Hello 👋 get a brew on because these are the top emerging risks between January 26, and February 9th, 2026…
Review our report’s terminology here ↗
Our main risk this fortnight is…
1. Economic: Consumer Goods Costs Surge on Global Shipping Crisis
Global shipping costs have surged dramatically since late 2025, with container rates from Asia to Europe and the US more than doubling from mid-year levels, forcing businesses to make difficult decisions about absorbing costs or passing them to consumers.
The Red Sea shipping crisis continues to disrupt major trade routes, with vessels diverted around the Cape of Good Hope adding approximately two weeks to journey times and significantly increasing fuel and operational costs for shipping companies.
Procurement executives across multiple industries report that transport and logistics now represent the fastest-growing component of their cost base, with some companies seeing shipping expenses increase by 150-200% compared to pre-crisis levels.
Computer and electronics manufacturers are particularly affected due to concentrated Asian production, with some firms reporting lead time extensions of 3-4 weeks and considering airfreight alternatives at substantially higher costs to maintain customer commitments.
Industry analysts warn that inflationary pressures from shipping costs may persist through 2026, with limited capacity to absorb cost increases in already thin-margin sectors likely to result in consumer price rises across electronics, textiles, and household goods.
Sources
Red Sea Crisis Continues to Reshape Global Trade Routes | Lloyd’s List | 28 January 2026
Container Shipping Rates Index: Q1 2026 Analysis | Freightos | 5 February 2026
Procurement Leaders Survey: Supply Chain Cost Pressures | Gartner | 30 January 2026
You should be concerned if…
Retail and consumer goods importers: Businesses relying on Asian manufacturing with limited supplier diversification face margin compression or difficult pricing decisions. Those locked into fixed-price contracts with customers while bearing variable shipping costs are particularly exposed to profitability erosion.
Electronics and technology hardware companies: Organisations dependent on components manufactured in concentrated Asian production hubs face both cost increases and delivery reliability challenges. Companies with just-in-time inventory models may experience stockouts or be forced into expensive air freight alternatives.
Small and medium enterprises with limited bargaining power: Unlike major multinationals who can negotiate preferential rates or absorb short-term losses, SMEs face disproportionate cost impacts and may struggle to pass increases to price-sensitive customers without losing market share.
Food and perishables importers: Time-sensitive cargo faces compounded challenges from extended shipping times, with some products becoming unviable for sea freight and requiring costly modal shifts or supplier changes.
These items are generic assumptions. We recommend considering your own unique risk landscape against your critical dependencies. If you don’t know what they are, get in touch.
Preventative actions
Diversify supplier geography and shipping routes
Review concentration risk in your supply base. Identify alternative suppliers in regions less affected by Red Sea disruption, such as nearshore options in Eastern Europe, Turkey, or Latin America depending on your market. Even partial diversification reduces single-point-of-failure exposure.
Renegotiate contract terms with flexibility clauses
Build shipping cost adjustment mechanisms into supplier and customer contracts. Index-linked pricing or cost-pass-through clauses protect against margin erosion while maintaining commercial relationships during volatility.
Increase safety stock for critical components
Calculate the true cost of stockouts versus additional inventory holding costs. For high-margin or business-critical products, increasing buffer stock from weeks to months may prove economically rational given current freight premium differentials.
Explore modal diversification including rail
China-Europe rail freight via the Trans-Siberian or Kazakhstan routes offers intermediate speed and cost between sea and air. While capacity is limited, establishing relationships with rail freight providers creates optionality.
Audit landed cost assumptions quarterly
Static cost models based on historical freight rates lead to pricing and profitability surprises. Implement quarterly reviews of true landed costs including current freight rates, fuel surcharges, and extended transit time impacts on working capital.
2. Societal: Singapore Stress-Tests National Resilience with Simulated Crisis
Singapore’s Total Defence Day exercise, SG Ready, will simulate simultaneous power outages and digital disruption across the island nation, testing citizens’ preparedness for extended periods without electricity, mobile connectivity, and digital payment systems.
The exercise builds on Singapore’s mandatory Total Defence framework established in 1984, which encompasses military, civil, economic, social, digital, and psychological defence pillars, creating a whole-of-society approach to national resilience.
Government agencies, critical infrastructure operators, businesses, and individual citizens are expected to participate, with scenarios designed to identify vulnerabilities in essential services and test backup systems across healthcare, transport, and financial services.
Taiwan has developed similar resilience maturity through its nationwide mandatory drills, including the annual Han Kuang military exercises and Wan An civil defence drills, combined with high adoption of government-backed technology solutions such as the resilient emergency communication systems and distributed backup infrastructure.
Both Singapore and Taiwan demonstrate that cultural resilience can be systematically built through regular practice, normalising emergency preparedness across populations and reducing panic response during actual crises while creating confidence among international investors and trading partners about operational continuity.
