A reordering of the COO and CSCO logistics agenda

From the November 2025 edition of Supply Chain Management Review.

November 2025

The November 2025 issue of Supply Chain Management Review explores the topics of global supply chain resilience, innovation leadership, and data-driven transformation. Highlights include strategies for building…

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Persistent volatility from tariffs, inflation, high borrowing costs, and geopolitical shocks has made disruption the operating baseline. Rate disparities, capacity swings, and mode-specific risks add more complexity.

The old agenda, once dominated by sourcing and cost levers, is transferring relevance to a broader set of priorities. Cost savings alone will no longer suffice in defining the reputation of a COO or CSCO.

Today’s leaders are judged on their ability to deliver across the following three fronts.

• Resilience: not only shock absorption, but also cost discipline, ensuring adherence to budgets while reducing concentrated sourcing risks
• Productivity: increasingly the way to create efficiency and competitiveness, with AI delivering immediate, pragmatic gains inside and outside the four walls
• Transformation: future-proofing supply chains through digital integration, ESG alignment, and network redesign

Quick wins such as mini-bids, customs hygiene, and automation are stabilizing operations and unlocking savings today. At the same time, leaders must invest in resilience, productivity, and transformation to ensure their supply chains can withstand disruption and generate a lasting advantage.

Resilience has vaulted to the top of the COO and CSCO agenda. Tariffs, shifting trade policies, and geopolitical instability are no longer episodic shocks. They define the operating environment. Ocean freight rates surged more than 50% on key lanes during tariff-driven frontloading, airfreight remains soft yet unpredictable, while U.S. road lingers at the bottom but could bounce back at any time. These swings expose how fragile networks become without the agility to flex quickly. The challenge is less about preventing volatility and more about absorbing it: safeguarding service continuity, mitigating cost exposure from price swings, and protecting against concentrated risks.

Leading companies are acting decisively. Many are diversifying their sourcing footprints with “China+X” strategies, reducing their dependence on concentrated sources. Others are tightening customs processes to eliminate hidden costs. Visibility investments are gaining traction: Coca-Cola Consolidated, for example, uses predictive tracking to provide real-time ETAs and improve delivery reliability. Structural flexibility is becoming the norm. Quarterly mini-bids give shippers leverage in volatile markets, expanded carrier portfolios reduce exposure, and scenario planning quantifies risks and aligns stakeholders on the value of preparedness.

 

Resilience, often seen as defensive, can instead be wielded as a competitive weapon. The benefits, such as disruptions avoided, customers retained, and costs contained, are often invisible, making investments harder to justify.

Scenario modeling helps bridge this gap by showing the cost of disruption and the ROI of preparation. Done well, resilience shifts from a hidden insurance policy to a visible driver of performance and trust. COOs and CSCOs who elevate shock absorption can withstand disruption and position their companies to outperform rivals in volatile conditions.

Operational advantage: Productivity is the next lever for competitiveness

The easy wins from sourcing have largely been taken. After years of freight recession, most companies have already squeezed rates to their limits. Today’s favorable market—truckload contract rates below prior-year levels and stable LTL pricing—offers only temporary relief. Sourcing and cost takeout are now an expectation, a baseline responsibility of every COO and CSCO. Sustained competitiveness requires going farther and unlocking productivity inside the enterprise.

Leading companies are already proving this shift. Walmart, DHL, and Coca-Cola are deploying autonomous bots and AI to streamline sourcing activities and redeploy talent into higher-value work. UPS has used AI-driven route optimization (ORION) to cut millions of miles a year, saving fuel and labor while improving on-time performance. Amazon applies robotics and AI in fulfillment centers to automate repetitive tasks, reduce cycle times, and free up human associates for quality and customer-facing work. Agentic AI is accelerating this evolution by automating transactional tasks and enabling teams to focus on planning, collaboration, and higher-value activities.

Productivity has shifted from incremental cuts to a source of structural advantage. Leading supply chains are redesigning processes and adopting digital tools that release capital, free capacity, and sharpen decision-making. AI plays a pivotal role by removing routine work while enhancing human judgment. Together, these changes create organizations that can redirect resources into resilience and transformation. In this context, operational advantage is not a one-off project but a continuous way of operating—keeping supply chains lean, adaptive, and positioned for growth.

