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Category: Global Events

It’s That Time of Year Again: US Government Releases New Restrictions List

Posted on by Lexi Sydow

Authors: Andrea Little Limbago, PhD, SVP, Applied AI and Mackenzie Clark, Senior Computational Social Scientist 

Annual Tradition: End of Year Sanctions and Restrictions 

Last week’s release of UFLPA and OFAC restrictions follows a recent trend where widespread export controls are released en masse prior to the new year.  

For instance, in December 2023, the Departments of Treasury and State issued sweeping sanctions targeting Russia’s energy production and export capacity. This was followed a few weeks later by an Executive Order (E.O. 14114) that issued another round of sanctions against financial institutions supporting Russia’s military-industrial base. It was also preceded by two different rounds of Russia-related sanctions on December 1 and November 16. 

Similarly, in December 2022, Treasury issued several sanctions targeting Russia’s financial sector, very much in alignment with those issued last Thursday. This continued the trend from December 2021, when Treasury issued distinct sanctions targeting Belarus and entities associated with human rights abuses.  

The UFLPA also made some end of year additions in 2023, although those were much fewer than the 29 companies added last week, which increased the overall entity list to over 100 Chinese companies connected to forced labor.  

We recently covered two of the latest additions and the potential impact it could reap on global steel and aspartame (a sugar substitute) supply chains (spoiler: tens of millions of companies could be impacted).  

If the past week is any indication of what is to come, organizations should expect more restrictions to follow the path of the recent updates focused on Russian financial institutions and human rights abuses.  

 

The following analysis will answer:  

  • How far do the OFAC and UFLPA-sanctioned companies reach globally?  
  • Which industries are most at risk for potential future sanctions?  
  • How do you react to these and prepare for future sanctions?  

The Latest Round of OFAC Restrictions on Banks and Financial Services in Russia: Who is Impacted? 

The latest sanctions announcements from the United States Department of the Treasury and Department of Homeland Security target a wide array of companies in Russia and China. The extended impact of these restrictions, however, have the potential to cascade to companies across the globe. 

On November 21, the addition of Gazprombank — and almost 100 other international subsidiaries and affiliates — to OFAC’s Specially Designated Nationals (SDN) List marked the designation of “Russia’s largest remaining non-designated bank.”  

With Russia’s largest financial institutions sanctioned by not only the United States, but other major countries such as Canada and the United Kingdom, it is important to understand where the risk of exposure to these sanctioned banks may still exist. 

Using Interos data, we analyzed the extended supply chains of Gazprombank, VTB Bank, and Sberbank and identified over 7,500 companies across three tiers of supplier relationships that are either directly or indirectly supplied by one of the banks.  

These numbers are relatively low compared to other supply chain propagation, likely due to decreasing integration of Russian banks with the Western economies since the invasion of Ukraine.  

Nevertheless, the scale is by no means trivial and indicates the stickiness of these relationships. 

Of the potentially exposed companies with supplier-buyer relationships linked to the new sanctioned entities, almost 60% of them are located either in the United States or the United Kingdom.  

When leveraging Interos’ Industry Categories designations, we identified the top three sectors represented across the sanctioned companies as Software and IT Services, Banking and Financial Services, and Business Management Services.  

29 Million Companies Could Face Fines from UFLPA Entity List Additions: Agricultural Products, Metals, and Polysilicon in China  

Just one day after the new restrictions targeting the Russian banking industry, 29 new companies were added to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, bringing the total number of companies on the list to over 100.  

This action primarily targeted companies that produce agricultural goods, specifically tomato paste and tomato products, walnuts, red dates and raisins. Other newly restricted companies include exporters of materials and products derived from aluminum, nonferrous metals, and polysilicon. 

Interos conducted an analysis on the extended supply chain of these companies and identified over 29 million companies across three tiers of supplier relationships that are either directly or indirectly supplied by one of the newly restricted UFLPA entities.  

These companies could be subject to UFLPA fines.  

Again, most of the companies that could be impacted — over 34% of them — are located in the United States, followed by the United Kingdom (9%), India (8%), Germany (4%), and Italy (3%) – and thus could be subject to UFLPA fines. 

Leveraging Interos’s Industry Categories reveal the top three sectors among this group of exposed companies include Business Management Services, Software and IT Services, and Consumer Goods.  

These two scenarios, while distinct, highlight the importance of continuously monitoring suppliers of both services and physical goods to avoid potential fines, seizure of imports and reputational damage.  

Which Industries are Most at Risk Looking Ahead? 

Given the ongoing implementation of export controls and industrial policy, organizations should plan for future additions to these and dozens of other restrictions lists. Fortunately, there are a few insights to help look ahead and begin de-risking from future regulatory risks. 

For instance, in September, the Department of Commerce’s Bureau of Industry and Security (BIS) introduced worldwide export controls on critical technologies.  

These include: additive manufacturing items, advanced semiconductor manufacturing equipment, quantum computing items, and gate all-around field-effect transistor (GAAFET) technology.  

A presumption of denial affects countries deemed a national security concern, including Armenia, Belarus, Cuba, Iraq, North Korea and Russia.  

Companies in these industries, as well as other critical and emerging technology industries, and from those countries are at immediate regulatory risk. 

Similarly, BIS also has a high priority list focused on Russian products believed to fuel Russia’s military-industrial complex.  

Companies associated with these products, as well as those across a wide range of critical technologies, are much more likely to appear on a restrictions list in the future than those in other product or industry categories. 

Monitoring Risk Exposure with Risk Intelligence Data 

Geography is another means for assessing future restrictions risk.  

In addition to companies in those countries, the BIS Country Groups D and E, companies located in – or have a supply chain connection to – the XUAR are also at significantly greater risk of future restrictions inclusion.  

Using Interos data, we identified over 231,000 other companies located in XUAR that may pose future compliance risks in global supply chains.  

When analyzing three tiers of supplier relationships for these companies, Interos data shows the following industries at the highest risk for potential disruptions if restrictions on XUAR companies continue to expand.  

These are the industries with the greatest frequency across companies in XUAR:  

  1. Business Management Services  
  2. Software and IT Services 
  3. Consumer Goods 
  4. Architectural, Engineering, and Design Services 
  5. Building and Civil Engineering Construction  

In short, last week’s additions to the OFAC and UFLPA restrictions lists are consistent with regulatory updates from the past few years.  

Moreover, by leveraging industry, product, and geographic risk management information, organizations can be more proactive in preparing for export controls against companies that meet those criteria listed above.  

Product and industry categories not only provide value for proactively addressing restrictions risk, but also have several other benefits, such as benchmarking and product tracing throughout supply chains.  

