Those costly assumptions in logistics and supply chain management

In the field of logistics and supply chain management, some seemingly reasonable assumptions often become the hidden drivers of rising corporate costs. Recently, several industry executives shared their observations on these costly misconceptions in a special discussion by *Inbound Logistics*, revealing common traps ranging from human resources to technology application, from procurement strategies to operational optimization.

Treating employee turnover as a normal operating cost

Rebecca Wilson, Senior Vice President of Human Resources at Kenco, pointed out that many companies view employee turnover as an inevitable expense, yet overlook its impact on operations. Loss of experience, decreased productivity, and increased hiring and training costs ultimately harm service levels and supply chain stability. "Keeping top performers is far more economical than rehiring; investing in leadership, career development paths, and engagement mechanisms is a more effective strategy," Wilson emphasized.

Pursuing AI technology without a clear problem orientation

Beth Hendriks, Chief Technology Officer at Infios, warned that the industry is shifting from "technology-first" to "problem-first" because most AI projects fail as teams rush to deploy tools before defining business outcomes. "Before applying AI, clarify the actual problems to be solved; otherwise, technology investments only add complexity."

Lowest price equals lowest total cost

Multiple experts unanimously opposed this notion. Sean Yanok, Regional Development Vice President at Gebrüder Weiss, stated that simply pursuing rate reductions ignores cost drivers such as reliability and visibility. An emergency air shipment triggered by a low-price but unreliable carrier can wipe out all supposed savings. Mike Kukiela, Senior Vice President of Supply Chain Distribution Management at Schneider, added that when evaluating suppliers, factors such as price, reliability, claims rate, and visibility should be considered holistically, rather than focusing solely on price.

Optimizing utilization equals optimizing efficiency

Aaron Freedman, Chief Strategy Officer at ACI Transport, believes that blindly pursuing full truckload rates leads to longer dwell times, reduced flexibility, and more missed appointments. He suggests intentionally preserving buffer capacity, accepting partial loads to improve turnaround speed, and grading transportation based on cargo value and time sensitivity.

More technology naturally means higher efficiency

George Maksimenko, CEO of Adexin, reminds that piling up technology without clarifying processes and data only increases complexity and costs. A more effective approach is to simplify first: clarify decision ownership, clean data, align systems, and then automate those steps that deliver measurable value.

Global networks and trade corridors are stableGlobal networks and trade corridors are stable

John Lash, Vice President of Product Strategy at e2open, pointed out that the pandemic, the grounding of the Ever Given, trade wars, and armed conflicts have repeatedly proven that “nothing is set in stone” in logistics and supply chains. Practices that have been the norm for decades can become obsolete overnight. Companies must be capable of making fast, confident decisions from a holistic perspective rather than focusing on temporary pain points.

Other common misconceptions

Additionally, experts have pointed out other erroneous assumptions, such as “all cargo is good cargo” (which may lead to margin erosion), “low regulatory compliance spending can be ignored” (when in fact the consequences of non-compliance are severe), and “in-house 3PL software is completely secure from cyber threats” (whereas data breaches can trigger a chain reaction).

The way forward

The industry consensus is shifting from single-dimensional cost optimization to a total-cost perspective and resilience building. Enterprises need to adopt adaptive planning and real-time sensing technologies, build decision-centric organizations, treat talent retention and network buffers as strategic investments, and rigorously define business value before deploying technology. Only by abandoning these costly assumptions can they maintain competitiveness in an increasingly turbulent global environment.