Supply Chain Resilience in Europe: Forging Competitiveness Amid Disruption from the 37th Logistics Status Report

The New Normal of Global Supply Chains: From Efficiency至上 to Continuous Adaptation

In July 2026, the Council of Supply Chain Management Professionals (CSCMP) and Kearney jointly released the 37th State of Logistics Report. This annual report has long been regarded as a barometer for the global logistics industry, and its core theme — "Forged in Disruption" — marks a fundamental shift in industry thinking. The report clearly states that long-term five-year plans are no longer applicable, replaced instead by the ability for "continuous adaptation." Although the report focuses on the U.S. market, the five structural forces it identifies — asymmetric global growth, tightening financial conditions (inflation and rising debt), reconfiguration of geopolitical trade and capital flows, labor and productivity constraints, and sustained volatility in energy prices — also deeply impact the European supply chain landscape.

For the European business community, the value of this report lies not only in the data itself but also in how it demonstrates the way leading companies transform disruption into competitive advantage. European supply chain managers face similar, or even more complex, challenges: the energy crisis following the Russia-Ukraine conflict, compliance costs from the Carbon Border Adjustment Mechanism (CBAM), and the diversification of supply sources driven by the EU's Critical Raw Materials Act. The U.S. experience shows that merely pursuing low-cost efficiency is no longer sufficient to guarantee competitiveness; resilience, pricing discipline, and digital productivity are becoming the new moats.

Lessons from European Logistics Costs: Rebalancing Efficiency and Resilience

The report shows that in 2026, total U.S. business logistics costs as a percentage of GDP fell to 7.8%, down from 8.7% in 2025. This ratio is far below the 19% before trucking deregulation in 1979, reflecting long-term efficiency improvements. However, logistics costs as a percentage of GDP in Europe are typically higher (according to European Commission data, approximately 9–12%), partly due to higher fuel taxes, infrastructure fragmentation, and labor market rigidity. Trends in the U.S. report — shifting from "network debt" to "network drift" — carry a cautionary message for Europe. "Network debt" refers to inefficiencies caused by delayed redesign, while "network drift" refers to the gradual weakening of supply chain performance due to passive adjustments. If European companies continue to use ad-hoc measures (such as frequently changing suppliers or hoarding inventory), they risk falling into a trap of long-term declining competitiveness.

The report specifically notes that the pace of trade policy changes has reached a frequency of "once every 1.5 weeks on average," making tariff complexity a permanent variable. For European manufacturing sectors that rely on global trade (especially automotive, chemical, and machinery industries), this means that traditional annual procurement negotiation models must give way to more dynamic sourcing strategies. The EU's ongoing "open strategic autonomy" policy requires companies to find a new balance between diversifying supply and regionalizing production.

AI and Automation: From Experimentation to the Tipping Point of Value CreationOne key finding from the report is that artificial intelligence has shifted from the experimental stage to measurable business value. AI creates value through four capabilities: explain, predict, recommend, and act, but adoption rates remain uneven. In the United States, leading companies have embedded AI into core workflows, while many organizations still remain in isolated pilot stages. The situation in Europe is similar, but the regulatory framework of the EU's Artificial Intelligence Act (AI Act) may have a dual impact on AI applications in supply chains: on one hand, increasing trust and standardization; on the other, raising compliance costs.

In terms of labor constraints, the annual turnover rate in the U.S. warehousing industry remains above 40%, and companies are accelerating automation and digitalization investments. The labor shortage in Europe is even more severe. The German Logistics Association (BVL) estimates that the German logistics industry needs to fill about 100,000 job vacancies each year. This creates market opportunities for European automation solution providers (such as KUKA and Grenzebach) and warehouse robotics startups (such as Exotec and Magazino). The report emphasizes that asset productivity is more important than network expansion, which is particularly crucial for European SMEs with tight financial constraints.

Implications of Logistics Mode Evolution for Europe

The report's in-depth analysis of various transport modes also provides specific references for Europe:

• Trucking: The U.S. full truckload market is undergoing a supply-driven reshaping, with approximately 89,000 carriers exiting since 2022. European trucking also faces capacity constraints (due to driver shortages and carbon emission regulations), and the transition to zero-emission trucks driven by the EU's European Green Deal will further change the cost structure. Leading U.S. shippers are shifting to dynamic procurement strategies, and European companies can learn from this practice, for example, using digital freight platforms (such as DB Schenker's Connect 4.0) for real-time capacity matching.

