As uncertainty in the market continues, supply chain leaders are making defensive moves.
According to findings from the West Monroe Quarterly Supply Chain Poll, most respondents (89%) adjusted their supply chain operations in the first quarter of the year, with more than half altering their product, materials, or sourcing mix. Seventy-eight percent increased their inventory levels, indicating a preparation for tariffs, disruption and geopolitical tensions.
The poll, conducted March 18-24, surveyed 250 industry leaders across manufacturing, retail and distribution to evaluate how they’re responding to disruption.
In its earnings call regarding Q1 2025 financial results, J.B. Hunt (CCJ Top 250, No. 3) noted that they hadn’t projected the long-term impact of tariffs on freight demand with customers planning for multiple scenarios and thus has created a waiting game.
“The magnitude and timing are difficult to predict,” said Spencer Frazier, J.B. Hunt executive vice president of sales and marketing. “Our customers continue to plan for multiple what-if scenarios, but most of them are waiting for the dust to settle on their short- and long-term business strategies.”
Some customers are considering modifying sourcing strategies. Frazier added, “As part of this scenario planning process, some customers are considering ways to alter and/or their country-of-origin sourcing (inventory).”
Heather Mueller, chief client strategy officer at Breakthrough, said they have observed similar shifts.
“Some are expanding their network of carrier partners to be more flexible, while others are doubling down on trusted relationships to better manage volatility.
“These shifts aren’t just operational, they have ripple effects on product flow, freight patterns, energy costs, and port utilization,” Mueller said, noting that the trends they observed in Q1 reflect a transportation market that’s evolving in response to global pressures.
This also aligns with Breakthrough’s findings, which surveyed 500 transportation industry leaders, who said they believe their organizations are prepared to adapt to future disruptions. When asked why, 50% cited access to reliable market data that helps them anticipate and respond to disruptions, while 47% pointed to diversified networks of carriers or shipper partners, which offer flexibility and a buffer against capacity crunches or regional slowdowns.
The takeaway, Mueller pointed out, is diversification is emerging as a dominant strategy.
“For shippers, it looks like diversification of transportation modes and, in some cases, carrier partners in preparation for the expected market flip," she said. "For carriers, it’s capitalizing on market events to diversify their customer bases. For both groups, working with a diverse group of partners is a top factor in their ability to remain resilient.”
[Related: Shippers and carriers brace for cost pressures and sustainability challenges]
The short-term gain
Despite volatility, West Monroe’s findings highlighted that there’s optimism and confidence amongst supply chain leaders, with 72% of respondents noting that the Trump Administration is improving their company’s supply chain operations, whilst 13% say it is complicating them.
Brian Pacula, partner of operational excellence at West Monroe, and co-author of the poll, noted those sentiments as unexpected. He said respondents likely have a more domestically focused supply chain, making them less susceptible to the negative effects of tariffs.
“I believe this is a short-term effect since eventually the effects of tariffs will be felt by all, including domestic manufacturers,” Pacula said. “This could manifest as increased costs of goods as upstream suppliers may be impacted or rising transportation costs if domestic production increases and, in turn, increases the demand for shipping, inflating costs.”
It also signals that companies are becoming more agile by adapting quickly and strategically despite ongoing uncertainty, Mueller said. However, she noted, “It’s important not to mistake this as a permanent advantage. While the gains some companies are seeing may be real, they are often fragile.”
Constantly shifting economic, geopolitical, and regulatory environments are requiring businesses to remain vigilant and responsive, Mueller added.
