If you run a consumer brand or manage a supply chain in 2026, you already feel it. Fuel costs are climbing, packaging is more expensive, and manufacturing costs are at an all-time high. And the geopolitical landscape is not offering much relief.
The global economy is on shaky ground, and the effects are hitting fulfillment operations hard. But here’s the thing, the brands that come out on top won’t be the ones simply absorbing the pain and costs. They’ll be the ones who adapt, create resiliency, and make decisions for long-term success.
As someone who works alongside consumer brands every day as the CRO of a fulfillment company, I see which strategies actually move the needle and which ones are just noise. Let me walk you through what’s happening right now, where the hurdles are, and what you can do about it.
The Big Picture: Geopolitics Is Driving Everything Up
There’s no single culprit for this tangled mess, it’s a myriad of global issues. The Russian-Ukraine war continues to disrupt the European Energy market. And the escalation in the Middle East, particularly the closure of the Strait of Hormuz following military strikes on Irian targets in February has triggered a massive disruption in oil supply.
The numbers tell the story. Crude oil prices have skyrocketed after Iran closed the Strait, cutting off approximately 20% of the global oil supply. Oil prices have risen 45% and gas has gone up 55% in the last two months. While this kind of disruption is most obviously felt at gas stations (US gas average prices are up 70% since the beginning of the year), it is causing major issues across the entire supply chain.
For brands and 3PLs, this has translated to a steady increase in the cost of doing business. Here’s a quick breakdown of where brands and 3PLs are feeling these shifts the most.
The 2026 Margin Squeeze: Where Brands and 3PLs Are Feeling It Most
The topic on every brand operator’s mind this year is margin protection. The cost of everything is high right now, and for anyone in supply chain these costs either need to be absorbed or passed on. While there are many cost considerations right now, the following three are the most prominent, affecting the most brands and supply chain vendors alike.
Rising Manufacturing Costs
The cost of raw materials climbed an average of 5% through 2025, and some materials like copper and steel have charted closer to 50% increases in 2026. The response from manufacturers has been predictable but painful with 86% of them planning to pass at least some of the increase to their customers. For consumer brands, that means that the cost of landed goods is going up whether you source it domestically or from another country.
The surge in energy costs will likely accelerate these increases. Most brands are questioning if this will level off. It may not ever, or for a while as 70% of manufacturers cite tariffs as their top concern, while 63% say the increase is just the cost of doing business.
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Increased Fulfillment and Packaging Costs
At the other end of the supply chain, fulfillment costs, especially packaging materials, have risen significantly in 2026. Global packaging demand continues to climb to meet ecommerce demand, pushing packaging materials spend over $120B. The challenge is that demand is outpacing efficiency and supply, putting continuous pressure on supply chains and pricing.
While many packaging material costs are climbing (recent reports show paper packaging up 15% and plastics even higher), one major cost center for 3PLs is corrugated cardboard, which is also up over 10% this year alone. Because corrugate is a key component of delivery, on top of other material increases, the result is that packaging is no longer a small line item that you can ignore. It’s becoming a real cost driver of fulfillment cost, forcing brands to rethink packaging strategy and cost structure.
Transportation and shipping
Both FedEx and UPS implemented an average of 5.9% base rate cost increase heading into 2026. These increases are on par with what we’ve seen in recent years. No reason to worry, right? Well, not exactly. These increases only tell part of the story. Carriers are now relying on surcharges, including fuel and delivery area surcharges, as levers to offset rising costs. Surcharges can account for a third or even half of the parcel costs. They are updated frequently, making shipping expenses hard to predict and even harder to budget for.
Other carriers haven’t been immune to the rising costs. USPS announced a “temporary” 8% fuel surcharge effective April 26, 2026, through January 2027. Amazon followed suit, announcing their first-even fuel surcharge, 3.5% for third-party sellers starting April 17, 2026. If history repeats itself, these temporary surcharges will likely stick and be a mainstay for years to come.
The Steps Growing Brands are Taking Right Now
Smarter Shipping
Ecommerce shipping can account for as much as 60–70% of a brand’s overall budget. It’s no wonder that brands spend a lot of time thinking about how to optimize this aspect of their business. Brands want fast and inexpensive shipping which can be challenging to accomplish both considering how fast shipping costs are rising.
The good news is that a growing wave of newer carriers is introducing real competition to traditional incumbents like UPS, FedEx, and USPS. This gives brands and shippers more choice and better leverage to find a carrier and service that fits their needs. Couple this with the growing advancement in shipping optimization, especially leveraging AI and machine learning. Brands can now accomplish their goals of getting cost-effective, reliable, and fast shipping without the all the legwork of stitching together a network of carriers.
