Cyber-attacks and skills shortage top causes of supply chain disruption

High-income countries remain the global leaders in trade logistics, finds the 2018 World Bank Group Logistics Performance Index (LPI).  Overall, the score profile of the entire set of more than 160 countries has remained similar since the 2007 edition, with Germany recording the highest aggregate score over the past four LPI editions.

In addition to being an important benchmark for the individual countries’ performance along the logistics supply chain, the Index captures the main trends and challenges perceived by logistics professionals. The latest edition of the Index highlights three main challenges, labour shortage, sustainability of supply chains and resilience to cyber-attacks.

Shortage of logistics professionals in both developed and developing countries has been identified as one of the greatest concerns among supply chain professionals. While the problem persists in both developed and developing countries, the nature of labour shortage differs across the board. Developing countries see the most severe skill shortage at the managerial level, for instance in filling senior supply chain management positions. On the other hand, developed countries seek qualified blue-collar workers, such as truck drivers. These findings are a reminder that despite extensive mechanisation and automation, logistics remains a people business and dependent on a rather specific set of skills and competencies. As such it requires action not only from the private sector but also from policy makers which are encouraged to introduce national initiatives to promote logistics competence and train people for logistics positions.

Sustainability of supply chains is another trend that has grown over the last couple of years, with the Index highlighting that environmental consciousness is on the rise. Growing awareness of and a demand for green logistics is higher in high-income countries than in low-income countries, confirming that demand for sustainable supply chain management goes hand in hand with logistics performance.

Threat of cyber-attacks emerges as the third theme in the 2018 LPI Index. With a significant increase in the scale and severity of malicious cyber activity globally in the past few years, it should come as no surprise that more countries perceive cybersecurity threats a risk to logistics. When we take a look at the recent cyber-attacks of Maersk Line, FedEx and COSCO, it becomes evident that logistics businesses have specific vulnerabilities which make it all the more important for them to defend their operations from cyber threats. Whilst the impact of cyber-attacks on logistics operations is recognised across both developed and developing countries, high-income countries are more likely than low-income countries to be increasing their preparedness for cyber threats. That cybersecurity safeguarding efforts are not high on the agenda of low-income countries should come as no surprise given that they have to deal with more pressing issues to boost their national competitiveness, such as improving infrastructure for instance.   

In summary, the three key areas of disruption logistics companies need to focus on going forward are labour shortage, sustainability of supply chains and cyber-attacks. While both evolutionary and revolutionary measures on the part of private companies will be required to meet these challenges head on, national logistics competitiveness is unlikely to improve without the public sector’s interventions and policies.

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Source: Transport Intelligence, July 31, 2018

Author: Violeta Keckarovska


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