Keep an eye out for a forthcoming blog that will detail these new features and how they impact the full lifecycle of supply chain intelligence. 

Have questions today?  Speak to an Expert.  

New Additions to UFLPA Entity List Show Forced Labor in Supply Chains of 79,000 Companies

Posted on by Interos

Authors: Andrea Little Limgbago, PhD and Mackenzie Clark 

Steel and Aspartame Companies Join UFLPA Entity List 

Last week, the U.S. Department of Homeland Security announced two new additions to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. Although the law has been in effect for several years, it marks the first inclusion of a steel or aspartame company on the UFLPA Entity List.  

This reflects the expansion of the UFLPA since its inception, as well as the growing concern and risks associated with forced labor in the supply chain.  

Interos has been closely monitoring the UFLPA since it came into effect, along with dozens of other critical sanctions and prohibitions lists and helps illuminate connections to these companies deep within complex supply chains. 

Cracking Down on Forced Labor in Supply Chains 

The UFLPA aims to eliminate forced labor from supply chains through the prohibition on the importation of goods made in part or entirely from forced labor. The law specifically focuses on the Xinjiang Uyghur Autonomous Region of China, but it also applies to all forced labor in all of China. A review of these companies highlights how important it is to maintain visibility across the entire supply chain ecosystem, as small relationships grow exponentially as you move to the outer tiers of a supply chain.  

Two Companies Identified Puts 79,000 Companies at Risk

The two new additions to the UFLPA Entity List are Baowu Group Xinjiang Bayi Iron and Steel Co. Ltd and Changzhou Guanghui Food Ingredients Co. Ltd.  

According to Interos data, these two companies directly supply over one hundred companies (Tier 1), who in turn supply almost 2,500 companies (Tier 2). Those companies, in turn, supply approximately 79,000 companies, and represent almost 280,000 distinct buyer-supplier relationships (Tier 3). 

Importantly, the UFLPA not only consists of an Entity List, but also prioritizes seven industries for enforcement:  

  1. Apparel 
  2. Cotton and cotton products 
  3. Silica-based products 
  4. Tomatoes and downstream products 
  5. Polyvinyl chloride (PVC) 
  6. Aluminum 
  7. Seafood 

The last three industries were added earlier this summer and represent the first new addition of key sectors since 2022.  

With last week’s inclusion of steel and aspartame companies on the UFLPA Entity List, we should prepare for the potential expansion of those key industries in the near future.  

What Would that Impact Look Like on the Chinese Steel and Aspartame Industries?  

Interos data highlights the widespread impact of the Chinese steel industry. There are over 66,000 companies in China that sell steel or steel products. Globally, over 655,000 unique companies buy from those companies (Tier 1), a number that grows to over 2.6 million companies when looking at the buyers from those companies (Tier 2).  

These numbers pale in comparison to the number of buyer-supplier relationships stemming from those 66,000 companies in China that sell steel or steel products. There are 4.4 million relationships stemming from those companies (Tier 1), which balloons out to over 23 million relationships one hop out (Tier 2), and almost 64 million relationships to the next level of the supply chain (Tier 3). Across these tiers, over a third of the companies are located in the United States, followed by India, the United Kingdom, Germany, and France. 

A similar ripple effect appears when looking at producers of aspartame and aspartame-containing products. There are almost 3,000 companies in China that produce aspartame and aspartame-containing products. The impact balloons to over 200,000 companies that buy from those companies (Tier 1), and over two million companies that buy from those 200,000 companies (Tier 2). 

We again see the number of unique buyer-supplier relationships exponentially increase across the companies that sell aspartame and aspartame-containing products. Globally, there are over 500,000 buyer-supplier relationships linked to those companies in China (Tier 1). Those, in turn, are connected to almost 12 million distinct relationships (Tier 2), which explodes to over 60 million relationships at the next tier (Tier 3).  

Again, over a third of the companies are in the United States, highlighting a potential significant risk if the UFLPA expands to include either of these industries as a key sector for investigation. 

Not Just the US: Global Supply Chain Examination is a New Reality 

The United States is not alone in sanctioning human rights violators within supply chains. The European Union, United Kingdom, and Canada, along with the United States, all initially coordinated sanctions in 2021. As Homeland Security Secretary Alejandro Mayorkas explained, “The UFLPA is catalyzing American businesses to fully examine and assess their supply chains….” The same is true elsewhere, as earlier this year the European Parliament adopted a new law aimed at eliminating all forced labor, not just from China, in the supply chain. 

In return, China is taking steps toward enforcing its own law introduced four years ago that creates an ‘Unreliable Entity List’ for companies evading the Xinjiang Uyghur Autonomous Region and exhibiting discriminatory measures against products made there. This puts companies in a dilemma of conflicting regulatory practices between China and the United States, European Union, and other Western democracies. 

Major Regulatory and Financial Risks at Stake 

Aside from the regulatory and reputational implications, there also are growing financial risks. Almost $3.6 billion worth of goods have been seized under UFLPA enforcement, highlighting the financial as well as reputational and humanitarian risks at stake.  

At Interos, we continue to monitor the regulatory landscape, as well as those industries and companies associated with key sectors or products at risk. Flagging the UFLPA alone is not enough to minimize human rights violations within the supply chain. 

Identification is Not Enough: Compliance Requires a Regional View and Cross-Examination of Human-Rights Violation Lists 

 In addition to the UFLPA, Interos also denotes any company located within the Xinjiang Uyghur Autonomous Region, since the UFLPA specifies the additional scrutiny applied to any goods stemming from that region, whether they are on the Entity List or not.  

Moreover, Interos also specifically flags whether a company is on a human rights-related violations list because other restrictions, such as the Global Magnistky Act, address human rights violations and must be integrated into a broader strategy of eliminating human rights violations from the supply chain and addressing the associated regulatory and reputational risks. 

Take Action:  Root Out Forced Labor from Your Extended Supply Chain 

Interos’ continuous monitoring alerts quickly identify the potential impact of additions to new restricted entities lists across their extended supply chain. This visibility empowers companies to get ahead of potential violations both upstream and downstream in their supply chain. 

To identify if you are at risk of using a restricted entity, speak to an expert today.  

 

Midnight Deadline Approaches for ILA Labor Negotiations

Posted on by Interos

The International Longshoremen’s Association (ILA) negotiations loom large as the countdown to midnight marches on. In 2023, the US imported $3.83 Trillion of products. This is more than 25x the size of imports ($151 billion) in 1977 – the last time we saw a full ILA strike commenced.   

Interos data showed direct impacts at top ports could be far-reaching with over 200,000 domestic companies at risk from direct missed imports.  

However, additional analysis from Interos indicates the scale dramatically increases when you look at the extended supply chain outside of top ports. 

