Supply Chain Costs to Rise Above Inflation

A new report, Kearney’s Supply Chain Navigator report, released last week, projects that global supply chain costs will rise in the range of 2.3% to 4% above inflation through 2026.

Even as container rates and commodity prices moderate, continuous cost pressure driven by structural forces in trade policy, critical minerals constraints, geopolitical friction, and elevated inventory levels creates a higher baseline than traditional cyclical indicators capture, notes Kearnery partner Rupal Deshmukh.  

As legal challenges reshape how tariffs may be implemented in the U.S., the report underscores that trade-policy risk itself, not just tariff levels, has become a structural cost driver across global supply chains.

"As supply chain becomes both more volatile and more critical to enterprise performance, the key message from our research is that companies must recognize cost pressures early, and upstream," notes Kearney partner and report co-author Rupal Deshmukh. "Cost pressure shows up before the P&L, which then must be translated to coordinated capability and decisions that are connected across planning, sourcing, and operations—the entire supply value chain."

The report identifies and measures four interconnected forces beyond the conventional drivers of supply chain costs that are exerting sustained pressure across industries and regions, contributing to the persistence of elevated supply chain costs beyond periods of disruption:

• Applied tariff rates, which have risen 30% on average
• Critical minerals exposure by industry: global exports have decreased by one-third year over year
• Geopolitical risk, up 34% in the past year
• Global inventory dynamics, levels rising 14% in the past year

Acknowledging that global supply chains are now operating under an elevated cost structure due to these factors, the report lays out three patterns shaping operations performance for companies that are successfully navigating sustained pressure:

• Timing. Pressure is recognized earlier than financial results.
• Alignment. Decisions reinforce each other across the value chain.
• Technology and talent. These determine how well timing is converted to action.

"Despite the structural pressures our research has identified, seven out of 10 CEOs are expecting revenue growth of 10 percent or more this year," commented Kearney partner, global chair in the strategic operations and performance practice, and study co-author Suketu Gandhi.

"But to achieve this level of success, talent is a critical factor. Performance will depend on whether leaders and teams have the skills to interpret signals, challenge assumptions, and act across functions with discipline. While technology promises to expand visibility and speed, outcomes will ultimately depend on how effectively human judgment and coordination are applied.

"Supply chains are where superior performance is gained or lost. While businesses are adapting well, adaptation itself becomes another risk. Today's workarounds can quickly become tomorrow's constraints. Companies need to stage investments, regionalize supply chains, and prioritize flexibility."