Volatility is structural, not cyclical: what the 2026 State of Logistics Report means for supply chain operators

U.S. business logistics costs totaled $2.4 trillion in 2025, equal to 7.8% of GDP. That is a decline from $2.6 trillion and 8.7% of GDP the year before, but the number does not tell the full story. The 2026 State of Logistics Report, authored by Kearney and presented by Penske Logistics for the Council of Supply Chain Management Professionals, frames the reduction not as a return to stability but as a signal that the operating environment has fundamentally changed.

Five structural forces, not a demand cycle

The report identifies five forces that are not cyclical and show no signs of resolution: asymmetrical global growth, tightening financial conditions driven by persistent inflation and rising public debt, accelerating geoeconomic realignment, labor market and productivity constraints, and energy price volatility. Taken together, they disqualify the standard playbook of waiting for demand recovery and leaning on network scale.

Regional divergence is stark. The United States projects 2.2% to 2.4% growth for 2026, while India and Southeast Asia lead global expansion, according to FreightWaves. Europe trails at roughly 1%, and GCC economies have turned negative, contracting 1.2% as Middle East conflict disrupts energy flows. Those regional gaps carry direct implications for trade lane selection and carrier network footprint.

The Strait of Hormuz has become the single most consequential chokepoint in the current environment. The report notes it carries 20 million barrels of oil per day and 20% of global liquefied natural gas trade. Any operational disruption there ripples immediately into fuel surcharges and carrier rate negotiations. Tariff policy compounded the uncertainty: it changed on average every 1.5 weeks in 2025, creating what the report describes as a paralysis effect on network reconfiguration decisions.

AI moves from pilot to commercial deployment

The report draws a clear line between evaluation and application. AI is now delivering measurable commercial returns in specific logistics workflows. The framework it uses is four-part: interpret network signals, predict disruptions, recommend actions, and execute workflows. The interpret and predict layers are the most mature, built on years of investment in visibility platforms and telematics. The execute layer, covering warehouse robotics and autonomous vehicles, is where some of the industry's most visible commercial milestones are currently appearing, according to FreightWaves.

Adoption is not uniform, and that gap matters. Organizations that have embedded AI into core operations are widening their performance advantage over those still running isolated point solutions. For procurement and operations leaders, the implication is practical: a point solution that automates one workflow without integrating into the broader network yields diminishing returns as volatility increases.

Air and rail freight diverge by corridor

Air freight posted record cargo volumes globally in 2025, with demand up 3.4%, but corridor-level results varied sharply. The Asia-Europe lane surged 10.3% as shippers rerouted around maritime disruptions, while Asia-North America slipped 0.8%, according to FreightWaves. Early 2026 showed acceleration, though rising fuel costs introduce a new constraint on those gains.

On the rail side, India offers a concrete data point. Indian Railways reported freight volumes of 142 million tonnes in June 2026, a 4% year-on-year increase, according to Logistics Outlook. That growth is being reinforced by capital investment: a INR 499-crore rail-doubling project is underway to expand freight capacity in Bihar, per Logistics Outlook. Both figures illustrate how emerging-market rail infrastructure is becoming a more active routing variable for operators managing Asia-based supply chains.

Port and container capacity shifts in South Asia

Two developments in Indian ports in recent weeks reflect the broader geoeconomic realignment the report describes. Adani Ports sold a 49% stake in Vizhinjam Port to MSC's Terminal Investment Limited for $1.397 billion, a transaction that brings one of India's newest deep-water transshipment hubs into the MSC global network, according to Logistics Outlook. Separately, Maersk unveiled its first Indian-manufactured shipping container at an event attended by Union Minister Sonowal, also reported by Logistics Outlook. Both moves represent investments in supply chain infrastructure that will affect routing decisions and capacity availability for shippers operating in or through the Indian Ocean region.

What this means for your team

• Audit your network reconfiguration triggers. With tariff policy changing every 1.5 weeks on average in 2025, static network models are a liability. Build a review cadence tied to policy signals, not annual planning cycles.
• Evaluate AI adoption depth, not breadth. The performance gap is between organizations with AI embedded in core workflows and those running point solutions. Audit where your tools actually sit in that spectrum.
• Reassess Strait of Hormuz exposure. With 20% of global LNG and 20 million barrels of oil per day transiting that chokepoint, any procurement team with energy-linked cost structures needs a defined contingency for sustained disruption.
• Track South Asian port capacity expansion. The Vizhinjam-TiL deal and Maersk's Indian container manufacturing signal a structural shift in Indian Ocean routing options that will affect transhipment lead times and carrier contract negotiations over the next 12 to 24 months.