This question was asked by Nik Martin of Deutsche Welle (DW) recently. As the Iran war simmers, trade experts ask whether it could reshape supply chains more deeply than COVID, forcing companies to rethink strategies to counter further geopolitical shocks. During the pandemic, factories shut down, ships stacked up at major ports and just-in-time systems — which keep inventories low and rely on parts arriving exactly when needed — buckled. Yet energy prices stayed relatively steady. This time, non-energy trade, so far, has held up better.

Supply chain expert Lisa Anderson, president of LMA Consulting Group, thinks the back-to-back crises have altered how many companies now assess risk.

“COVID got companies to the point where they realized they can’t just count on supply showing up when they need it,” Anderson told DW. “The Iran war shows it was not a one-off event.”

The full economic impact is pending. Making supply chains more resilient is proving especially difficult because the full impact of the disruption has yet to be fully felt.

Nearly two-thirds of firms are worried about further supply chain disruptions and higher energy and commodity prices due to the war, a survey of 6,000 companies in 13 countries found. The research, published on April 8 by Allianz Trade, the trade research arm of Germany’s Allianz Group, noted an increase in plans to accelerate so-called reshoring or nearshoring — the practice of moving production and suppliers closer to home or to more stable neighboring countries. This shift is especially pronounced in Europe.

“One way to avoid major choke points is to bring manufacturing closer to where the customers are,” Anderson told DW.

Read the full article at DW.

If you are interested in reading more on this topic:
Supply Chain Chokepoints in Goods Movement & the Path Forward