Sources
You should be concerned if…
Multinational corporations evaluating regional headquarters locations: Singapore and Taiwan’s demonstrated resilience capabilities increasingly factor into investment decisions. Countries unable to demonstrate similar preparedness may lose competitive position for foreign direct investment, particularly for operations requiring high uptime guarantees and business continuity assurance.
Critical infrastructure operators in countries without national resilience frameworks: Organisations operating utilities, telecommunications, healthcare, or financial services infrastructure in nations lacking coordinated national exercises face unknown systemic vulnerabilities. Individual company preparedness means little if interdependent systems fail during cascading crises.
Government policymakers responsible for emergency preparednes: Nations relying on reactive crisis management rather than proactive resilience building through regular exercises risk both higher casualties during emergencies and reduced international confidence in their stability as trade and investment partners.
Supply chain managers with Asia-Pacific exposure: Understanding which regional nodes have stress-tested resilience versus those operating on untested assumptions affects risk-adjusted supply chain design. Singapore and Taiwan’s preparedness provides relative confidence in operational continuity.
Preventative actions
Adopt Singapore and Taiwan frameworks as benchmarks
Study the Total Defence and civil defence exercise structures used by Singapore and Taiwan. Adapt these frameworks to your national or organisational context, focusing on their systematic approach to identifying dependencies and testing failure modes.
Advocate for national resilience exercises
Business leaders and industry associations should actively lobby governments to establish regular, mandatory resilience exercises. Frame the argument in economic terms: demonstrated national resilience attracts foreign investment and trade partnerships, while untested systems create sovereign risk premiums.
Conduct organisation-level simulation exercises
Do not wait for national frameworks. Run your own crisis simulations testing operations without power, connectivity, or digital payments for extended periods. Identify which business functions fail, what manual workarounds exist, and where critical single points of failure remain unaddressed.
Build cultural preparedness within your organisation
Singapore and Taiwan succeed because preparedness is normalised across their populations. Replicate this within your organisation through regular drills, emergency preparedness training, and clear communication that resilience is a core operational competency, not an occasional compliance exercise.
Document and communicate your resilience capabilities
As demonstrated resilience becomes a competitive differentiator, organisations that can evidence their preparedness through documented exercises, tested backup systems, and trained personnel will have advantages in supplier qualifications, insurance negotiations, and investor relations.
Quick fire threat updates
Malaysia Insurers Face Unprecedented Catastrophe Risk Exposure
Malaysia’s insurance sector confronts a dramatic spike in catastrophe risk for 2026, with climate-driven flood events and storms increasing in both frequency and severity. Insurers face the dual challenge of maintaining affordable coverage while building adequate reserves for mounting claims. The risk extends beyond insurers to businesses and property owners who may find coverage becoming prohibitively expensive or unavailable in high-risk zones, potentially creating protection gaps that leave significant assets uninsured against increasingly predictable climate events.
Geopolitical turbulence shows no signs of abating, with ongoing tensions across multiple regions continuing to disrupt established trade patterns and logistics routes. The convergence of trade policy uncertainty, regional conflicts, and shifting alliance structures creates an operating environment where supply chains face continuous adjustment pressure. Organisations treating current disruptions as temporary aberrations rather than the new normal risk repeated surprise; building adaptive capacity and scenario planning into procurement and logistics functions is now essential rather than optional.
Why the Bumpy Geopolitical Ride Is Far From Over | Supply Chain Brain | February 2026
Logistics Networks Require Climate Resilience Overhaul
Extreme weather events are exposing fundamental vulnerabilities in global logistics infrastructure, with floods, storms, and temperature extremes disrupting ports, warehouses, and transport networks with increasing regularity. The risk compounds as climate impacts affect multiple nodes simultaneously, overwhelming traditional backup arrangements designed for isolated incidents. Supply chain managers must now evaluate climate exposure across their entire network, investing in infrastructure hardening, route redundancy, and real-time weather monitoring to maintain operations as extreme events become routine rather than exceptional.
Australian Emergency Communications Failures Expose Rural Vulnerability
Telstra faces criticism after mobile network outages during emergency situations left rural Australian communities unable to contact emergency services or receive critical warnings. The failures highlight dangerous dependencies on single telecommunications providers in regional areas where alternative connectivity options are limited or nonexistent. Rural businesses, local governments, and residents should assess their communications resilience, identifying backup options such as satellite phones, radio networks, or redundant carriers, while advocating for improved infrastructure investment in underserved areas.
Nationals Slams Telstra Over Emergency Mobile Outages | WAMN News | February 2026
Pandemic Risk Insurance Market Gains Momentum
The pandemic risk insurance market continues expanding as businesses seek protection against future health emergencies following lessons learned from COVID-19 disruptions. Growing demand reflects corporate recognition that pandemic-related business interruption represents a material and recurring risk requiring dedicated coverage rather than reliance on standard policies that often exclude such events. Organisations should evaluate their current policy exclusions, assess pandemic-specific coverage options, and factor premium costs into broader business continuity planning rather than assuming governmental support will materialise during future health crises.
Pandemic Risk Insurance Market Report | Market.us | February 2026
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