Leaner, Smarter, Faster, and More Connected

Welcome to Supply Chain Deep Dive, where innovation meets execution in the world of supply chain management. Join hosts Michael Jung and Jess Williams as they explore cutting-edge strategies and transformative trends.

Welcome to the Deep Dive. We're here to, uh, basically take a huge stack of global research and boil it down to what you really need to know.

Yeah, and today we've got something pretty substantial.

We do. We're cracking open the results of this major global survey. It was done back in March 2025 by Reuters Events and Cargowise.

Right. Over 450 logistics and supply chain pros weighed in, a really solid group.

So this deep dive, it's essentially your blueprint, right? Not just what's happening now, but where leaders are putting their money for the future.

Exactly. It shows where those multimillion-dollar bets are going.

Okay, so our mission today, pull out the key strategies. How are supply chains actually adapting to, well, all this chaos, the volatility, the cost pressures.

And where the budgets are really going for 2026 and beyond. That's the crucial bit. Look, if you're running a global business now, you feel it. You feel the squeeze. Global supply chains, they're definitely at this pivotal crossroads.

You've got the geopolitics, shifting trade rules.

And margins just getting tighter and tighter. But what's really striking here, what jumps out from the data, is the number one strategy. It's crystal clear.

Which is—

immediate structural cost control. That's dominating everything. And that focus changes the whole game.

OK, let's unpack that. Strategic risk.

Yeah.

It's changing. When we used to think supply chain risk, what came to mind?

Oh, hurricanes, port strikes, maybe a factory fire.

Yeah.

Operational stuff.

Right. Canal blockages, physical things. But what stands out now in this data, it feels like a fundamental pivot, almost uncomfortable.

It is. You nailed it. It's shifted. Risk is less operational now, much more political and regulatory.

So the survey backs this up strongly.

Oh, absolutely. It confirms this huge shift. We can basically say the new battlefield isn't the ocean, it's the government building. Policy, not port congestion, is what's driving the volatility looking towards 2026.

It's pretty stunning to see transport disruption, you know, the classic villain falling so far behind politics. What were the actual numbers on that?

Yeah, the numbers are stark. 74%, nearly 3 quarters, pointed to geopolitical tension as the top threat.

74%?

Wow. Yeah, and right behind that, 59% flagged regulatory and policy changes. Transport disruption? Way down, only 38%.

So, less about ships getting stuck, more about rules changing overnight.

Exactly. It proves policy and trade friction are the big drivers now.

Okay, but here's where it gets really interesting, right? Because these threats, they aren't felt the same way everywhere. It depends on where you are in the world.

That's a key point. The risk profile is definitely not uniform.

Like in North America.

Right, North America. 71% are worried about shifting US trade policy. That's huge.

Things like tariffs?

Tariffs, yeah, but also things like de minimis thresholds, which, you know, for anyone not familiar, that's the limit for duty-free stuff coming in. Super important for e-commerce costs.

Okay, so a change there hits the bottom line instantly.

Instantly. So North America is looking at customs rules.

While Asia Pacific is still more focused on the physical side.

It's exactly right. In APAC, 54% put transport disruption top. That's what, 20 points higher than North America or EMA?

Which makes sense given its role in global shipping.

It reflects that central role. Physical bottlenecks there just ripple outwards immediately.

And Europe, EMEA had its own specific worries.

Yeah, labor shortages. 1 in 4 respondents in Europe flagged that.

So not just strikes, but actually finding people.

Finding people.

Yeah.

Tightening labor markets. It's apparently constraining manufacturing in places like Germany, Poland. It's another layer of cost on top of the politics.

Okay, so environment, highly volatile, driven by politics. Logically, you'd think the response is build resilience, more safety stock, but you hinted the number one priority isn't that.

It isn't.

The volatility is definitely here, but the top strategy Overwhelmingly is cost control.

How widespread is that struggle?

The research says 95% of leaders admit they're struggling to control costs.

Yeah.

95%. And half of those find it highly or extremely challenging.

That's basically everyone.

So, how far ahead is cost reduction compared to other things like resilience or sustainability?

It's way out in front. Cost reduction cited by 67%. Resilience building, That's next, but only 45%. And sustainability targets, way down at 20%.

Hold on, 20% for sustainability? Are they basically saying short-term survival trumps those longer-term goals? Isn't that risky in itself?

Well, that's the tension, isn't it? The report really highlights that leaders are clearly focused on immediate cost discipline.

It feels like the cost squeeze is seen as the more immediate existential threat than climate compliance, maybe.

It seems that way. The strategy isn't about building expensive buffers; it's about running leaner to absorb those sudden cost shocks from policy changes.

Okay, so if they're running leaner, not building huge reserves, how are they actually controlling costs? Are they just slashing everywhere, switching suppliers constantly?

No, it looks more surgical. Negotiating better carrier contracts and rates— that's seen as the most effective tactic. 72% said that.

Makes sense. What else? Right behind it is optimizing warehouse and inventory management. That's 67%. So, disciplined stuff, proven levers.

And interestingly, the data suggests they aren't just, you know, jumping ship to the cheapest option.

Exactly. Only about a third, 34%, are actually shifting to cheaper transport modes. Nearly 60% prefer to deepen ties with existing partners.

Hmm, so they're wary of the disruption that comes with big changes.

Seems like it. Maintaining those key relationships is almost a form of resilience itself. even when money's tight.

So, smart cuts, sustainable cuts, not just blunt force. Is technology the tool they're using for that precision?

Technology is absolutely the critical long-term lever. And here's the key thing: cost pressures are actually increasing tech investment, not stopping it.

Really? Even with budgets tight?

Yes. Digital transformation is a top priority for 71%. It seems volatile times now mean investing in tech for foresight, not cutting back.

