From back-office to boardrooms: Procurement's role in navigating global turmoil

Source: Supplied. Paul Vos, Regional Managing Director: CIPS Southern Africa.

A wave of global disruptions, from the Covid-19 pandemic to geopolitical conflict and logistics bottlenecks, has forced organisations to rethink how they source, manage, and secure supplies.

Today, procurement sits at the heart of risk management, resilience, and operational continuity. Reflecting this evolution, the Chartered Institute of Procurement & Supply (CIPS) Southern Africa has launched its “Excellence That Moves the World” campaign, underscoring procurement’s growing influence in sustaining industries and economies worldwide.

“Procurement is no longer simply about managing purchase orders or negotiating costs,” says Paul Vos, Regional Managing Director: CIPS Southern Africa. “Today it is about managing risk, ensuring supply continuity, strengthening supplier ecosystems and helping organisations navigate global uncertainty.”

Few developments illustrate the strategic importance of procurement more clearly than the escalating conflict in the Middle East, which is already disrupting critical global trade routes.

The Strait of Hormuz, one of the world’s most important maritime chokepoints, carries around 20% of the world’s seaborne oil trade, making it central to global energy supply chains. Shipping disruptions in the region have already forced vessels to halt or reroute, with analysts reporting that around 170 container ships carrying approximately 450,000 TEU of cargo have been stranded or delayed near Gulf shipping lanes.

Trade routes disrupted

Meanwhile, conflict risks have prompted shipping lines to introduce war-risk surcharges of roughly $1,500 (about R27,750) per container, significantly increasing freight costs for businesses reliant on international trade.

The crisis is also threatening one of the world’s most critical shipping corridors. The Suez Canal and Red Sea trade route normally handles roughly 12–15% of global trade and nearly 30% of global container traffic, representing more than $1tn (about R18.5tn) worth of goods moving between Asia, Europe and Africa each year.

Disruptions to these routes have forced many global carriers to divert vessels away from the Red Sea, rerouting ships around the Cape of Good Hope, a detour that can add up to two weeks to shipping times and thousands of kilometres to trade routes.

The impact of the conflict is not confined to global shipping lanes; African economies are already experiencing knock-on effects.

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Speaking at the Africa Energy Indaba in Cape Town, President Cyril Ramaphosa warned that the escalating Middle East conflict is placing a growing strain on African supply chains and pushing up energy costs across the continent.

The warning follows earlier global shocks such as the Covid-19 pandemic and the Russia-Ukraine war, both of which exposed the fragility of global logistics networks and the vulnerability of import-dependent economies to geopolitical disruption.

For South Africa, these pressures are compounded by domestic logistics constraints. Port congestion, rail inefficiencies and infrastructure challenges continue to affect the movement of goods, particularly for export-driven industries such as mining, manufacturing and agriculture.

“In South Africa, procurement teams increasingly have to navigate both global and local supply chain disruption,” says Vos. “They must identify alternative suppliers, renegotiate logistics arrangements and build resilience into supplier networks in ways that simply weren’t necessary a decade ago.”

Commodity prices surge

The economic effects of supply-chain disruption are now spreading beyond logistics and into financial markets and commodity supply.

According to S&P Global Ratings, the escalation of hostilities in the Middle East is already starting to strain credit channels across multiple sectors, reflecting how geopolitical conflict can ripple through supply chains and financial systems simultaneously.

Commodity markets are also reacting to the disruption. For example, sulphur, a key input for fertiliser, chemicals and semiconductor manufacturing, has seen price increases of around 15%, affecting more than 44,000 companies globally that rely on the material for industrial production.

The growing complexity of supply chains is also driving increased demand for procurement expertise.

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The CIPS Procurement & Supply Salary Guide 2025, produced in partnership with recruitment specialist Hays, highlights persistent global shortages of procurement and supply professionals as organisations seek talent capable of managing supplier risk, sustainability compliance and supply-chain resilience.

“As supply chains become more complex and interconnected, procurement professionals are becoming central to organisational decision-making,” says Vos. “Businesses recognise that strong procurement capability can influence everything from operational stability to long-term competitiveness.”

Against this backdrop, the “Excellence That Moves the World” campaign aims to raise awareness of the profession’s expanding role in modern economies.

“The reality is that procurement excellence drives progress,” says Vos. “When procurement works well, businesses become more resilient, and economies are better equipped to withstand global disruption.”