Navigating Troubled Waters: Unseen Threats to Global Supply Chains

How Houthi Attacks and a Drying Panama Canal Could Disrupt Global Trade and Impact National Security

A supply chain crunch is on the horizon.

During the early days of the COVID pandemic, the norms of supply and demand were turned on their head. Demand evaporated in some categories and skyrocketed in others (toilet paper, Lysol wipes, etc).

Off-shored manufacturing, factory closures due to illness, port closures and backlogs, and just-in-time logistics all conspired to demonstrate how fragile our supply chains were.

US businesses and the government responded--or so it seemed. Businesses claimed to invest in nearshoring manufacturing.

In reality, few actually did.

Instead, they relied on increasing inventory. The government established a Supply Chain Disruption Task Force to study and address short-term supply chain discontinuities. Admittedly, we've seen some progress in terms of investment in new plants and production facilities, which surged almost 63% in 2023--in part due to federal incentives.

Unfortunately, analysts don't expect this pace of investment to continue.

And t…