ILA Strike: Devastating Consequences Beyond Direct Radius of Impact  

Additional analysis highlights the staggering impact of a strike across extended supply chains. Over 2.2 million companies are supplied by at least one of the companies that import commodities directly from any port facility heading for a strike.  

When extending our analysis to encompass the potential ripple effects of the strike, Interos data reveals over 3.7 million companies that, in turn, have trade relationships with those companies, and an additional 4 million companies one more tier out.

When looking at these three tiers in addition to the direct importers, over 11 million companies will be impacted, representing over 152 million unique relationships, and all their suppliers across the globe. 

In fact, globally, the countries with the most companies impacted by a strike will be the United States, India, United Kingdom, Germany, and Italy.  

Real-Time Monitoring of Extended Supply Chain Impacts 

These insights have been added in real time, and Interos will continue to closely watch these and all supply chain events as they unfold. 

Interos has created the world’s largest supply chain database, dynamically powered by AI, with over 11 billion relationships of more than 400 million businesses – to help companies manage supply chain risk in real time.  

To keep on top of potential supply chain disruptions, especially those from your indirect, extended supply chain relationships, speak to an expert today.  

Impending ILA Strike Threatens Economic Normalization

Posted on by Corey Ray

Author: Corey Ray, Senior Manager, Operational Resilience 

 

This summer, Interos alerted customers to the threat of labor strikes by various global unions that posed risk to the international movement of goods. These risks included actions by Canada’s freight rail workers, Canadian border services officers, and Indian port workers. Although more minor in scale, as of publication grain terminal workers at the Port of Vancouver are currently striking in an action that hinders agricultural exports while Boeing workers at U.S. West Coast factories remain on strike. 

We are now less than two days away from a far more significant disruption to the flow of global trade as reports suggest negotiations to prevent a strike on October 1st by the International Longshoremen’s Association (ILA) at East and Gulf Coast ports are unlikely to break the impasse.

Adding to the poor outlook for averting a shutdown of ports, Biden administration officials have yet to employ powers under the 1947 Taft-Harley Act to force workers to remain on the job during arbitration despite growing calls to exercise executive authority.  

The disruption would be far-reaching in scope as the ILA represents workers at major ports including the Ports of New York, New Jersey, Savannah, Houston, Charleston and Miami that combined account for 40% of goods shipped to and from the U.S.  

ILA Strike: A Magnitude Unknown 

There is little precedent for an ILA action of this magnitude. The last full strike by the union was in 1977, before the era of globalization when the U.S. imported only $151 billion in goods annually. That figure pales in comparison to the $345.4 billion imported in July of this year alone. Despite an 11-day port lockout in 2002 and ILA strike threats more recently, the impact of a shutdown of East and Gulf coast ports does not have a complete historical analogue that can guide businesses, especially if the strike persists for weeks.   

Global Implications of the ILA Strike 

According to Interos data, there are over 67 million trade records at the top ports alone, impacting more than 200,000 domestic companies that would be at risk of disruption from missed imports. These, in turn, are sourcing from approximately 74,000 foreign suppliers providing more than 5,684 different product types. The scope of impact is broad and would leave very few sectors of the economy untouched. 

Interos data further identifies more than 1,300 industries at risk of disruption due to sourcing goods through potentially impacted ports. The top 10 industries are highlighted below.  

The manufacturing sector would be disproportionately affected and at risk of cost pressures, just as prices for domestic producers have finally cooled from inflationary pressures.  


Consumer Retail Goods to Be at Risk Ahead of Holiday Shopping Surge

Leveraging proprietary Interos product category data, the table below highlights the top 10 most common product categories received by US entities specifically through the impacted ports on the U.S. East and Gulf Coast in the last five years. This data is also specific to goods imported in the month of October to reflect potential seasonality in impacted goods during an October 2024 ILA Strike. October also often sees a surge of imports ahead of the holiday shopping season. 

Overall impact is concentrated on consumer retail, medical supplies, automotive, and unfinished manufacturing goods. 

Note “NOS” stands for Not Otherwise Specified and is used across product category taxonomies. 

Threat to Economic Normalization: 

Global trade, and the post-Covid economic recovery, are already under threat from both trade wars and kinetic wars on multiple continents.  Additional threats to global trade range from Houthi attacks on shipping in the Red Sea to drought-induced reductions on Panama Canal shipping traffic.  

Within that context, the potential strike comes at a time in which global trade is under strain and thus puts a brief period of economic normalization at risk as U.S. inflation cools.  

Port shutdowns would represent a classic supply-side shock to the economy, raising costs as the Federal Reserve is actively shifting away from its anti-inflation fight.  

Businesses should expect price increases on impacted goods and extended lead times.  

Meanwhile, congestion and cost increases should be expected on alternate shipping methods such as air freight and West Coast ports.  

If the strike persists for days or weeks, upstream supply chains will come under strain including Chinese exports, which already face additional catastrophic risk from Typhoon Bebinca.  

The impact of the ILA strikes will be far-reaching. It is vital businesses have a plan in place and the ability to monitor if any of their direct or indirect suppliers stand to be affected. Anticipation and speed are the key to averting a costly disruption.  

Get Ahead of Future Labor Strikes with Interos: 

Interos’ continuous monitoring alerts quickly identify the potential impact of disruptions across their extended supply chain. This visibility empowers companies to get ahead of potential disruptions both upstream and downstream in their supply chain.  

For example, Interos users were alerted to previous trade disruptions such as the recent Red Sea attacks as well as cascading global factory disruptions impacting everything from German chemical facilities to European automotive plants at Tesla, Suzuki and Volvo. 

For a more detailed analysis of the potential impact of recent labor strikes, such as those in Canada and India, download our report below, or speak to an expert today.  

EU Deforestation Regulation Approaching: Fines for Non-Compliance are Steep

Posted on by Interos

Author: Julia Hazel, PhD, Lead Computational Climate Scientist and Nicolas de Zamaroczy, PhD, Lead Computational Social Scientist

Companies can no longer ignore the urgency to reduce their deforestation impact- especially if they want to continue doing business in the European Union.   

Update on Nov 14, 2024:

As of November 14, 2024 the European voted to postpone the EU Deforestation Regulation (EUDR) compliance deadline by 12 months to December 30, 2025. Companies must certify that their supply chains are free of companies linked to deforestation or risk significant fines. Similar to the EU’s General Data Protection Regulation (GDPR), this law is not limited to EU companies, but rather to any companies doing business within the EU. 

The postponement gives companies a chance to get in front of the upcoming regulations. The extension does not remove the need to act swiftly but rather allows companies runway to get it right in the face of rising global legislation such as Australia’s Mandatory Climate-Related Financial Disclosures.

