Why This Matters to Distributors: Supply chain disruption is becoming a permanent business challenge. Distributors that improve visibility, productivity and automation may be better positioned to protect margins and maintain service levels as volatility persists.
U.S. business logistics costs fell in 2025, but distributors continue to face a supply chain environment shaped by persistent disruption, labor constraints, and rising pressure to improve productivity, according to the 2026 State of Logistics Report released this week.
The annual report, published by the Council of Supply Chain Management Professionals, found that U.S. business logistics costs totaled $2.4 trillion in 2025, down from $2.6 trillion the previous year. Logistics costs also declined as a share of gross domestic product, falling to 7.8% from 8.7%.
While lower logistics costs may provide some relief, the report concludes that volatility has become a permanent feature of supply chain operations, forcing distributors and other supply chain operators to continuously adapt their networks, inventory strategies, and technology investments.
The report, authored by consulting firm Kearney and presented by Penske Logistics, identified five structural forces reshaping supply chains: uneven global economic growth, persistent inflation and rising public debt, shifting trade flows and geopolitical realignment, labor and productivity constraints, and energy price volatility.
For distributors, those forces affect everything from transportation and inventory costs to product availability and customer service performance.
“These forces are no longer temporary disruptions, but enduring features of the operating environment,” Korhan Acar, a Kearney partner and lead author of the report, said in a statement.
The report also highlights a growing divide between companies that have embedded artificial intelligence into day-to-day operations and those still relying on pilot projects or isolated use cases.
Researchers said artificial intelligence is increasingly delivering measurable returns in forecasting, planning, decision support, and operational execution. However, adoption remains uneven across the supply chain sector.
That finding mirrors trends across wholesale distribution, where many companies are experimenting with artificial intelligence while a smaller group is deploying the technology across core business processes.
Labor shortages remain another challenge. The report found that companies are accelerating investments in automation and digital technologies to offset workforce constraints and improve productivity.
For distributors managing warehouses, transportation fleets and complex inventory networks, those investments are becoming increasingly important as labor availability remains tight and customer expectations continue to rise.
The report recommends that supply chain organizations focus on resilience alongside efficiency, prioritize asset productivity over network expansion, improve end-to-end visibility, and accelerate returns on automation and technology investments.
“The supply chain of right now is incredibly complex and requires a series of constant adjustments,” says CSCMP President and CEO Mark Baxa.
For distributors, the report’s message is clear: The goal is no longer to wait for supply chains to stabilize. Competitive advantage increasingly depends on the ability to adapt quickly, use technology effectively and operate profitably in an environment where disruption has become the norm.
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