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The war in the Middle East, ongoing tariff concerns, component shortages, rising input costs and other factors are keeping supply chain managers up at night in 2026. And just when one problem is solved, multiple others seem to jump right in behind it. Supply networks are forced to navigate this complexity while also dealing with outside factors like inflation, economic uncertainty and changing customer behaviors.
It's a lot to deal with, and the stress is showing up in the numbers. The Global Supply Chain Pressure Index (GSCPI) eased very slightly in May, but remains at its highest reading since July 2022.
“Supply chain disruptions have become a major challenge for the global economy since the start of the COVID-19 pandemic,” the Federal Reserve Bank of New York says in its report. “Assessing the intensity of these issues has also posed a challenge, as conventional measures tend to focus on specific dimensions of global supply chains.”
Pandemic Constraints Reemerge
The GSCPI integrates transportation cost data and manufacturing indicators to provide a gauge of global supply chain conditions. The index fell to 1.77 in May, down from 1.82 in April. According to Trading Economics, the GSCPI averaged 0.00 points from 1997 until 2026. It reached an all-time high of 4.45 points in December 2021 and a record low of –1.58 points in May 2023. “The [GSCPI] is expected to be 0.50 points by the end of this quarter,” the company adds.
Reuters says the U.S.-backed war with Iran and resulting shutdown of the vital Strait of Hormuz waterway have “sharply impeded the flow of oil and other goods critical to the global economy. The disrupted supply chains hark back to similar conditions during the COVID-19 pandemic, which helped set the stage for a massive surge in inflation that has not been fully contained.”
The publication says the New York Fed data echoes other findings. The Institute for Supply Management's factory sector survey recently noted rising challenges for factory operators in getting the inputs they need, as well as rising prices tied to the war. “One of the things that worries me.. is the supply chain disruptions” tied to the conflict, New York Fed President John Williams said. “That’s the thing that really hit us and most countries in the world very hard during the pandemic.”
Pushing Companies Into Stockpiling Mode
gCaptain has also been tracking the global supply chain pressure cooker and says the supply chain issues that surfaced during the pandemic are reemerging. “While the indexes are still far from their COVID highs, they reflect disruptions to global trade from the Iran war that bear some similarities to what happened back then,” it explains. “Logistics captures the movement of goods between suppliers, factories and final consumers, and accounts for an estimated 10% of world GDP, underscoring its important role in the global economy.”
In “Global Supply Chain Pressure Is Rising Again: Why Companies Are Stockpiling Before the Next Crisis,” source-to-pay solution provider C1 India Pvt Ltd. says this growing uncertainty is pushing companies back into “stockpiling mode,” a strategy that took hold during the pandemic years. They’re stockpiling because they think prices for raw materials and finished goods could rise further in the coming months.
“To protect themselves from higher future costs, companies are buying products in bulk today,” the company adds. Companies are also trying to avoid the severe semiconductor, medicine, electronics and other shortages they experienced during the pandemic. At the same time, global trade routes are becoming increasingly unstable due to ongoing trade conflicts, regional wars and general political instability.
“These issues are creating additional pressure on international logistics,” C1 India points out. Other signs of growing supply chain pressure include more demand for warehouse space, longer supplier lead times and higher logistics costs. “These trends clearly indicate that businesses are preparing for possible future instability,” it adds.
