Navigating Risk in Transportation and Logistics: Gearing Up for Big Transitions

Rough Seas with Opportunities on the Horizon

Tariffs, geopolitical volatility and shifting trade practices are fueling uncertainty across the transportation and logistics (T&L) sector. From conflict-affected maritime corridors to urban delivery routes, disruptions are adding time, cost and complexity — whether through rerouting air cargo or adjusting rail schedules due to strikes.

In response, organizations are recalibrating strategies to mitigate emerging risks, adopt new technologies and reshape talent models, unlocking efficiency and positioning themselves for growth.

Current Risk Realities: Volatility and Uncertainty

According to Aon’s Global Risk Management Survey, T&L leaders identify the following risks as the most critical challenges facing their organizations today:

Top Current Risks Facing Transportation and Logistics Organizations

1. Cyber Attack or Data Breach
2. Economic Slowdown or Slow Recovery
3. Business Interruption
4. Increasing Competition
5. Regulatory or Legislative Changes
6. Supply Chain or Distribution Failure
7. Property Damage
8. Work Injuries
9. Geopolitical Volatility
10. Weather or Natural Disasters

These risks are deeply interconnected, with disruption in one area often amplifying exposure in another. Understanding these interactions is key to building resilience. The following sections examine how core risks are unfolding and how organizations can respond.

Cyber Risk: AI-Driven Threats and Lagging Preparedness

Cyber threats are rising across the transportation and logistics sector, fueled by digitalization, fragmented systems and AI-enabled fraud. Strategic theft is becoming more sophisticated, with criminals increasingly using deception – impersonating carriers, exploiting social engineering tactics, and infiltrating freight booking systems to manipulate documentation and steal cargo. Ransomware and data breaches continue to paralyze systems and trigger cascading disruption, halting warehouse operations, delaying shipments and exposing supply chain vulnerabilities.

To strengthen defenses, companies should invest in cyber hygiene, endpoint protection and employee training. AI-powered monitoring tools and secure data protocols are essential. Industry standards such as TAPA’s Trucking, Facility, Cybersecurity and Freight Broker Security Requirements offer a framework for improvement, and insurers and brokers can help close coverage gaps and tailor cyber policies to evolving threats.

Geopolitical Volatility: Tariffs, Sanctions and Supply Chain Disruption

Geopolitical instability often amplifies other risks across the T&L sector. Trade tensions, sanctions enforcement and regional conflicts can disrupt routing options and compound operational fragility. For example, ahead of U.S. tariff deadlines in July and August 2025, importers rushed to front-load shipments, causing port congestion and delays of up to 10 days at major hubs such as Rotterdam, Singapore and Cape Town.

These delays ripple through supply chains, affecting inventory availability, contractual delivery obligations and customer satisfaction. Longer transit routes can also heighten exposure to adverse weather conditions and increase insurance premiums, particularly for hull, cargo and war risk cover.

Organizations should build flexibility into routing and sourcing strategies, monitor geopolitical developments in real time and importantly— when moving goods close to areas of conflict — ensure insurance programs are reviewed for war exclusions and adjusted accordingly.

Property Damage: From Natural Disasters to Operational Hazards

Property damage remains a significant risk for transportation and logistics organizations, with exposures ranging from extreme weather events to fires, accidents and hazardous cargo incidents. Static assets such as ports, terminals and warehouses are vulnerable not only to flooding, wildfires and windstorms but also to operational disruptions such as fires and explosions — often triggered by undeclared, mischaracterized or improperly handled goods.

For example, in July 2025, catastrophic flash floods in central Texas caused widespread damage to freight hubs, highways and distribution centers, leading to prolonged closures, cargo losses and rerouting challenges that disrupted regional and national supply chains. Meanwhile, the shipping industry is contending with a decade-high number of cargo fires,¹ driven by the growing prevalence of lithium-ion batteries and mis-declared hazardous materials. These incidents can have devastating consequences for vessels, cargo, and crew.

To address these evolving risks, recent advances in AI are being deployed to help flag potential hazards before they escalate. AI-powered tools now scan millions of bookings in real time to identify suspicious patterns and undeclared dangerous goods, supporting carriers and insurers in preventing catastrophic incidents and improving overall safety.²

Given the breadth and complexity of property exposures, organizations should conduct site-specific risk assessments and invest in resilient infrastructure. Where capacity for assets exposed to natural catastrophes is limited, companies should look to the reinsurance market or to parametric insurance solutions to provide rapid recovery funding. Risk engineering support can also help design mitigation strategies such as elevated storage, reinforced structures and advanced drainage systems, ensuring a comprehensive approach to property risk management.

Looking Ahead: The Future Risk Landscape

The future risk rankings highlight the sector’s rapidly shifting landscape, where emerging technologies, workforce disruption and geopolitical instability are reshaping how organizations assess and manage risk. As technology and AI accelerate change across operations, they also intensify threats by driving cyber exposure, transforming job roles and fueling competition.

