2026 Supply Chain Trends: Problem Solving Labor Shortages, Robotics, and Warehouse Constraints

The supply chain enters 2026 under exceptional pressure. Robotics adoption is accelerating, customer expectations continue to evolve, and physical constraints, such as labor and space, are becoming increasingly difficult to ignore.

At the center of these shifts is a single driver: societal expectations. Order processing volumes alone have increased 95% since 2019, marking a profund impact throughout the supply chain. Layer in sustainability expectations, and the supply chain faces another year of structural change rather than incremental adjustment.

Customer Expectations Are Rewriting Supply Chain Priorities

These evolving expectations are fundamentally reshaping the priorities of supply chains. Reverse logistics, omnichannel fulfillment, and real-time inventory accuracy are no longer competitive advantages; they are essential for success.

Hundreds of thousands of suppliers are now competing for the same constrained resources: warehouse space, skilled labor, transportation capacity, and execution speed. The resulting pressure is already visible across fulfillment networks.

This article examines the supply chain trends expected to shape 2026, with a focus on labor shortages, warehouse constraints, and the operational bottlenecks that are emerging as a result.

Constraint #1: Labor Availability

Not Enough Workers to Sustain Demand

While supply chains increasingly operate through digital systems, execution still depends on human labor. According to Instawork’s 2025 State of the Warehouse Industry, labor shortages and workforce instability remain the most significant challenges facing warehouse and logistics operations.

When labor availability declines, costs rise, efficiency erodes, and the ability to meet volatile demand weakens. This challenge has become both persistent and systemic in nature.

To understand the scale of the issue, consider the current labor environment:

• 78% of facilities report significant difficulty in hiring and retaining qualified warehouse staff.
• Nearly 500,000 warehouse and logistics jobs remain open in the United States.
• Average annual turnover among warehouse workers sits at approximately 36%.
• Pick-and-pack workers, forklift operators, and shift leads remain the most difficult roles to staff.

Understaffed facilities experience higher error rates, increased employee burnout, and a growing reliance on inexperienced workers who are still learning inventory systems and safety protocols.

Operational and Financial Consequences

Labor shortages extend far beyond staffing challenges. They have measurable financial and operational consequences.

Workforce instability typically drives operating costs 15-25% above industry averages, diverting capital that could otherwise be invested in technology and process improvement. Companies respond with higher wages, expanded benefits, and signing bonuses, only to repeat the cycle as turnover persists.

High churn accelerates shrinkage and loss, now averaging 1.4% of annual revenue. Operationally, understaffed receiving docks can create congestion, reducing productivity by 25% during peak periods. Picking and packing errors increase return volumes and undermine customer satisfaction, amplifying downstream costs.

These challenges are magnified in modern warehouses, which manage thousands of SKUs. New employees require a significant amount of ramp time to learn the systems and safety requirements. When turnover remains high, efficiency gains are repeatedly lost before they can compound and accumulate.

How Operators Are Responding

In response to increased demand and insufficient workforce, warehouse operators are adjusting staffing strategies. Nearly half of all warehouses now rely on flexible or temporary labor.

One model gaining traction is a layered staffing approach, which involves a stable core of permanent employees supported by experienced temporary workers and a surge layer for peak demand. This structure strikes a balance between reliability and the reality of fluctuating volume.

At the same time, leading organizations are focusing on employee retention through a strong company culture, effective training, flexibility, and opportunities for upward mobility. These efforts are necessary but increasingly insufficient on their own, as the supply chain faces further issues ahead.

Constraint #2: Physical Space and Storage

Not Enough Room for Goods

The next major issue affecting the supply chain in 2026 is physical. Warehouses are physically running out of space needed to house all the products demanded by consumers, as well as to store the additional inventory resulting from the hassle-free return culture.

Real estate, like the residential sector, is a significant issue affecting costs in the supply chain. Rising commercial real estate prices make expanding footprints cost-prohibitive, forcing companies to find creative solutions for storage in less-than-ideal layouts. Additionally, poor pack density means companies have to pay for empty shipments or storage space in large or oversized boxes.

These poorly planned storage solutions can increase worker travel distances (also known as steps) in pick-and-pack operations by 30-40%, directly reducing productivity. When these issues coincide during peak seasonal overload, with increased order volumes by 200-400%, they are exacerbated.

How Stakeholders Are Responding

There are a few key solutions organizations are considering to meet the increased need for space.

A major consideration to fight the storage crisis is to build up, not out. Companies are turning to vertical storage racks, constructing mezzanines, and utilizing robotics to increase their storage capacity. This allows for more storage without requiring additional square footage.

Another option is to consider flexible leasing, which allows for the use of shared or short-term warehouse space to accommodate seasonal spikes, thereby avoiding a commitment to a massive facility that may not be utilized throughout the year.

