This issue's key takeaways:

• To build a more resilient supply chain, enterprises should expand how they engage and assess their supplier base.
• Financial health visibility, transparent communication, and a willingness to collaborate are key ingredients to consider.
• Unprecedented, systemic supply chain risk demands a strategic response framework that’s proactive, data-based, and nimble.

Risk Trivia: The Price (of Gas) is Wrong

According to AAA’s fuel price tracker, which is updated daily, the average price of a gallon of gas is currently $4.55. Diesel is $4.65. That’s a lot of dough for fuel. Let’s hope prices, unlike bread, stop rising, asap.

Which leads us to today’s trivia question: what is the record for highest average cost of gas in the U.S., and what year was it?

A high-five if you get one right. A fresh baguette if you get both.

Snapshot:  Why Supplier Relationships Matter More Than Ever, and How To Make Them Stronger

By James H. Gellert, Executive Chair, RapidRatings

A consistent theme of the past year is the intense operational pressure supply chains have been under, caused by a roiling mix of economic turbulence, geopolitical uncertainty, and technological disruption.

To sustain and survive, enterprises need to view their supplier base through a wider lens, one that expands the relationship beyond a narrow dynamic focused solely on cost optimization.

Today we’ll look at strategies for building supplier relationships strong enough to withstand and even flourish during times of persistent instability and global upheaval.

A Brief Summary of a Rocky Landscape

The ongoing financial and political turmoil of the day has been a recurring topic in The Risk & Resiliency Report, but it’s still worth quickly stepping back for a big-picture view of the incredible strain exerted on today’s supply chains.

Here are several major factors impacting global supply chains:

• A global trade war featuring tariffs, trade restrictions, sanctions, and market unpredictability.
• Multiple wars and geopolitical conflicts that have created far-reaching logistical chaos and economic upheaval. The most high-profile example, the closing of the Strait of Hormuz as a result of the U.S. war with Iran, has cut-off 20% of the world’s fuel supplies.
• Inflation and cost increases for raw materials, energy, labor, and transportation.
• Higher interest rates which have made securing financing more difficult and limited suppliers’ ability to add much-needed infusions of capital.
• The rapid integration of AI, which, despite benefits, demands massive investment while adding a layer of complexity and uncertainty to supply chain management.

The cumulative effect is a dire business environment for suppliers, who are expected to meet production and delivery demands while juggling skyrocketing prices, patchwork sourcing networks, and a rigid payment climate.

Obviously, this isn’t just a problem for suppliers. A vulnerable supplier base weakens entire supply chains and threatens the health of not only large enterprises and buyers but industries as a whole.

So, with that gloomy bit out of the way, how can organizations create a more financially resilient, operationally flexible supplier base?

Evaluate and assess your supplier base

My apologies to anyone who dislikes a sports metaphor, but building a reliable supply chain is similar to putting together a winning basketball team. For example, a basketball roster needs a balance of size, skills, and experience, otherwise its weaknesses will quickly be exposed and exploited. A team of all centers has a height advantage but lacks speed and dribbling. A team of only small guards will struggle to defend bigger opponents, rebound, and score.

The same is true of a supply chain. A supply chain consisting solely of small vendors with shaky financials is vulnerable, as is one in which every supplier uses the same transportation or distribution network. Ideally, a supplier base should include a diverse pool of vendors varying in size, location, specialty, and capacity.

Before you can accurately determine whether to pursue, extend, or terminate a supplier relationship, it’s crucial to have a cohesive vision for how the complete supplier network fits together.  Segmentation is one way to evaluate your supply base.

Segmenting the supply base into smaller tiers or groups based on what service they provide, how crucial that service is, how much financial risk they carry, etc., informs a more holistic supplier assessment process.

This process can illuminate areas of weakness, risk, and redundancy in the supplier base, and going forward provides a roadmap for which type of suppliers to add, or avoid.

A nuanced, data-driven evaluation of the supplier base can also reveal specific areas where a supplier may need extra support and guidance.

Rely on data, not a hunch

Often, choosing a supplier boils down to a simple question: who’s offering the best price? Other times, suppliers are hired based on second-hand information, word of mouth, or a vague optimism fueled by hope but lacking in hard evidence.

There’s no shame in any of the above approaches, but today’s tighter margins and harsher financial conditions call for a higher standard of discernment. That means taking advantage of powerful financial health analytics, not only to assess suppliers but to uncover value by maximizing organizational intelligence across every facet of risk management.

The RapidRatings platform assesses comprehensive financial records with predictive data analytics, giving enterprises a granular and highly accurate picture of their suppliers’ financial health.

Data for data’s sake is fine, but fully utilizing financial health intelligence doesn’t just sound good it creates positive outcomes.

Increased transparency helps enterprises detect and respond to potential disruptions sooner, give suppliers targeted support when needed, and avoid serious risk scenarios.

Communicate, Collaborate, and Innovate

A strong relationship with a supplier is like any strong relationship (don’t worry, no more sports metaphors). For both parties to be satisfied, effort needs to be spent earning respect, building trust, and finding shared goals and a common purpose.

To accomplish this, organizations can’t get stuck in an outdated mentality that views suppliers as an afterthought, a data point on a dashboard. A healthy supply chain is impossible without sturdy suppliers, whose bottom line is being squeezed from all directions.

Thinking outside the box invites creative solutions to sustaining strong supplier relationships during tumultuous periods.

Improving communication can be a bulky, vague directive if it's not supported by a set of clear steps. Here are actionable steps for strengthening communication.

• Designate a staff position for managing supplier relationships.
• Establish a regular check-in schedule so that updates or concerns can be discussed.
• Have an agreed upon process for handling production delays, payment issues, and term negotiations.
• Collaborate on a performance matrix that outlines and tracks key measurements for each party.
• Implement a notification protocol in the event of a serious disruption.
• Create a shared dashboard for reviewing real-time production output, inventory levels, and projected changes.

A collaborative partnership includes not only transparency, but a willingness, if not a desire, for the other’s success. This means using financial health data not as a threat, but as a means of improving a supplier’s long-term solvency. Enterprises and suppliers that share financial information are more data-rich than competitors that don’t, and that additional data can translate into system improvements that benefit both sides.

Lastly, innovation is about more than inventing something new. Innovation, in the context of building more resilient supplier relationships, includes trying methods that for whatever reason, weren’t seen as feasible or realistic in the past.

This can include offering faster payment terms, flexible invoicing for critical suppliers, diversifying supplier networks, designing risk-sharing arrangements, and more. As the challenges to supply chain continuity rise, so too must a creative approach to sustaining networks in all possible ways.

Stat of the month: 1.82

The Global Supply Chain Pressures Index (GSCPI) represents how intense global manufacturing and transportation networks disruption is at a given time.

Provided by the Federal Reserve Bank of New York, the GSCPI integrates a range of metrics including maritime shipping data, airfreight costs, and Purchasing Managers’ Index (PMI) surveys from seven major economies.

According to Yahoo Finance, the GSCPI reached 1.82 in April, its highest level since hitting 1.86 in July of 2022. Just a month earlier (March 2026), the GSCPI was 0.68, a dramatic spike which indicates amplifying stress levels across global supply chains. And that’s the stat of the month.

Trivia Answer: $5.02

So, it turns out that the record for highest average cost of gas occurred a not very long time ago, in a galaxy not very far away.

In June of 2022, due to runaway inflation and Russia’s invasion of Ukraine, energy prices exploded which raised the average gas price nationwide to $5.02, breaking the $5 barrier for the first time. Give yourself a high-five, or a fresh baguette, if you got it right.

Hopefully, that record will last forever. May the force be with us.

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.