Unfortunately, despite numerous global treaties and corporate attestation supporting deforestation-free supply chains over the past decade, deforestation rates have not fallen.  

Too often corporate disclosures are aspirational and lack the visibility required to identify potential supply chain linkages to deforested locations and commodities.  

The EUDR is arguably the first major global initiative requiring corporate accountability for any connections to deforestation. With other similar regulations proposed or under review, this new regulatory risk shows no signs of retreating and will require companies to quickly gain that visibility or risk significant financial and reputational damage. 

What is the EU Deforestation Regulation? 

The EUDR has three main goals:  

  1. to prevent deforestation 
  2. to cut greenhouse gas emissions, and  
  3. to prevent further agricultural expansion and biodiversity loss.   

The EUDR regulation stipulates that any operator or trader of seven large key commodities – palm oil, cocoa, cattle, coffee, timber, soy, and rubber – as well as their derived products, must provide evidence that these commodities and products did not originate from recently deforested regions or contribute to forest degradation.   

Additionally, operators and traders must certify that their products comply with all relevant laws of the source country, including labor, anti-discrimination, indigenous rights, and pollution regulations.   

Failure to comply could result in: 

  • fines of up to 4% of a company’s revenue in an EU member state 
  • criminal charges, and  
  • reputational damage 

Beyond Direct Commodities: Far-Reaching Impact Throughout the Supply Chain 

The goal of the EUDR is to limit demand for products grown in recently deforested areas, thereby reducing a primary incentive for forest loss.  Scientists agree that deforestation is a major cause of climate change, with tropical deforestation accounting for roughly 20% of annual Greenhouse Gas (GHG) emissions worldwide.   

One of the primary reasons forests are cleared is for agricultural expansion, and the seven key products targeted by the EUDR were chosen based on scientific evidence linking their production to logging activity and illegal deforestation.   

While stipulations involving sourcing these commodities directly impact the food and agriculture industries, their derived products involve a wide array of industries.  For example, most lumber and natural rubber by-products will be included in the legislation, affecting everything from office furniture to rubber gaskets and from cardboard to air bags.  Textiles, automobiles, finance, fuel and energy represent just a handful of the industries that would be impacted by deforestation regulations.   

Moving Beyond the Say-Do Gap 

The EUDR is a landmark regulation that requires action beyond corporate disclosures and zero-deforestation commitments.  Zero deforestation commitments are a crucial part of corporate governance around deforestation, and 60% of corporations with the largest exposure to deforestation have set at least one policy on deforestation.  However, while zero-deforestation commitments represent a good step towards addressing corporate deforestation risks, their success in mitigating large-scale deforestation has been minimal.   

These commitments often lack immediate or near-term deadlines, clear implementation plans, and traceability to indirect suppliers, to name a few drawbacks.  Global Canopy’s Forest 500’s most recent report, which lists and ranks the policies and performance of 350 companies and financial institutions with greatest exposure to deforestation risk, reveals that two-thirds of companies with commitments are not publishing evidence of their implementation. This underscores the fact that policies and commitments are only useful if they are implemented and achieve results.   

More Than Just a “Box-Ticking Exercise” 

The EUDR underscores the fact that addressing deforestation at the corporate level is complex and requires a data-driven, multi-faceted approach. As PWC reports, “EUDR Compliance is much more than a box-ticking exercise” and “regulatory scrutiny will be intense.”   

One crucial component surrounds supply chain transparency and traceability.  To properly perform due diligence, companies must have insight into their direct and indirect suppliers to track products back to their origin, which allows for the identification of potential risks.  

Products need to be mapped to their source plot of land using precise geospatial information, such as in the form of satellite and remote sensing data, to ensure deforestation did not occur in the recent past where at-risk commodities were sourced.  

The country of origin is also significant as certain countries are higher risk for producing goods sourced from deforested areas.   These diverse pieces of information are necessary and provide actionable insights for corporations to mitigate deforestation risks. 

Beyond the EUDR – US Deforestation Due Diligence on the Horizon 

Corporate supply-chain due diligence will become commonplace as regulations such as the EUDR become the norm.

For instance, similar legislation to the EUDR is being proposed in the US with the Fostering Overseas Rule of Law and Environmentally Sound Trade (FOREST) Act, which would prohibit the import of palm oil, soya, beef, cocoa and rubber products linked to illegal deforestation.  

With the December compliance deadline fast approaching, corporations must act swiftly to invest in solutions that give them insight into their supply chain to mitigate risks and remain compliant.  

Interos is ahead of the game in mapping deforestation risks throughout the entire supply chain. Speak to an  expert today.  

Hezbollah Device Explosions: A Stuxnet Moment for Supply Chain

Posted on by Andrea Little Limbago

Author: Dr. Andrea Little Limbago 

An Inflection Point

Almost six years ago, Bloomberg published a report on Chinese government infiltration of 30 US companies through the technology supply chain. This report was highly controversial within the cybersecurity community and remains openly disputed regarding the validity of inserted ‘spy chips’. Since then, there has been less focus on infiltrated technology supply chains, as the pandemic and trade wars shifted attention away from espionage and toward more traditional industrial policy and risky businesses within the supply chain ecosystem. 

On September 17 and 18, 2024, infiltrated pagers and walkie talkies exploded across Lebanon, escalating the decades-long conflict between Israel and Hezbollah. While investigations remain ongoing, reports point to Israel infiltrating a complex supply chain of devices sold in Hungary, and authorized to sell on behalf of a Taiwanese company, Gold Apollo. While the company sold devices to the broader population, those sold to Hezbollah contained the explosive PETN. As more information becomes available, a picture will likely unfold of complexity and extremely targeted backdoor infiltration of a technology supply chain.  

This past week’s attacks in Lebanon are an inflection point, expanding technology supply chain risks toward supply chain sabotage, and shifting all rules of engagement in supply chain security and modern warfare. Whether or not ‘spy chips’ occurred in the past, given the shift in norms, a line has been crossed, rendering technology supply chain infiltration a growing supply chain security risk in a tenuous geopolitical environment. 

New Rules of Engagement in Modern Warfare 

The supply chain infiltration behind the attacks is on such a distinct scale and scope, it is reminiscent of the turning point from the Stuxnet cyber attacks, described as the world’s first digital weapon. In 2010, reports surfaced that several zero days exploits simultaneously sabotaged Iranian nuclear enrichment facilities. Most research identifies U.S. and Israeli intelligence as the creators of the exploits, which weren’t widely noticed until they spread beyond the Natanz facility.  

