A majority of logistics and supply chain leaders expect U.S. economic slowdown, as geopolitical risks and supply chain costs surge, according to a survey released by LaRocco Consulting Inc., in partnership with AlixPartners.
"What struck me most from this survey was the consensus on instability,” says Erik Mattson, partner at AlixPartners. “The leaders in this room are no longer planning for a return to calm. They are building operations designed to absorb disruption, and that shift from efficiency-first to agility-first is the defining change in global logistics right now."
“This directly increases transportation costs for logistics providers and shippers worldwide,” says Lori Ann LaRocco, creator and moderator of the Containers Don’t Lie Symposium and president of LaRocco Consulting, Inc. “These costs, which are paid by companies, are then traditionally passed on to the consumer. It takes between three and nine months to see those price increases. The higher-priced items sit in the warehouse until they are needed for replenishment. This is what I call ‘inflation brewing in the warehouse.’ There is a delay in consumers getting hit with the price increase.”
Key takeaways:
• 52% of respondents expect the U.S. economy to weaken in the next six months, with 24% predicting a recession by year-end 2026.
• The Middle East conflict is cited as the biggest business impact (41%), with ongoing Iran/Hormuz and Red Sea/Suez Canal disruptions seen as the top near-term risks.
• 53% say war-related surcharges and tariffs have increased supply chain costs by 10-20%.
• Fuel is the top source of inflationary pressure in logistics and supply chains (58%), followed by raw materials (24%) and freight costs (18%)
• 46% are not currently using AI in supply chain decision-making. Inflation and economic pressures were top concerns, the study found.
· More than 70% of respondents said they expect the global economy to weaken, and every single respondent named the Iran/Hormuz conflict as a near-term threat.
· Fuel was the leading source of inflationary pressure in logistics and supply chains, with nearly 60% of survey respondents identifying it as their top concern.
· More than half of respondents (59%) said the outcome of the U.S.–China trade war over the next 12 months was too unpredictable to call.
· Where AI is implemented, it is most often leveraged for cost reduction and procurement efficiency (41%), followed by demand forecasting and scenario modeling. However, significant barriers hinder broader adoption, including fragmented or inconsistent data quality (23%) and a lack of internal talent or AI expertise (29%).
· While some organizations have begun embedding AI in select workflows or using standalone tools, the majority have yet to realize measurable value, underscoring the need to invest in data infrastructure and talent development to unlock AI's full potential in supply chain operations.
