5 Supply Chain Challenges (And Surefire Ways to Solve Them)

It’s been a minute since the supply chain felt stable.

Over the past decade, a wide range of difficulties have disrupted the flow of goods. From rising costs, labor shortages, and technological advancements to the pandemic, port issues, tariffs, and geopolitical unrest, brands have had to become agile to navigate the never-ending complexities. Add in evolving consumer behaviors and the number of ways people shop, and it’s impossible to get by successfully without strong strategies. 

Despite the supply chain challenges facing today’s retailers, there’s also a lot of opportunity. Brands can thrive with the right systems, solutions, and partners. They can also do well by prioritizing the customer experience and boosting brand reputation. The key is resilience and building a supply chain able to adapt and scale swiftly to meet current and emerging challenges and needs.  

Read on to uncover today’s top challenges, savvy solutions, and ways to stay ahead of supply chain chaos. 

Challenge #1: Ongoing supply chain disruptions

Many events have disrupted the supply chain as of late. However, it’s likely the ones most top-of-mind supply chain challenges are tariffs and the on-again, off-again nature of today’s trade policies. This has caused a lot of confusion for brands and left them wondering if and when they should adapt their supply chains to better handle the potential tariffs. 

But that’s not the only disruption causing supply chain challenges: natural disasters, port delays, and geopolitical tensions have also wreaked havoc on the flow of products. It can make it hard to source materials, import and export in a timely way, disrupt transportation, and delay production. All of this often leads to increased costs that are often passed on to consumers. 

The solution:

Luckily, there are several ways brands can adapt and stay resilient amid disruptions. Investing in fulfillment technology that allows for real-time tracking and predictive risk analysis is a good way to start. If working with a modernized logistics partner, like a 3PL, retailers can work with them to ensure they have the right technology and integrations.

Although more time-consuming, it’s never too soon to start diversifying sourcing and manufacturing locations. Build strategic relationships with multiple suppliers and logistics partners to future-proof retail operations. Start by identifying alternative sourcing regions and manufacturers to avoid depending on a single country or supplier. 

Also, secure relationships with flexible networks that can pivot quickly during disruptions. This builds resilience, minimizes delays, and helps maintain a consistent product flow even when part of the supply chain is impacted. 

Challenge #2: Rising shipping and fulfillment costs

Logistics costs rose significantly during the pandemic, and they’ve remained high ever since. In particular, shipping and fulfillment costs have been affected by increased demand, limited availability, and the complexity of ecommerce operations. Brands are feeling the pressure around:

• Fuel surcharges: Fuel costs are more volatile, fluctuating in the wake of global events and economic factors. Transportation companies implement surcharges to offset the increases they face, passing on the rising costs to retailers. 
• Labor shortages: A shrinking shipping and fulfillment workforce has impacted lead times, slowed warehouse operations, and created longer loading and unloading times, which increase shipping delays. Some companies have offered higher wages to help with recruitment, which still increases operational costs. It’s believed the shortages are caused by an aging workforce, evolving technology and skill gaps, and consumer demand putting a strain on supply chain operations. 
• Last-mile delivery costs: Today’s delivery companies have higher operational costs. With the demand for faster and flexible delivery, rising fuel costs, higher labor costs, and congested delivery areas, last-mile costs are rising. 
• Peak season rates: Peak season has seen rate hikes due to the overall rising shipping and fulfillment costs and increased demand. Moreover, logistics providers like UPS and FedEx impose peak season surcharges to deal with the surge in orders and deliveries. 

The solution:

While on some level, brands will need to plan strategically for rising costs, there are ways to soften the impact. For example, as brands grow, partnering with a 3PL provider to access volume-based shipping discounts can be highly beneficial. In addition, package optimization can lead to dimensional weight (DIM weight) savings. Brands should use light packing materials and appropriately sized boxes to maximize savings.

Location and distributed fulfillment centers that keep products closer to customer hubs help save on last-mile costs. Having ideally located fulfillment operations goes beyond last-mile as well, as it often places products in areas with better labor availability and provides increased resilience and agility.  

Challenge #3: Inventory management

Omnichannel retail has added more complexities to order fulfillment and delivery. For scaling brands with expanding channels, inventory is often needed in several locations, from 3PL warehouses and marketplace distribution centers like FBA to in brick-and-mortar retail stores. Managing inventory and tracking where and how much stock you have is critical to maintaining the right levels for demand and avoiding understocking and overstocking.  

The solution:

Optimized inventory management has numerous solutions, making it something brands can implement right away. A great place to start is by adopting robust inventory management or fulfillment software that provides inventory visibility across channels and provides insights that lead to better decision-making. 

Think of it like this: The right technology will provide real-time data and automate reorder points. For example, apparel brands using RFID and inventory management software can track product movement across multiple warehouses and trigger automatic restocks for popular sizes. 

With strong inventory management, retailers can use historical data and predictive analytics to more accurately forecast demand. In addition, brands can catch inventory discrepancies early through regular cycle counting and warehouse audits, which improve order accuracy and reduce shrinkage. 

Challenge #4: Returns management strain

One of the largest supply chain challenges? Returns. In 2024, returns were a billion-dollar problem. Ecommerce returns are particularly high, impacting inventory turnover and requiring more resources to handle these returns, both in the reverse logistics flow and the labor required to process each return. However, returns have become a central focus for brands. Consumers have come to expect a flexible returns process that maintains a streamlined customer experience. When retailers don’t prioritize returns management, it can lead to a loss of sales and loyalty. 

The solution:

Returns management in 2025 has vastly improved. Tools, technology, and tried-and-true processes go a long way in smoothing out the operational flow. It starts with clear, balanced return policies that let customers know exactly what’s expected.

Brands can further streamline the process by automating returns processing and restocking workflows, and allowing for flexible options, like returns drop-off points or in-store returns.

In a time of big data, retailers can also preempt returns by understanding repeat issues. Maybe a product is suffering quality or sizing issues, or product listings don’t offer enough detail before purchase. Partnering with the right 3PL can prevent extensive issues, making your retail fulfillment providers an essential part of your operations. 

Challenge #5: Lack of supply chain visibility

Supply chain visibility is critical in today’s retail climate. Real-time insights into product movements prevent a host of issues, from excess costs to quickly identifying and addressing problems within the supply chain. The more transparency there is, the more efficient, cost-effective, and resilient your supply chain is. Without visibility, retailers experience difficulty tracking orders, supplier delays, and inventory management struggles.  

This is often doubly true in disruptive times when meeting customer demands is crucial. Supply chain visibility mitigates risk and allows for proactive resolutions and more accurate delivery estimates, earning customer trust and loyalty. 

The solution:

End-to-end supply chain visibility and management are getting easier with the help of technology and the right partners. A tech stack that integrates systems across procurement, warehousing, fulfillment, and delivery is a necessity. When that data is shared with key stakeholders and partners, it also allows for better collaborative planning. Ensure that the partners and platforms selected work together seamlessly.

Overcoming supply chain challenges with the right partners

The reality is, ecommerce and omnichannel businesses will always face numerous supply chain challenges and disruptions. According to a McKinsey & Company survey, 44% of retailers say their supply chain footprint has given them major challenges, requiring significant business changes; and 49% say disruptions have caused significant planning challenges. 

Between elevated customer expectations, talent shortages, costs, and other issues, brands must be proactive and tech-enabled to stay agile and resilient. Partnering with logistics providers that provide expertise and support is also imperative. If you’re looking for a smarter way to navigate supply chain challenges, talk to our fulfillment experts today to future-proof your operations.