Viewed as the first digital weapon to cause physical damage, it shifted all cyber norms and rules of engagement and opened Pandora’s Box to the modern cyber threat landscape. From the 2012 Saudi Aramco attacks where wiper malware destroyed over 35,000 computers to Russia’s BlackEnergy cyber attacks on the Ukrainian energy grid in 2015 and 2016 to Saudi Aramco to Iran’s failed penetration of New York’s Rye dam, physical infrastructure by cyber attacks is no longer unexpected or unprecedented. In fact, earlier this year FBI director Christopher Wray detailed how China is burrowed deeply within US infrastructure.  

The Tipping Point for Security Risk 

In a similar manner, just as Stuxnet upended the norms of cyber behavior and physical destruction, the explosive devices used against Hezbollah will upend all norms behind supply chain infiltration and destructive effects. There already has been a growing national and economic security concern over risky businesses within the supply chain ecosystem. Since 2016, the US has added thousands of companies to a range of sanctions lists, many of which are deemed national security risks.  

Five years ago, the Pentagon blocked military from purchasing phones made by Huawei and ZTE due to national security risks. This has been a growing trend across the globe, as India blocked Chinese apps, China blocked Kaspersky and Semantic, Australia removed Chinese security cameras and so on. These have often been coined backdoor risks, as companies legally enter a supply chain ecosystem without any need for obfuscation. 

These have generally focused on software, not hardware, backdoors into systems. Last week, we may have witnessed the tipping point for hardware backdoor supply chain security risk based on the insertion of illegal or unknown physical parts. While distinct in its execution, there has been growing concern over the security of the hardware supply chain. 

The US CHIPS and Science, in part, targets this risk by incentivizing the manufacturing of semiconductors domestically. Nevertheless, the exploding devices manifest the real-world impact when foundational technologies are used as Trojan horses to carry out military objectives. As we have seen with Stuxnet, once that Pandora’s box is opened, it is a game-changer in the risk landscape and global norms. 

How Can Companies Protect Themselves in this New Norm? 

To prepare for yet another significant disruption shaping the new normal, there are several steps organizations can take.  

First, foundational risk approaches still hold true but require even greater diligence. Perfunctory risk processes are inadequate for this risk landscape. Know your supplier (KYS) takes on even greater importance, not just within direct suppliers but across the entire supply chain ecosystem. This, in turn, requires augmented visibility across your supply chain, a difficult feat due to the hyperspecialized and complex supply chains built over the last few decades where geopolitics was not taken into account. 

Gaining that visibility is just the start, additional context is required. For instance, are any of the thousands of restricted companies present several tiers within your supply chain? In many cases, these companies have already been linked to data exfiltration, it is not a great leap to consider hardware infiltration from these same technology companies.  According to Interos data, 148 (~30%) S&P 500 companies have a direct supplier relationship with a banned company, risking severe civil and criminal penalties, 19% of which are in the Computer and Electronic Product Manufacturing industry.  Beyond these direct (tier-1) suppliers, virtually every S&P 500 company has sub-tier (tier-2, tier-3 and beyond) supplier relationships with at least one at-risk or restricted company.  

This has always posed a regulatory risk, but the national and economic security risks must also feature in supply chain security risk assessments. While last week’s attacks were not via a restricted company, those technology companies on restricted lists represent a more probable pathway to hardware infiltration and warrant heightened alert. 

Tracking the latest in restricted companies is difficult as there is no single consolidated list across all U.S. and international organizations. Fortunately, Interos simplifies this process by surfacing several dozen restrictions lists across the US, Five Eyes, and international governmental organizations, extended across the entire supply chain ecosystem. These companies, especially those in technology, are at the highest risk of technology supply chain infiltration. These companies do not only pose a regulatory risk but could also interdict data or sabotage on behalf of adversaries. 

The stark reality of this new era is that the geopolitical risk stems much broader than restrictions – companies and governments need visibility into all areas of supply chain risk: financial, cyber, ESG, geopolitical and catastrophic risk.

In short, the globalized era of entangled supply chains absent geopolitical considerations is over. 

Supply Chain Security: Time to Double Down 

Almost a decade ago, the fictional political thriller Ghost Fleet imagined a future war beginning with supply chain infiltration. In this futuristic scenario, China hacks the U.S. electronics supply chain, disrupting everything from navigation systems to fighter jets. The digital revolution – or the fourth industrial revolution – continues to shorten the time frame between futuristic scenarios and modern reality.  

As Stuxnet demonstrated almost fifteen years ago, the shifting cyber attack landscape quickly expanded beyond governments and into the public sector. The device explosions in Lebanon similarly crossed a new line and will accelerate the pace at which the technology supply chain is exploited by government and non-government actors alike. Whether the Bloomberg report proves valid or not, the supply chain infiltration of the devices introduces similar supply chain security risks – it’s no longer a matter of if, but when a technology supply chain infiltration will occur again.  

Just as software backdoors have increased in prevalence, the same may soon be true of hardware backdoors, making it all the more critical for a fresh look and reprioritization of supply chain security. 

We are here to help. Speak to a risk intelligence expert today.  

 

The Latest Supply Chain Shockwave: Labor Strikes Loom in Canada and India 

Posted on by Interos

Report Authors: Mackenzie Clark, Andrea Little Limbago, and Caralyn Welliver.

In 2023, labor strike activity increased 280%, with last summer referred to as the ‘Summer of Strikes’ due to the spike in labor activity. This trend seems to persist into 2024. Last Thursday, two of Canada’s major railways briefly shutdown, with a lockout that could have cost hundreds of millions of dollars. A forced arbitration has trains running again, but it is unclear how long that will last. At the same time, Indian port workers are threatening a strike starting tomorrow, August 28th, with negotiations scheduled for today.  

Significant and simultaneous strikes at two of the top ten largest economies in the world would cause significant supply chain disruption at a time when they are already undergoing significant transformation. Geopolitically driven export controls are reshaping supply chains, while political instability in the Red Sea has forced new risk assessments and rerouting at the same time as the Panama Canal drought has created bottlenecks and restrictions. The addition of labor strikes in two major economies has been compared to an ‘earthquake’ disruption to the US economy. Of course, not all disruptions are created equally, and each has a unique impact on companies and the global economy. Below is a short overview of the potential impact of these labor strikes. 

Canadian Rail Strikes: Potential for Significant Disruption to US Supply Chains  

Prior to the binding arbitration, the short-lived rail labor strike shut down 75% of Canadian railways and had the potential to impose costs exceeding $251 million dollars per day, by one estimate. This would be a blow to Canada’s economy, but also would have global impact. Within the US-Mexico-Canada agreement area alone, these strikes threaten to upend the free trade region at a time when these countries work to reduce reliance on geopolitically risky exporters of vehicles and vehicle parts and semiconductors and electronic components. 