Companies that align risk strategy with innovation build resilience into their business models and adapt quickly to shifting conditions. They will not only manage volatility but also outperform less agile competitors.

Top Risks Facing Transportation and Logistics Organizations in Three Years’ Time

1. Increasing Competition
2. Cyber Attack or Data Breach
3. Economic Slowdown or Slow Recovery
4. Regulatory or Legislative Changes
5. Business Interruption
6. Geopolitical Volatility
7. Cash Flow or Liquidity Risk
8. Political Risk
9. Supply Chain or Distribution Failure
10. Aging Workforce and Related Health Issues

Increasing Competition: Disruption from All Angles

Competition in the sector is intensifying — and it’s not just coming from traditional rivals. Asset-light start-ups are entering the market with speed and agility, leveraging digital platforms, AI and automation to scale rapidly. In areas such as freight brokerage and forwarding, in which capital requirements are low, these new entrants are reshaping the competitive landscape and challenging incumbents on cost, speed and customer experience.

At the same time, geopolitical instability and supply chain fragility are accelerating the regionalization of trade. As companies localize operations to reduce exposure, competition is shifting from global to regional, introducing new players and increasing pressure in domestic markets. This shift is particularly disruptive for firms that previously relied on global scale as a competitive advantage.

In asset-heavy segments like shipping and aviation, competition is more likely to emerge through M&A activity. However, even these sectors are being reshaped by political and environmental forces that affect asset values and operational viability.

The uncertainty around tariffs, regulation and technology is also creating hesitation. Many firms are delaying long-term investments, creating a vacuum that more agile competitors are quick to exploit. To stay ahead, organizations should embrace innovation, invest in digital capabilities and remain flexible in their strategic planning.

Workforce Challenges and Opportunities: Adapting to a New Era

The sector is facing an inflection point in workforce dynamics. Aging populations, low recruitment rates and the looming impact of automation are converging to create a talent squeeze. Roles in trucking, warehousing and freight operations have long been difficult to fill. They are often physically demanding, socially isolating and now increasingly perceived as short-lived due to the rise of autonomous technologies. In the UK, for example, the average age of heavy-goods-vehicle drivers is over 50, with retirement outpacing recruitment.

This challenge is compounded by a broader transition period in which companies and workers alike are unsure of what the future holds. Traditional talent pipelines are drying up, and the education system has yet to adapt to the skills required for the next iteration of the industry. Many workers are hesitant to enter roles that may be displaced within a decade, and employers are struggling to plan amid uncertainty.

Yet this disruption also presents an opportunity. AI and automation are already reshaping warehousing, freight brokerage and even driving roles. Some firms operate nearly fully automated facilities, and autonomous vehicles are beginning to change the profile of logistics operations. To thrive, organizations must adopt agile business models that allow them to pivot quickly, invest in reskilling and embrace emerging technologies. Workforce planning should go beyond recruitment and focus on retention, retraining and aligning insurance and benefits programs with evolving needs.

What Sets Resilient Organizations Apart?

The pace of change in today’s environment requires a strategic response. Here are some actions to consider to help your organization thrive:

1. Match Risk to Capital Strategically

Look beyond traditional insurance programs and take a strategic approach to risk transfer. Use data and analytics to model your exposures and identify how much risk to retain and how much to transfer tonsure capital is deployed where it delivers the greatest impact. Align coverage with operational realities and emerging exposures, whether through reinsurance, parametric solutions or access to broader capital markets. This can help to manage volatility and unlock cash that can be used elsewhere.

2. Invest in Technology to Address Competition but be Wary of Evolving Exposures

AI and automation offer major advantages, but they also introduce cyber vulnerabilities and operational complexity. Balance innovation with caution, embedding cyber security, training and risk oversight into every deployment. Ensure cyber insurance programs are up to date and reflect the evolving threat landscape, including AI-enabled attacks and supply chain exposures.

3. Partner with Industry-Specific Risk Experts to Create Custom Solutions

Collaborate with specialists who understand the nuances of the industry, from the insurance implications of autonomous fleets to the risk transfer needs of multi-modal logistics hubs. Advisors with deep sector knowledge can help structure smarter insurance programs, match risk to capital effectively and help you navigate emerging threats with confidence.

Why It Matters

The transportation and logistics industry faces growing complexity, but those that respond with clarity and confidence can gain real advantage. By aligning risk strategy with business goals, investing in the right capabilities and staying adaptable, organizations can turn uncertainty into momentum and lead the way in a changing market.

¹ Peter Foster, “Shipping industry enlists AI to tackle rising number of cargo fires,” Financial Times, September 14, 2025.
² Foster, “Shipping industry enlists AI.”

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