Transformation: Redesigning for any eventuality

Transformation connects today’s resilience and productivity gains to long-term advantage. Disruptions have hardened supply chains, but they’ve also revealed a larger truth: yesterday’s networks and tools will not sustain the next decade. Trade flows are shifting, ESG pressures are intensifying, and parcel and last-mile expectations are evolving faster than legacy systems can adapt. Tariffs are forcing leaders to revisit Incoterms, bonded warehouses, and FTZ strategies, which are pain points felt acutely in medical devices, consumer electronics, automotive, and apparel, where globalized supply chains and high cross-border flows make exposure especially pronounced.

What’s new is that AI has moved from experimentation to delivering proven ROI in cost savings, productivity, and resilience across logistics. Leading companies are deploying modular agents built to address chronic transactional pain points such as freight audit and pay, rate management, spend analysis, lane and volume forecasting, carrier discovery and qualification, RFx preparation and launch, bid evaluation, negotiation and award, and contract and rate ingestion.

Reported outcomes include a 97% productivity improvement in freight audit, a 32% reduction in freight leakages, and faster bid cycles that sharpen carrier allocation. Early adopters are already deploying these capabilities at scale, automating hundreds of millions in freight spend and managing millions of shipments with real-time transparency.

At the same time, network redesign remains crucial. Leading companies are pursuing “China+X” sourcing models to spread risk and embedding sustainability directly into logistics, guided by ESG criteria for suppliers, routes, and facilities. Digital platforms and logistics knowledge graphs are adding another layer of adaptability, stitching together ERP, TMS, procurement tools, and unstructured data to create end-to-end visibility. In the last mile, the competitive landscape is diversifying: FedEx and UPS are on diverging paths, regionals such as OnTrac are gaining share, and gig-economy players such as DoorDash and Uber are reshaping expectations with crowdsourced flexibility. Predictive analytics and AI-enabled decision platforms help leaders navigate this fragmented market with agility.

Rather than predicting the next disruption, transformation means redesigning supply chains for resilience, sustainability, and digital agility. Companies that adopt modular AI agents, redesign networks for adaptability, and embed ESG into logistics will not only bend without breaking, but also capture growth that less-prepared rivals leave behind.

Hot topics as immediate catalysts

Tariffs, inflation, borrowing costs, and geopolitics dominate today’s headlines. They create turbulence, but they also show leaders where their networks are fragile. A poll of global heads of logistics confirms this: resilience and adaptability outrank both lowest landed cost and service as the top design principle for 2026. At the same time, executives admit the biggest driver of unplanned costs today is not freight rates, but volatile demand signals and forecast errors.

Hot topics evolve beyond short-term problems and act as catalysts. A tariff spike can reset sourcing or customs practices. Inflation presents an opportunity to strip out hidden costs. Higher interest rates sharpen the ROI bar, pushing leaders toward AI and automation with fast payback. And geopolitical shocks reinforce the case for diversified carriers and structured scenario planning. Quick wins in tariff hygiene, forecasting accuracy, or AI pilots demonstrate value while freeing resources to fund long-term resilience and transformation.

The COO and CSCO dual mandate

The mandate is clear: deliver results now, and build for what’s next. Quick actions such as tariff mitigation, AI-enabled productivity, better forecasting, and more agile networks are now essential. They are the foundation of future transformation.

Resilience and adaptability are the leading design priority, outpacing cost or service. Leaders are realistic about AI. ROI is most visible in demand forecasting and inventory optimization. But they also acknowledge the talent challenge: the most crucial next hire is a data scientist, far ahead of traditional logistics veterans or logistics profiles.

Future-ready supply chains demand more than cost control. They require resilience to withstand shocks and contain costs, productivity to release capital and capacity, and transformation to retool networks for ESG, trade shifts, and last-mile evolution. By committing to this agenda, leaders move beyond survival and turn uncertainty into a competitive advantage that rivals cannot match. 

About the authors

Michael Zimmerman is a Kearney Partner who focuses on logistics sourcing and optimization and can be reached at [email protected].

Korhan Acar is a Kearney partner who specializes in end-to-end logistics strategy and execution and can be reached at [email protected].

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