And the budgets show that. It's not just talk.

The budgets reflect it. 64% expect their IT budgets to grow in the next year. Only 3%, a tiny fraction, expect cuts.

Why the investment? What are the expected benefits?

Well, top benefits are operational efficiency, 72%, and cost reduction itself, 66%.

Okay, efficiency and cost. But beyond that?

Better data-driven decisions, that's 63%, and improved visibility, 59%. They want to see what's coming.

So this is that move you hear about, from hindsight just reporting what happened to actual foresight. Predicting.

Exactly. That's the goal. Running leaner and being more resilient. It's driving big investment in forecasting and inventory analytics.

How big?

Over half plan to invest in those tools in the next 12 months. And inventory analytics—

Right.

Fastest-growing area, up 21% year on year.

And this is where AI comes in, presumably, making those tools predictive.

It is. AI takes it beyond basic reporting. It helps systems predict demand swings, suggest optimal inventory, maybe dynamically adjust sourcing or routing in real time.

Turning data into action.

Right. Concrete, predictive actions before a disruption blows up the finances.

Okay, but here's the paradox you mentioned earlier. Companies are pouring money into tech, they say it's a priority, but they're still struggling to get the full benefit. Why, if they're so focused on tech?

The problem isn't a lack of tools; it's too many tools. It's system sprawl, data chaos.

How many tools are we talking?

2/3 of companies use 3 or more major logistics platforms.

3 or more? Okay, that's already getting complicated, but you mentioned a worse stat.

Get this— 16%, 1 in 6, are juggling more than 11 distinct logistics tech platforms.

11! That's, that's not a tech stack; that's a nightmare. A Tower of Babel, like you said.

It really is a technical mess. And the result? Well, unsurprisingly, only 4% say their systems work seamlessly together. Just 4%.

So, all that investment, potentially wasted because nothing talks to each other?

That fragmentation just kills efficiency. Duplicated work, data stuck in silos, slow decisions— it eats away at the savings the tech was supposed to deliver.

So, what's stopping them from integrating? Is it money or something else?

It's mainly people and process, actually. The number one barrier, cited by 63%, is workforce skills.

Ah, not enough expertise.

Exactly. Companies underestimate the skills needed to actually integrate and use these sophisticated tools effectively.

And right behind skills?

Integration and interoperability itself. The technical challenge of connecting disparate systems, that's 62%. Budget constraints are there, sure, 54%, but they trail the people and the plumbing issues.

Right. Okay. Now, you mentioned connecting the dots. This deep dive also showed different strategies depending on who you are in the supply chain.

Yes, crucial differences between, say, manufacturers and retailers on one side and the logistics service providers on the other.

Let's clarify that. BCOs, Beneficial cargo owners. That's the shippers, the manufacturers, the retailers.

Right. Versus LSPs, logistics service providers. Your forwarders, carriers, 3PLs.

And the BCOs, the shippers, they're obsessed with data quality.

Absolutely obsessed. They need that foresight, that clean data to manage their inventory, predict demand.

And their challenges reflect that.

Yes. Their biggest tech challenge: data quality and standardization. 66% of them said that, and it matches their investment. BCOs were 25% more likely than LSPs to invest in forecasting and analytics last year. They need clean fuel for their prediction engines.

Meanwhile, the LSPs, the ones actually moving the goods, are focused elsewhere.

They're prioritizing execution and compliance. Moving stuff and handling the paperwork.

So, more investment in things like TMS?

Exactly. LSPs invested more in transport management systems, 45% versus 35% of BCOs, and also digital documentation. 40%. Their focus is on operational efficiency, compliance, streamlining the actual movement.

So, this difference, this divergence, it creates an opportunity, doesn't it, for collaboration?

A huge opportunity, untapped, really. Think about it, the LSPs have the real-time data— capacity, transit times, disruption info.

And the BCOs desperately need that data for their fancy analytics.

Precisely. So, the path forward for LSPs isn't just moving goods well; it's turning their operational data into a strategic asset. Better data sharing, better integration with their customers. That's key.

Okay, so let's wrap this up. This research seems to give us 4 pretty clear strategic takeaways for running a supply chain successfully in, say, 2026. Let's recap.

Number 1: Plan for inevitable uncertainty. Geopolitical shocks are the new baseline. Strategies need live scenarios, rapid diversification.

Number 2: Cut costs, yes, but smartly. Cut costs, not value. Focus on disciplined financial management, renegotiating rates, automating compliance, but don't kill the speed or capacity you'll need for future growth.

Number 3: Make technology the operating model. Embed AI, forecasting, analytics into daily work. Tech should drive strategy, not just support old manual ways.

And finally, number 4: Move from fragmentation to unification. Simplify the tech stack, standardize data, consolidate onto integrated platforms. Kill that Tower of Babel problem we talked about. Get Visibility.

Right, seamless visibility and execution.

So, bringing it back to you, the listener, looking ahead to 2026, what's the big takeaway? We heard inventory analysis, foresight— that's huge for BCOs. They need prediction.

But the LSPs, who often hold the critical real-time movement data, they're investing less there, focusing more on execution tools.

Which leads to a provocative thought.

It does. If the core problem is tech fragmentation and the core solution is tech-driven foresight, You have to ask yourself, how much vital insight, how much of that necessary foresight data, was currently stuck in a silo within your own organization?

Or worse, sitting with an operational partner who isn't prioritizing analytics in the same way you are.

Exactly. The real battle for efficiency in 2026— maybe it isn't just about buying the next shiny piece of tech. Maybe it's about forcing the tech you already have across your ecosystem to finally talk to each other.

Creating that unified flow of actionable information.

That's the challenge.

Yeah.

And the opportunity.