These key industries are at risk if a strike occurs. While petroleum makes up the largest portion of Canada’s exports, companies in the United States and Mexico also import many goods from Canadian suppliers. Since 2023, Interos’ data shows that the top Canadian commodities imported by companies in the U.S. and Mexico include: 

Interos | Commodities and Products at Risk by Canadian Labor Strikes

From 2023 to present, Interos‘ data shows that over 74,000 companies in the United States and Mexico have been directly supplied by a Canadian company. In the US and Mexico, customers of Canadian suppliers are concentrated in the following industries: 

Interos - Canada Labor Strikes Industries at Risk

The industries most impacted are widespread across various diverse sectors with far-reaching potential shockwaves to the US economy. 

Even without a strike, some disruptions occurred as pre-emptive stoppages were underway in preparation for the strikes. For instance, the two major rail carriers stopped shipments of hazardous materials in anticipation of the strike. In addition, with 20% of US trade first arriving in the Ports of Vancouver and Prince Rupert, a longer strike would have ripple effects across the interdependent economies. Although arbitration forced a return to work, the threat of strikes still looms.  

India’s Planned Strike Looms Large Over Global Economies 

India has a history of workers’ strikes and protests, with truckers striking earlier this year leading to a drop in goods such as fuel and fruit. Similarly, the farmers’ protests over new legislation had disruptive supply chain impacts. Despite this history, the risk of strikes at the major ports could lead to unprecedented disruption. Three years of labor negotiations may be coming to a halt, as twenty thousand workers at 12 major Indian ports are threatening to strike tomorrow, on August 28th. 

As the fifth largest economy, and most populated country, a labor strike in India certainly would have global ramifications. Since the beginning of 2023, India has accounted for well over one hundred million individual export shipments. Based on Interos data, the United States and United Arab Emirates combine for over 30% of Indian exports, while Hong Kong, and several European countries hold other top spots.

Interos | India Labor Strikes Markets at Risk

Since 2023, Interos’ data shows that India’s top exported goods encompass a wide range of products: 

Interos | Export Commodities at Risk by Indian Port Labor Strikes

The Port of Nhava Sheva and New Delhi accounted for roughly one third of India’s total number of exports since 2023, while the Ports of Chennai, Mumbai, Bangalore, and Mundra also serve as key corridors. A closure to any of these could exacerbate already strained supply chains. 

Looking Ahead: Labor Strikes Positioned for Significant Disruptions to Supply Chains  

India and Canada are far from alone in the risk of labor strikes. On August 25, the Fremantle Ports in Australia were expecting a second weekend of stoppages due to strikes and just today thousands of Australian construction workers protested, leading to the disruption of projects in major cities. The Fremantle Port strikes were halted on Friday when an agreement was reached. Germany and Belgium also have had recent labor strikes at their ports, and earlier this year, labor strikes also impacted German railways and airports. The number of striking workers in the US more than doubled in 2023, as labor strikes impacted ports on both the East and West Coasts of the US.  China is not immune from this trend, as strikes and protests have increased in response to the economy and demanding higher wages, with 80% of the strikes within manufacturing and property. 

In some cases, forwarding leaning companies who have adjusted to the new norm of supply chain disruptions may be less impacted by these labor strikes. For instance, in response to instability in the Red Sea, some companies placed their orders much earlier, potentially shifting peak shipping season to earlier in the year. 

For others, reshoring and geographic diversification is a growing strategy to build more resilient supply chains. This requires a holistic view of risk as new locations may pose different, but potentially equally disruptive, challenges. For instance, many companies look to India as a viable alternative to China but must be aware of the localized benefits and risks at the subnational level. 

Get Ahead of Labor Strikes with Interos 

Interos’ continuous monitoring alerts quickly identify the potential impact of disruptions across their extended supply chain. This visibility empowers companies to get ahead of potential disruptions both upstream and downstream in their supply chain.  

For instance, a bi-coastal strike by the International Longshoreman’s Association in October in the US looms large pending contract negotiation. Interos will be watching the ongoing risk of labor strikes in Canada, India, and the US closely, as well as the broader trend of global labor strikes.  

For a more detailed analysis of the potential impact of labor strikes in Canada and India, download our report below: 

 

IT Outage Impact Analysis – At Least 674,000 Enterprise Customers at Risk of Disruption Globally

Posted on by Interos

by: Deverick Holmes, Operational Resilience Consultant, and Mackenzie Clark Senior Computational Social Scientist

This report details the global outage involving CrowdStrike, highlighting the incident’s domestic and international impact on trade and business operations. Interos has provided a detailed timeline of events and recommended steps customers should take here.

Summary

CrowdStrike was involved in a global IT outage that has highlighted the vulnerability of interconnected global supply chains. The outage impacted 674,620 direct customer relationships of CrowdStrike and Microsoft, and over 49 million indirectly, according to Interos data. While the U.S. was the most affected country, with 41% of impacted entities, the disruption was also felt at major ports and air freight hubs in Europe and Asia. Ports from New York to Los Angeles and Rotterdam reported temporary shutdowns, while air freight suffered the hardest blow, with thousands of flights grounded or delayed. The outage exacerbates existing supply chain challenges amid rising global demand and freight prices, highlighting the potential long-term implications for global trade and finance.

Another Global Trade Disruption

The interconnected nature of global supply chains means international trade will experience ripple effects due to even temporary shutdowns. This comes as freight prices skyrocket and shipping demand rise. When using Interos data to understand how expansive the trickle-down effects of the outage are, the results are striking.

Interos analyzed the extended supply chains of both CrowdStrike and Microsoft, whose Microsoft 365 systems were disrupted as part of a CrowdStrike update, leading to outages for Microsoft users across the world. When examining the direct customer relationships (Tier 1) of both Microsoft and CrowdStrike, Interos was able to identify 674,620 customer relationships. When expanding the scope of impact to include the customers of Microsoft and CrowdStrike’s customers (Tier 2), the number of customer relationships identified by Interos data grows to over 28 million, and when going one step further (Tier 3), that figure increases to over 49 million customer relationships.

The outage has had varying levels of impact across Union Pacific’s freight network while Ports from New York to Houston and Los Angeles reported temporary container terminal shutdowns overnight but were mostly operational by early morning. Rotterdam, the largest port in Europe, said some companies operating at its terminal were impacted. On average, the port at Rotterdam handles approximately 1.3 million tons of cargo daily. This includes a diverse range of goods such as containers, bulk commodities (like crude oil, coal, and iron ore), and various other cargo types. In addition, UK ports of Felixstowe and Tilbury have all been confirmed to be suffering from major IT outages while similar issues were reported at ports in Poland and Asia.