Constraint #3: Inaccuracy

Suppliers can expect to face another major hurdle in 2026, resulting from the limited space and shortage of personnel to meet customer demands: inaccuracies.

The supply chain currently faces a significant accuracy gap, with most facilities achieving a precision rate of around 85-90%. That missing 10% is often phantom inventory, which is stock that exists in the system but isn’t physically on the shelf.

Here are a few facts to illuminate the layers affecting accuracy across the global supply chain:

• Average inventory shrinkage often costs roughly 1.4% of annual revenue.
• Inefficiencies at receiving and putaway can cut productivity by up to 25% during peak periods.
• eCommerce return rates of 20-30% create a complex reverse logistics flow that is harder to track than outbound orders.
• Receiving errors often start at the dock, where noncompliant labels or documentation force manual entry and introduce discrepancies.
• Disconnected legacy systems create data silos, reducing operational visibility by up to 40%.
• High productivity pressure and workforce turnover increase human error, leading to miscounts and misplaced inventory.
• Limited SKU-level expertise tends to prioritize speed over precision, thereby compounding accuracy issues at scale.

Together, these factors create operational bottlenecks that compound labor shortages and restrict throughput.

The Organizational Response

To be successful, suppliers should look at several strategies that help combat inaccuracy. Digital verification technologies help validate every item in real-time and inspect outbound parcels for label accuracy and order completeness. Auditing and manual cycle counts can be effectively managed with Warehouse Management Software (WMS) to run predictive analytics, preventing missed inventory from becoming a systemic problem.

These strategies will certainly ease some of the burden of inaccuracy; the real problem-solver is in AI, robotics, and automation.

The Scalable Path Forward: Robotics, Automation, and Intelligence

Automation is no longer experimental. For fulfillment operations to remain competitive, it is becoming a requirement. The goal is not to replace people, but to shift human effort toward higher-value work that requires judgment rather than repetition.

While robotics and automation are being adopted by large carriers, a gap exists between acknowledging their importance and implementing them. Only 10% of companies are utilizing automation and robotics effectively, while 34% continue to take a wait-and-see approach, despite labor shortages and service demands intensifying. This immense disparity between understanding importance and actual execution will be a determining factor for success.

Robotics as a Solution

Investment trends reflect a shift in focus to robotics. Organizations are increasing their average annual spending on materials handling to nearly $402,000, with 14% planning investments of $1 million or more.

Industry leaders are already acting. DHL is deploying over 1,000 additional robots, and Ryder has automated nearly 40% of its warehouse network.

Key technologies in use include:

• Automated Guided Vehicles (AGVs) for repetitive transport
• Autonomous Mobile Robots (AMRs) for flexible, dynamic workflows
• Automated Storage and Retrieval Systems (AS/RS) for high-density vertical storage
• Vision-enabled robotic arms for palletizing, packing, and sorting

High-density storage and AS/RS systems are becoming essential for maximizing capacity within fixed footprints.

Automation and AI: Closing the Intelligence Gap

Automation extends beyond the physical movement of goods. From a data perspective, it replaces manual entry with real-time capture and predictive insight. Today, disconnected systems reduce operational visibility by up to 40%.

Data automation enables:

• Inventory accuracy approaching 99.5% through RFID, IoT, and automated scanning
• Predictive demand sensing, slotting, and labor planning
• Computer vision for quality assurance
• Predictive maintenance to minimize downtime
• AI-driven labor platforms that improve shift matching and fill rates

The benefits of automation and AI to meet the increasing customer demands are a clear win.

Related Reading: RFID Implemetation: A Step-by-Step Guide

Rethinking ROI with Total Value Metrics

As the supply chain continues to evolve with new technologies, forward-thinking leaders will reconsider how to measure Return on Investment (ROI) using a new metric: total value. This strategic shift enables organizations to transition from reactive survival to enterprise-wide value maximization.

Total Value is a metric that can measure the following:

• Visibility & Resilience: Instead of just tracking lead times, companies can measure the time it takes to detect and respond to disruptions, as well as the recovery time after an event.
• AI & Automation Accuracy: Key metrics include forecast accuracy, the automation rate of transactional processes, and human-machine collaboration indicators, such as the frequency of human overrides in automated systems.
• Operational Excellence: Modern facilities prioritize inventory accuracy (aiming for >99.5% via RFID), dock-to-stock cycle times, and pick rates per hour.
• Workforce Health: Critical data points include annual turnover rates, shift fill rates, and no-show rates.
• Sustainability & Risk: Executives are increasingly mandated to track carbon footprints, sustainable procurement rates, and cybersecurity incident frequency.

All of these metrics together can create a total value framework, effectively allowing organizations to measure their overall resiliency despite supply chain bottlenecks.

SPS Commerce Automation Solutions

SPS Commerce offers an automation solution that can help you increase productivity, lower costs and operational expenses, and improve data quality. Contact us today to how order automation can help you get ahead in today’s changing supply chain landscape.