating compliance challenges for businesses of all sizes.
Real Example: The Australian Treasury's new Corporate Emissions Reporting Standards, implemented in January 2025, now require businesses with revenues exceeding $25 million to conduct full Scope 3 emissions reporting across their entire supply chain.
Mitigation Strategy: Implement a digital compliance tracking system that automatically flags regulatory changes affecting your industry. For Australian businesses, leveraging the government's SME Regulatory Compliance Portal can provide industry-specific guidance and templates.
Many suppliers may present a stable front while concealing serious hidden financial vulnerabilities that could impact your company’s operations.
Real Example: In 2024, two companies that made up a major Queensland construction firm collapsed, leaving nearly 1000 creditors more than $80 million out of pocket.
Mitigation Strategy: Implement quarterly financial viability assessments on suppliers, from companies such as Fiable, across your supply chain. For critical components, maintain relationships with at least two financially-stable suppliers from different regions. Consider negotiating staggered payment terms that protect your business while supporting supplier cash flow.
International tensions continue to create unexpected disruptions for Australian supply chains dependent on global sourcing.
Real Example: The escalation of South China Sea tensions in 2024 are leading to a rise in significant shipping lane disruptions for businesses using this route.
Mitigation Strategy: Map your entire supply chain to identify geopolitical vulnerabilities. For Australian businesses, leverage Austrade's Supply Chain Resilience Initiative to identify domestic alternatives for critical imports. Consider nearshoring options in politically stable countries like New Zealand or Singapore, and develop scenario-based contingency plans for key geopolitical risks. Maintain higher inventory levels of components sourced from politically volatile regions.
Cybersecurity vulnerabilities in your supply chain can compromise your entire business operations and data security.
Real Example: In 2024, DP World Australia suffered a cyberattack that impacted several ports, with interruptions lasting weeks. DP World had to limit access to four of Australia's largest ports.
Mitigation Strategy: Require all suppliers to meet minimum cybersecurity standards based on the Australian Cyber Security Centre's Essential Eight framework. Implement regular third-party security audits for critical suppliers, and establish secure data sharing protocols that limit access to sensitive information.
Environmental, social, and governance standards are increasingly scrutinised, with supply chain practices under the spotlight.
Real Example: A 2024 survey by Herbert Smith Freeholds found that 54% of Australian businesses are behind the ESG curve.
Mitigation Strategy: Develop a comprehensive supplier code of conduct with clear ESG requirements, and implement a verification system that includes regular on-site audits and certification reviews.
Australia's unique geography and climate vulnerabilities create significant logistics challenges for businesses.
Real Example: The unprecedented flooding across Queensland and northern NSW in February 2025 severed major transport routes for over three weeks, with the Bruce Highway closure costing businesses an estimated $45 million daily in delayed shipments.
Mitigation Strategy: Develop regional inventory positioning strategies that account for Australia's climate vulnerabilities. Implement predictive logistics planning tools that incorporate weather forecasting data, and establish relationships with multiple logistics providers across different transport modes.
Depending too heavily on a single supplier or region creates dangerous vulnerability when disruptions occur.
Real Example: When major construction firm Probuild entered voluntary administration in February 2022 with debts over $14 million, it created a devastating ripple effect. Dozens of smaller subcontractors and suppliers who relied on Probuild for the majority of their business faced severe cash flow issues or collapsed.
Mitigation Strategy: Identify and map all single-source dependencies in your supply chain, prioritising those without ready alternatives. Consider ordering a financial viability assessment on critical counterparties to ensure they are financially stable to commit to certain projects.
Many businesses discover too late that their legal protections have significant gaps when supply chain disasters strike.
Mitigation Strategy: Work with legal experts specialising in Australian commercial law to conduct a comprehensive review of supplier contracts, focusing on force majeure clauses, performance guarantees, and liability limitations. Ensure your business interruption insurance explicitly covers supplier failures and has appropriate coverage limits. Consider implementing parametric insurance that provides automatic payouts based on predefined trigger events rather than assessed losses.
Businesses that will thrive in the coming years will be those that treat supply chain risk management as a strategic priority rather than an afterthought. This means conducting regular financial viability assessments from providers such as Fiable, strengthening supplier contracts, diversifying sourcing strategies, and leveraging technology to gain supply chain visibility.
Is your business ready for these challenges? For a deeper analysis of your contractor’s financials, Fiable is your go-to premium financial viability solution. We provide financial assessments within 1-2 business days and a range of tools and support for solid financial risk management.
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