Air freight was hit the hardest, with many global airlines grounding flights and the complex air cargo system facing a recovery period that could last days or weeks. Thousands of flights were grounded or delayed at the world’s largest air freight hubs in Europe, Asia, and North America. These hubs are critical nodes in the international logistics network, handling vast quantities of cargo daily. The grounding of these flights may lead to trickle down delays in the movement of goods, impacting various industries. The semiconductor supply chain, for example, relies heavily on air freight to transport finished products from manufacturing centers in the EU and Asia to markets in the U.S., has been particularly affected. This new issue for the global supply chain comes amid a rise in global demand and prices, driven by the ongoing conflict in the Red Sea and climate change impacting trade routes, with shipments up 13% year-over-year in June, while air freight supply has only increased by 3%, already causing higher costs for shippers due to limited capacity. As it may take days or weeks for airfreight companies to fully bring their systems back on-line this will only exacerbate the ongoing supply chain hurdles facing the global market.

Interos Data Shows U.S. & European Entities Highly Impacted 

According to data from Interos, the outage potentially impacted 674,476 entities globally, with 280,760, or 41%, of these being in the United States. Given that the U.S. is a major economic engine for global trade, this outage may have significant short-term implications for international commerce and finance.

 

Interos data would also indicate that European countries are highly exposed to this event. Within the top ten countries listed in the chart above, several are in Europe: the United Kingdom, Germany, Italy, France, Spain, The Netherlands. Combined, these countries account for 186,749 of entities, or 27.68%. While this does not account for the entire European continent, this figure underscores the global nature of this outage.

U.S. companies whose systems remain down are exposed to increased cyber risks. When systems are offline or experiencing disruptions, it becomes harder to implement standard security protocols and monitor for potential threats. This downtime can create vulnerabilities that cybercriminals may exploit, such as weakened defenses, unpatched software, and delayed security updates.

U.S. consumers have reported issues with declined credit card transactions, disrupting personal and business activities. Additionally, U.S. airlines, which play a crucial role in facilitating cross-border business, have experienced widespread cancellations and delays. This disruption in airline operations could lead to delays in business meetings, shipments, and other critical economic activities, further exacerbating the impact on global trade. With critical systems and data at risk, these companies face a heightened possibility of cyberattacks, including data breaches, ransomware attacks, and unauthorized access. Moreover, the inability to detect and respond to threats in real-time during such outages can exacerbate the potential damage, leading to significant financial losses, reputational harm, or regulatory consequences.

According to reports, CrowdStrike is utilized by 82 percent of U.S. state governments and 48 percent of the largest U.S. cities. Given its widespread adoption, a prolonged outage of CrowdStrike’s services could severely impact municipalities’ ability to maintain essential cybersecurity defenses. These state and municipal entities rely heavily on CrowdStrike Falcon’s advanced threat detection and real-time monitoring to protect sensitive data and critical infrastructure from cyber threats. Without these protections, municipalities could experience increased vulnerability to cyberattacks, such as ransomware, data breaches, and unauthorized access, potentially compromising public safety, emergency response systems, and the security of citizen information.

Furthermore, the disruption could hinder the ability of these governments to deliver public services effectively. Key functions such as water treatment facilities, public transportation systems, and healthcare services, which increasingly depend on digital infrastructure, could be at risk.

In addition to local municipalities, CrowdStrike is used by many prominent organizations across various sectors. Various U.S. government agencies, including parts of the Department of Defense and intelligence agencies, rely on CrowdStrike for its advanced threat detection. Major financial institutions across the U.S. and EU such as Goldman Sachs, Bank of America, and Santander also use CrowdStrike to protect their sensitive data, and giant retailers like Walmart and Target, as well as energy companies such as ExxonMobil and Exelon, also depend on CrowdStrike to defend against cyber threats and protect critical infrastructure. The system is particularly preferred by high-profile organizations worldwide for its ease of use and robust security features.

Outage Spans Multiple Industries

The direct effects of this outage also span a broad range of industries. While impacts to airlines and banks have been the most widely reported on, Interos data shows that companies in the professional services, wholesale, and various manufacturing industries make up the bulk of companies that are potentially experiencing disruptions.

Of those directly supplied by Microsoft or CrowdStrike, companies in the Professional, Scientific, and Technical Services industry make up almost 7% of customers, followed closely by companies in the Merchant Wholesalers industry, at almost 5% of customers, and the Administrative and Support Services industry, at over 3% of customers.

In total, Interos identified companies spanning almost 1,200 unique industries that are directly supplied by Microsoft or CrowdStrike. From the telecommunications industry, to hospitals, utilities providers, and even postal services, virtually no industry was left unaffected by this outage. These types of disruptions cause delays in critical infrastructure and the delivery of products services, leaving businesses and consumers across the world without access to key services or goods.

Interos’ data shows ongoing supply chain disruptions cost enterprises $100 million in annual losses on average. The company’s critical risk intelligence platform helps companies mitigate the financial impacts of multi-tier risks by continuously mapping and monitoring extended supply chains at speed and scale.

Learn how you can manage risk by exception, at scale. Speak to an expert today.

 

Posted on by Interos

by Julia Hazel and Dianna ONeill

While the dire outlook for the 2024 Atlantic hurricane season has raised alarms across the U.S., supply chain risk leaders focusing solely on this region are dealing with incomplete information.

Unlike 2023, the Pacific is expected to experience a relative reprieve from tropical cyclones this season. The complex climate dynamics impacting typhoons and hurricanes across the two oceans underscores the need for a global, seasonally-dependent assessment of catastrophic risks to supply chains.

The Looming Threat in the Atlantic

The National Hurricane Center’s unprecedented forecast is fueled by climatic conditions creating a perfect storm for intense hurricane development. However, an exclusive focus on this region alone risks overlooking critical threats to global supply chains posed by tropical cyclone activity elsewhere.

According to data from the World Bank, natural disasters in the East Asia and Pacific region caused over $60 billion in economic damages in 2021 alone, with a significant portion attributed to tropical cyclones disrupting supply chains.

Pacific Cyclones: An Underestimated Peril

In 2023, while the Atlantic saw 20 named storms, the remaining 58 tropical cyclones wreaked havoc across the Pacific and Indian Oceans, inflicting damage from China to Australia and Africa. The impacts of a single, powerful storm system can be immense:

  • Typhoon Doksuri, which ravaged Beijing and coastal China in July 2023, closed major ports and destroyed critical infrastructure, triggering $25 billion in U.S. economic losses according to Munich Re.
  • The technology sector has been heavily impacted by Pacific storms, with companies like Apple, Samsung, and Intel facing disruptions to their supply chains in recent years. In 2022, Super Typhoon Noru forced several semiconductor factories in Taiwan to temporarily halt operations, exacerbating the global chip shortage.
  • The automotive industry has also been battered by Pacific cyclones. In 2021, Typhoon Chanthu caused production stoppages at Toyota’s plants in Thailand, resulting in estimated losses of $98 million.