• Railway: The merger case of Norfolk Southern and Union Pacific mentioned in the report (if successful, it would form the first coast-to-coast single-line network in the U.S.) has sparked a debate on competition and service. European rail freight has long faced cross-border coordination difficulties. The EU's ongoing 'European Year of Rail' initiative and the construction of a single railway area aim to lower these barriers. The U.S. case suggests that mergers may bring efficiency gains but require careful regulation to ensure market competition.

• Air Freight: Global air freight volume is expected to grow by 3.4% in 2025, but regional differences are significant. The report points out, "Air freight is shifting toward high-value density goods, with speed and reliability prioritized over transport costs." This is crucial for Europe's pharmaceutical, luxury goods, and electronics industries. At the same time, rising requirements for sustainable aviation fuel (SAF) add cost pressure. The EU's ReFuelEU regulation requires SAF usage to reach 5% by 2030, which will further drive high-value goods to shift to sea or land transport alternatives.- Maritime: Global container shipping capacity is in surplus, but bottlenecks in the Red Sea, Panama Canal, etc., provide short-term rate support. Europe faces a unique risk from its reliance on the Suez Canal, and geopolitical turmoil forces companies to consider alternative routes such as the Cape of Good Hope or the China-Europe Railway Express. The concept of "network drift" in the report is particularly applicable here: passively adjusting routes may temporarily solve problems, but in the long run, it could erode network efficiency.

• E-commerce and Last Mile: The U.S. cancellation of the de minimis threshold for Chinese parcels has led to an approximate 85% decline in daily air freight volume, prompting companies to shift toward domestic fulfillment. Although Europe has not fully replicated this policy, the EU is discussing the removal of VAT exemptions for imported goods under €150. This will impact e-commerce platforms reliant on cross-border direct shipping (e.g., AliExpress, SHEIN) and accelerate the layout of European local warehousing. In 2025, U.S. last-mile rates rose by an average of 5.9%, and Europe faces similar pressures from rising labor costs and zero-emission zone restrictions.

• Third-Party Logistics (3PL): The report believes the 3PL industry is reaching a "strategic inflection point," where customer demands are shifting from transaction execution to end-to-end coordination. European 3PL giants (e.g., DSV, Kuehne+Nagel) have expanded scale and density through acquisitions and embedded AI-powered visibility tools. This trend aligns with the EU's "European Data Strategy," but compliance requirements for cross-border data flows (e.g., GDPR) remain a challenge.

Strategic Recommendations for European Policymakers and Businesses

Based on the analytical framework of the 37th Logistics Report, European decision-makers and businesses can take the following priority actions:

1. Embed resilience as a normal cost: The European Commission should continue to promote supply chain stress tests and early warning mechanisms, while incorporating "resilience budgets" into industrial policy subsidies (e.g., the Temporary Framework for State Aid). Companies need to consider redundant capacity and alternative routes when redesigning networks, rather than solely pursuing minimal inventory.

2. Accelerate AI and automation investment: The EU should leverage the "Digital Europe Programme" and "Horizon Europe" funds to support AI applications in logistics, especially promoting digital twins and predictive analytics among SMEs. Companies need to elevate AI from pilot projects to core operational tools and ensure compliance with the AI Act requirements.

3. Promote workforce transformation: European countries should strengthen vocational training in logistics, particularly in skills such as electric vehicle maintenance and automated system management. Companies can learn from the U.S. "automation-first" strategy while also paying attention to social acceptance.

4. Leverage green transition for competitive advantage: The EU's green policies (e.g., CBAM, REPowerEU) present both costs and opportunities. Companies that first deploy zero-emission trucks and sustainable aviation fuel may gain first-mover advantages. The report emphasizes that "energy price volatility is a structural force," and European companies can hedge risks by locking in long-term renewable energy purchase contracts.5. Strengthen EU Internal Coordination: Railway integration and customs digitalization can eliminate cross-border logistics efficiency bottlenecks. The U.S. railway merger case suggests that Europe needs to find a balance between scale and competition. The EU's "Single Window" customs environment plan should be accelerated to reduce the risk of "network drift."

Conclusion: Adaptability is the Most Enduring Competitiveness

The core message of the 37th Annual Logistics Report is that disruption is no longer the exception but a permanent feature. For Europe, this means moving beyond mere observation of the U.S. market and transforming its own structural issues (fragmentation, regulatory complexity, labor rigidity) into adaptive advantages. European companies should redefine their core competitiveness—not as scale or lowest cost, but as the ability to rapidly reconfigure networks. As the report's author, Kearney partner Korhan Acar, stated: "Companies that combine resilience, productivity, and digital intelligence will lead the future." Europe stands at the same crossroads, and the window for action is narrowing.