A significant transformation is underway in global logistics, with a majority of business leaders planning to localize their supply chains by 2030. A new report indicates that companies are prioritizing risk reduction over cost savings, turning to artificial intelligence as a primary tool to manage increasing economic and geopolitical volatility.
According to a comprehensive survey of 1,800 global executives by Prologis and The Harris Poll, 75% of companies will make AI their top capital investment in 2026. This move signals a fundamental change in how goods and services are produced and distributed worldwide.
Key Takeaways
- A majority of executives (58%) predict supply chains will become more localized by 2030, moving away from globalization.
- Risk mitigation has replaced cost optimization as the primary business strategy in supply chain design.
- Artificial intelligence is the top investment priority for 75% of companies in 2026 to manage risks and improve reliability.
- The most significant threats to supply chains are economic volatility (55%), trade barriers (48%), and geopolitical instability (38%).
A Strategic Shift from Globalization to Localization
The era of prioritizing low-cost, globalized production is facing a significant challenge. The new survey reveals a clear trend toward regionalization, with 58% of global executives forecasting more localized supply chains within the next decade. In contrast, only 31% believe the trend of globalization will continue unabated.
This change represents a core shift in business philosophy. The report's authors note that companies are moving from a strategy of cost-optimization to one centered on risk-mitigation. The focus is now on creating more resilient and reliable networks, even if it means higher operational costs.
From Cost to Control
For decades, the prevailing logic was to manufacture goods wherever it was cheapest, creating complex, globe-spanning supply chains. Recent disruptions have exposed the fragility of this model. The new approach values proximity and control, suggesting that the reliability gained from localizing operations outweighs the traditional cost advantages of global production.
This trend is already in motion. More than three-quarters of the companies surveyed have either implemented or are actively developing regional networks. These networks are often built around major consumption centers to shorten the distance between production and the end consumer.
When deciding where to establish these new, localized operations, two factors stand out. According to the report, energy reliability is a major driver for 40% of companies, while labor costs influence decisions for 36% of executives.
Navigating a Landscape of Increasing Risk
While localizing supply chains can reduce certain vulnerabilities, it does not eliminate risk entirely. Business leaders remain highly aware of the persistent threats that can disrupt the flow of goods and services. The survey identified the primary concerns that will shape strategic planning through 2026.
Top Supply Chain Risks for 2026
Executives identified the following as the most significant threats to their operations:
- Economic volatility: 55%
- Tariff increases and trade barriers: 48%
- Geographic instability: 38%
- Cybersecurity threats: 38%
The high level of concern over economic issues and trade policies reflects a volatile global environment. Companies are preparing for a future where tariffs and geopolitical tensions can suddenly alter trade routes and increase costs. Cybersecurity also remains a critical concern, as digital systems are integral to modern logistics.
To navigate this complex risk landscape, executives are increasingly looking toward technological solutions. Artificial intelligence, in particular, is viewed as an essential tool for building the responsive and resilient supply chains required for this new era.
AI Becomes the Top Investment Priority
Artificial intelligence is no longer an experimental technology in logistics; it is rapidly becoming a foundational component. The survey shows that 70% of executives are already well advanced in applying AI to their supply chain operations. This high adoption rate underscores the industry's confidence in AI's ability to deliver tangible results.
The primary use cases for AI currently focus on improving operational oversight and identifying potential problems before they escalate. Key application areas include quality control, automated inspections, and advanced risk identification.
"The supply-chain industry has crossed the AI adoption threshold, positioning it at the forefront of AI commercialization," the report's authors state.
This commitment to AI is reflected in corporate spending plans. An overwhelming 75% of companies plan to make AI their top capital investment priority in 2026. This places AI far ahead of other important areas such as automation, energy efficiency, and workforce development.
Projected Investment Priorities for 2026
The survey asked executives to rank their top five investment priorities for the coming years, revealing a clear focus on technology and resilience:
- Artificial Intelligence: 75%
- Supplier investments and relationships: 38%
- Automation and robotics: 37%
- Energy efficiency: 36%
- Talent development and scaling workforce: 31%
The significant gap between AI and other priorities highlights its perceived importance in shaping the future of the industry. Companies are betting that AI-driven insights will provide the agility needed to thrive amidst uncertainty.
The Future of AI-Driven Decision-Making
The impact of AI is expected to grow exponentially in the near future. Companies that are leading in AI adoption are already seeing substantial benefits. According to the survey, these leaders report an average return on their AI investments of 77% within the first 12 months.
This rapid return on investment is accelerating the push toward more autonomous systems. A majority of these AI leaders, 63%, expect that artificial intelligence will be making decisions across all major functions of their supply chains within the next five years. This includes areas like inventory management, logistics planning, and supplier selection.
The report issues a stark warning for companies that are slow to adopt these technologies. The authors emphasize the growing competitive gap between early and late adopters of AI.
"Organizations still in early-stage AI implementation risk competitive obsolescence as AI-driven decision-making becomes the operational standard.”
As businesses move to build shorter, more resilient supply chains, AI is becoming the central nervous system that manages complexity and mitigates risk. The data suggests that by 2026, proficiency in AI will not just be an advantage but a fundamental requirement for survival in the evolving world of global commerce.