SMBs ditch ‘wait-and-see’ as tariffs force supply chain overhaul

About 35% of SMBs changed suppliers in the past year, while nearly half now source from multiple regions, reflecting growing exposure to tariff impacts across geographies.

China remains the most impacted sourcing region, cited by 74% of respondents, but companies are increasingly branching into Europe, Southeast Asia and Mexico as they look to reduce risk.

Still, diversification is easier said than done for smaller companies.

“I was interested to see that a third of them had changed suppliers,” Barr said. “But … it’s hard to find a supplier. If you’re sourcing from China, it’s hard to find another location that can do the same production.”

The result is a hybrid approach, with many SMBs maintaining legacy suppliers while adding secondary sources — a shift that could fragment freight flows and alter traditional shipping lanes.

Longer planning horizons reshape inventory cycles

Tariff uncertainty is also pushing businesses to rethink how far ahead they plan. Nearly three-quarters of SMBs said they have extended their inventory planning horizons, according to the survey.

That shift reflects a need to anticipate cost swings, longer lead times and potential policy changes, but it also introduces new risks around inventory management.

“Three-quarters said the tariff uncertainty has pushed them to extend their planning horizons,” Barr said. “If you don’t have the right visibility tools, it’s kind of hard to make those decisions.”

The report notes that many SMBs were already struggling with inefficient inventory positioning last year, raising questions about whether longer planning cycles will improve outcomes — or simply push risk further down the line.

Pricing pressure builds as cost absorption fades

After initially absorbing tariff-related costs to maintain customer relationships, SMBs are increasingly passing those costs downstream.

The survey found that 82% of companies are now raising prices in response to tariffs, up sharply from the prior year.

“That was one of my biggest takeaways,” Barr said. “It’s kind of pushed past the point of them being able to bear it.”

The shift could have broader implications for demand, as higher prices ripple through supply chains and potentially dampen order volumes later in the year.

Analytics adoption emerges as key differentiator

As complexity increases, SMBs are turning to data and automation tools to guide decision-making. The report found that heavy use of analytics more than doubled year over year, while adoption of AI-driven inventory tools continues to rise.

Barr said the move toward analytics is becoming essential for navigating uncertainty.

“The spreadsheet’s not going to cut it,” he said. “They’re going to have to rely on … inventory optimization solutions to help give them that visibility.”

Freight market implications: volatility likely to persist

Taken together, the shifts outlined in the report suggest continued volatility in freight demand patterns.

Supplier diversification and multi-region sourcing could lead to more fragmented shipping networks, while extended planning horizons may drive earlier ordering cycles. At the same time, rising prices and inventory risks could create periods of softer demand if consumption slows.

For SMBs, the challenge is balancing resilience with efficiency in an environment where policy shifts remain unpredictable.

“They can’t control global volatility,” Barr said. “But they can control … inventory levels and supplier mix.”