Risk trivia:
April’s newsletter featured a stat of the month based on tariff data from the World Trade Organization (WTO), an intergovernmental body that regulates and facilitates international trade.
So, history buffs, in what year did the WTO officially commence operations?
Bonus question: Where are WTO headquarters located?
Answers can be found in the Time Machine section below.
This issues key takeaways:
- 81% of supply chain and procurement professionals had their business impacted by supplier disruption in the past two years—before tariffs.
- 62% of respondents reported high or very high levels of risk in their supply chains in 2024.
- 30% of supply chain disruptions cost over $5 million.
Snapshot: Annual Risk Survey 2025: Supply Chain Disruption Trends and Their Economic Impact
By James H. Gellert, Executive Chair, RapidRatings
Financial risk is an unavoidable theme of 2025 thus far, as tariffs and uncertainty dominate any discussion about the outlook of the global economy in the weeks and months ahead. This gives added urgency to this month’s topic, the RapidRatings’ 2025 Risk Survey Report, which I’ll be focusing on today.
Survey Says: Goals, Audience, Methodology
The goal of the 2025 RapidRatings Risk Survey is to provide a snapshot into the current risk landscape, by analyzing survey feedback from supply chain and procurement professionals worldwide.
The survey collects insight into key areas such as perceived risks, disruption costs, impacts on business, and mitigation strategies. Respondents represent a wide array of professional roles, company sizes, geographic locations, and sectors, which are clearly outlined in the survey.
In short, the RapidRatings’ clients, and our 19,000 users, are typically industry leaders across more than 25 industries globally. These include both industrial companies and financial institutions. The suppliers we rate are generally their most critical and strategic partners. This means our survey is reflective of the most important companies in the world and their insights regarding the most critical public and private company suppliers. These opinions and insights are worth knowing.
The end result is a uniquely textured overview of supply chain risk, from people who manage and plan for those risks every day. Here’s what stands out to me from the survey results.
Supply chain risks were expected to escalate. They have.
A big, in-your-face takeaway from the survey is that high levels of supply chain disruption from 2024 are seen as just a precursor to increased risk this year. Procurement and supply chain experts expected heightened levels of risk in 2025, and that was before the recent trade turmoil sparked by new tariffs convulsed global markets even further.
What’s remarkable is how prescient the survey results appear to be already. According to respondents, the top two factors likely to have the greatest impact on supply chain disruption were geopolitical events and tariffs. In just the last several weeks both have created a daily drumbeat of anxiety that’s echoing throughout boardrooms and factory floors everywhere.
The drama unfolding daily was, in many ways, hiding in plain sight in this survey’s data. The upward trend of risk has remained steady: 55% of respondents experienced supply chain disruptions in the final six months of 2024.
The Asia-Pacific region and China were both perceived as the most likely source of supply chain disruption by large margins; the resulting fear of an extended economic fallout is becoming more acute as the US-China trade showdown continues.
This is when I stop and take a deep breath. This isn’t an alarm bell of panic, just a recognition that the risk trends from the survey revealed not just what people had already experienced but also what they saw when looking ahead.
The message is this: if you weren’t prepared for uncertainty and risk in 2024, you better get prepared. Like, yesterday.
Who needs to plan for financial risk with urgency? Everyone.
The financial impact of a supply chain disruption can knock some organizations off-balance, and other organizations out cold. Nearly 30% of disruption events end up costing companies at least $5 million, and they hit core business areas hard.
The top four critical business areas most affected by supply chain disruptions are operational costs, revenue targets, productivity, and inventory management. Now ask yourself: can your organization withstand a serious disruption or breakdown in any of these key areas?
As the survey data shows, these risks aren't limited to a few industries; they are widespread. The sectors causing the most concern to survey participants were computer and electronic product manufacturing, electrical equipment and appliance manufacturing, and machinery manufacturing.
However, a range of events including tariffs, supplier bankruptcy, and financial failures have created distress in sectors such as automotive, aerospace and defense, financial services, and pharma and healthcare.
The financial risk posed by financially unstable or unsound suppliers is present across sectors, and limits revenue and growth regardless of industry or region.
It’s not too late to mitigate
I hope that some of you reading this may be silently self-satisfied, knowing your company has prepared for the current financial environment with due diligence. I applaud you. However, I also commend anyone who isn’t sure or who feels worried but overwhelmed about how to proceed.
Risk management is challenging even in the best of times. It requires heightened dedication to transparency during turbulent periods like today. As companies confront increased supply chain risk in 2025, here are mitigation measures to consider as you look for ways to protect your business against supplier risk.
- Use modern tools that apply quantitative analysis to provide accurate and predictive insights into your supplier’s financials
- Monitor important indicators of supplier health, including liquidity, debt ratios, and profitability
- Consolidate or reduce your supplier numbers according to your current level of risk exposure
- Broaden your sourcing to reduce reliance on high-risk regions
Fear of risk, like fear of anything, can get in the way of good decision-making. These are uncertain times, but don’t let uncertainty prevent you from confronting financial risk with readily available solutions.
The Time Machine: 1947
It’s time. The time you’ve been waiting for. Time to talk about the General Agreement on Tariffs and Trade!
Bear with me on this one.
Ok, so the General Agreement on Tariffs and Trade (GATT) was established in 1947 as a multi-national trade treaty among 23 participating nations. Its primary focus was to promote international trade by reducing barriers such as tariffs and quotas.
After 48 years and nine rounds of negotiations, involving 123 participating nations, GATT was succeeded by a new organization established in 1995. That organization, drum roll please…. is the World Trade Organization!
So there you have it, the WTO was formed in 1995, and its headquarters are in Geneva, Switzerland.
And, if you enjoy Trivial Pursuit, your chances of winning have just increased. By an infinitesimal amount, but still.
If you’re curious about how RapidRatings offers the most accurate and comprehensive financial data analytics in the industry, check out RapidRatings.com to learn more.