Regionally Tailored Forecasts

Interestingly, while the Atlantic is bracing for a historically active hurricane season, the forecasts for other regions paint a different picture. The outlooks for the Central and Eastern Pacific call for below-normal tropical cyclone activity, with NOAA anticipating a 50% chance of below-normal activity in the Central Pacific and 60% in the Eastern.

This divergence can be attributed to the effects of La Nina, which augments hurricane development in the Atlantic but has the opposing effect in the Pacific by increasing both vertical wind shear and atmospheric stability – conditions that suppress cyclone formation and intensification.

Comprehensive Catastrophic Risk Assessment

The stark disparity in this year’s forecasts across different regions of the world underscores the importance of businesses adopting a truly global, seasonally-dependent assessment of catastrophic risks to their supply chains. The threats posed by tropical cyclones are dynamic, shifting in both space and time depending on the season, the inherent risk profile of a given location, and continuously evolving climatic patterns.

To protect against these dynamic threats, organizations must gain greater visibility into their extended supply networks, identifying key suppliers situated in areas historically prone to natural hazards like hurricanes and tropical cyclones.

Moreover, they must continuously monitor how risk patterns shift across seasons and regions in real-time, using comprehensive supply chain lifecycle risk intelligence to proactively adjust mitigation strategies:

  • Interos’ catastrophic risk model provides a powerful solution to this complex challenge, offering a high geospatial resolution. This delivers more precise in-country and in-state risk indicators for faster and more focused hazard mitigation.
  • The technology enables businesses to proactively assess which suppliers are in areas susceptible to different natural hazards, as well as which specific hazard risks are likely to emerge during particular seasons.
  • The model’s continuous monitoring enables real-time tracking of supply chain impacts from unfolding natural events, empowering organizations to respond swiftly.

Consider the example of Cooper University Health Care. It used catastrophic risk intelligence from Interos to identify suppliers located in the path of Hurricane Idalia in 2023. By leveraging real-time catastrophic intelligence, managers were able to pre-position critical materials to ensure uninterrupted patient care.

As climate volatility and extreme weather become increasingly commonplace, embracing global, real-time hazard monitoring solutions like Interos’ catastrophic risk technology are crucial for proactively deterring and mitigating supply chain disruptions.

Click here to learn how Interos can secure your supply chain against extreme weather and other risks.

 

Bracing for the Worst Hurricane Season on Record: NOAA’s Dire 2024 Forecast and How to Secure Your Supply Chain

Posted on by Dianna ONeill

The National Oceanic and Atmospheric Administration (NOAA) has issued an unprecedented warning for the 2024 Atlantic hurricane season, predicting it to potentially be the most active and destructive on record. A combination of exceptionally warm ocean temperatures and favorable atmospheric conditions could spawn up to 25 named storms, compared to an average of 14, including four to seven major hurricanes, compared to an average of three. The Atlantic hurricane season runs from June 1 to November 30.

NOAA’s Alarming Forecast

NOAA’s 2024 guidance is based on several factors:

  • Near-record sea surface temperatures: The Atlantic Ocean is experiencing among its warmest temperatures ever recorded, providing an ideal breeding ground for intense storm formation.
  • A rapid transition from El Nino to La Nina Conditions: La Nina conditions are typically associated with above normal hurricane seasons in the tropical Atlantic
  • Low wind shear: Forecasters anticipate lower-than-average vertical wind shear due to a transition from El Nino to La Nina conditions, which can disrupt the intensification and tracks of hurricanes, leading to more robust storm systems that can strike the coast.

With these conditions in play, NOAA warns that 2024 could surpass the record-breaking 2005 season, which saw 28 named storms, including the devastating Hurricane Katrina.

The Escalating Toll of Climate Disasters on Supply Chains

The potential impact of an unprecedented hurricane activity is part of a broader trend of escalating extreme weather worldwide, with serious implications for global supply chains and business continuity.

These continued climate shocks have exposed the vulnerabilities of complex and interconnected global supply chains, underscoring the urgency of comprehensive lifecycle risk management to mitigate threats.

Organizations that lack the ability to gauge supplier exposure to hurricanes and other disasters risk paralyzing disruptions that damage brand, reputation, and profitability.

Leveraging Catastrophic Risk Technology

Interos’ groundbreaking Catastrophic Risk technology is an advanced solution to help businesses navigate extreme weather. This AI-powered innovation provides organizations with a comprehensive and continuous view of their extended supply chain, enabling procurement and risk leaders to proactively identify and mitigate risks from hurricanes, wildfires, floods, and other catastrophes.

As an example, New Jersey-based Cooper University Health Care leveraged Interos’ Catastrophic risk intelligence to get ahead of Hurricane Idalia in 2023 as it barreled toward an area in Florida where several of the company’s suppliers are based.

“Interos gave us the ability to track potential impacts before the storm hit,” says Thomas Runkle, VP, Supply Chain. “We identified three suppliers in the path, two of which provide products to our system. We discovered one placed a cutoff on orders with no notice. Having acted on the new risk map data, we reached out in time to get several days of orders placed before they were stopped due to the hurricane.”

By leveraging advanced supply chain risk intelligence and machine learning, Interos’ technology can visualize sub-tier suppliers impacted by a range of hazards, including weather patterns, climate, communication, infrastructure, and healthcare capacity.

This proactive approach empowers businesses to pre-plan months in advance and take necessary steps to minimize disruptions.

Interos’ Catastrophic Risk intelligence provides foundational risk intelligence to fuel key strategies for achieving climate-resilient supply chains, including:

  • Mapping to Diversify the Supplier Base: Explore alternative suppliers in different geographic regions to reduce reliance on a single location or region prone to climate disasters.
  • Real-time Risk Identification to Support Business Continuity Plans: Develop and regularly update comprehensive business continuity plans that outline strategies for maintaining operations during and after hurricanes, floods, wildfires, or other natural disasters.
  • The World’s Largest Knowledge Graph to Enhance Inventory Management: Understand your extended supply chain to support maintaining strategic inventory levels of critical components and materials to mitigate the impact of supply chain disruptions.

As the 2024 hurricane season approaches and the threat of climate disasters escalates, it is crucial for businesses to prioritize supply chain resilience and embrace AI-risk capability like Interos’ Catastrophic Risk Visibility technology.

By taking proactive measures and leveraging advanced lifecycle risk intelligence, organizations can better navigate the challenges posed by extreme weather events and ensure the continuity of their operations, while mitigating the staggering economic toll of supply chain disruptions.