These new shipping platforms onboard multiple carrier types, enterprise, regional carriers, DSPs, and gig networks (here’s a breakdown of this new landscape) and choose which carrier or service is most optimal for each package. Brands and their customers get the most value possible. But diversification alone isn’t enough.
The real advantage comes from pairing that carrier and service mix with technology that can make the right decision at the right time. Static routing and single carrier strategies leave way too much on the table.
The most effective brands automatically evaluate every shipment dynamically, selecting the optimal carrier and service level based on cost, delivery speed, and real-time market conditions. This is how you reduce costs and meet the transit time expectations.
Package Optimization
Smart, thoughtful packaging creates both short and long-term advantages. Yes, overall cost matters, but great packaging also sets you up to expand into new channels (especially retail), improves shipping efficiency, and still delivers a strong brand experience for your customers.
Start with inventory basics. Use GS1 UPCs instead of internal SKUs or generic barcodes. If retail is even a possibility, this will save you a ton of time and rework once you get your retail contracts. These are non-negotiable for most retailers.
Be intentional about your master carton strategy. Build it with retail in mind, even if that’s 12–24 months out. Too many brands end up creating multiple SKUs as they add different sales channels, which leads to unnecessary re-kitting, added costs, and operational complexity.
And don’t get too cute trying to game carrier weight breaks. We see this all the time; brands design a product intending to get it just under a shipping service weight threshold (say 1 lb.) but forget to account for packaging weight or small-scale variances. A 12 oz product + 2 oz corrugate = 14 oz. If a carrier scale is off by 1–2 oz, which they often are, now you’re over the threshold. That small miss can create meaningful cost increases at scale and fighting carriers to claw that money back is painful and not always successful.
Packaging done right can save you a significant amount of money in the long run and provide flexibility to allow your business to adapt to the market.
Operational Discipline
Not all warehouses and fulfillment providers are created equal. Like anything else, you get what you pay for. And while operational discipline doesn’t always show up immediately on your P&L, it will over time.
Too often, brands evaluate 3PLs purely on a spreadsheet. Line item vs. line item, lowest cost wins. But that misses the bigger picture. On paper, it looks great but the hidden cost of a poorly run operations can hamstring, even kill, your business. If orders aren’t going out on time and accurately, the downstream impact can be massive: unhappy customers, increased support costs, and ultimately fewer repeat purchases. Brands work hard to acquire new customers, and it’s a shame when some of them walk out the backdoor due to operational breakdowns that can easily be solved for.
Make sure your fulfillment partner is measuring what matters and holding teams accountable. You should have visibility into order accuracy, fulfillment SLAs, and delivery performance (or at minimum, receive regular reporting). Just as important, a clear quality process. Who owns each decision? How are issues identified, resolved, and prevented? While mistakes happen, what matters is having a clear, process-oriented communications loop that ensures the issues are identified, resolved, and not repeated.
And while outbound gets all the attention, returns are where a lot of hidden costs live. You need clear business rules, fast turnaround on restocking sellable inventory, and a defined path for unsellable goods. Letting returns pile up is a silent margin killer as storage costs creep up, inventory gets tied up, and problems compound over time.
Done right, operational discipline isn’t just about execution; it’s a competitive advantage.
Final Thoughts: Control What You Can
The reality is that brands can’t control geopolitics, fuel prices, or global supply hurdles. Those forces are bigger than any one company.
What you can control is how you operate within that environment.
The brands that successfully protect their margins in this next phase won’t be the ones waiting for costs to come back down. They’ll be the ones rethinking their shipping strategy, being intentional about packaging, and holding a high bar for operational execution. They’ll treat fulfillment not as a cost center, but as a strategic advantage.
Because in a world where costs are rising across the board, efficiency matters more than ever. Small improvements in packaging, shipping decisions, and operations don’t just add up; they separate the brands that survive from the ones that flourish.
The playbook is constantly changing. The brands that adapt the fastest will be the ones that come out ahead.
Brian Tu, Chief Revenue Officer at DCL Logistics, has built sales and service teams with a customer-first mentality at numerous Fortune 500 companies and high-growth Sillicon Valley brands, including AOL Time Warner, Defy Media, and Medium. He currently oversees the sales, marketing, IT, and client services at DCL; his background supports DCL’s service-centric model and technology-focused fulfillment solutions. Read more of his articles here.
Tags: Expert Advice & Tips, Omnichannel Fulfillment, Packaging
