Latest Lehigh Business Index Reveals Evolving Supply Chain Risks
The Lehigh Business Supply Chain Risk Management Index (LRMI) for the fourth quarter of 2026 indicates a minor decrease in overall risk levels following a significant rise in the previous quarter. Nonetheless, various external factors continue to pose substantial challenges to supply chain stability.
Even though Transportation Disruption Risk has slightly declined from its peak in the third quarter, it remains the most critical risk factor and is significantly higher than the three-year average. Zach G. Zacharia, Ph.D., an associate professor and the Director of the Center for Supply Chain Research at Lehigh, explained, “Respondents pointed to the unresolved conflict with Iran, continued fuel price volatility, driver shortages tied to tighter federal enforcement and fourth-quarter peak-season capacity constraints and surcharges.”
Economic Risk closely follows, with contributors highlighting concerns over energy costs, ongoing inflation, high capital expenses, and labor shortages. Additionally, Cybersecurity and Data Risk have seen an uptick as AI-enabled attacks continue to outpace defensive measures, compounded by threats from state actors, seasonal phishing, and third-party vendor vulnerabilities during the holiday period.
When asked to rank all ten risk categories, respondents identified Government Intervention Risk as the most pressing issue, followed by Economic Risk, Transportation Disruption Risk, and Cybersecurity and Data Risk. Zacharia noted, “The gap between the two views is the story of this quarter. Transportation and economic pressures are the risks most likely to worsen in the next three months, but when forced to choose, supply chain professionals see government intervention as the risk that matters most, because tariff and policy uncertainty sits upstream of their sourcing, pricing and transportation decisions and is the hardest to plan around.”
The LRMI, developed by the Center for Supply Chain Research at Lehigh in collaboration with the Council of Supply Chain Management Professionals, evaluates ten broad categories of supply chain risks, including cybersecurity, economic, environmental, and technological risks.
According to Zacharia, the LRMI assists executives and managers in identifying and preparing for key risks for the upcoming quarter. The quarterly reports include insightful comments from supply chain managers, offering a qualitative perspective on the quantitative data. Highlights from the latest report include:
- Q4 capacity constraints, seasonal freight surcharges, and weather-related delays significantly elevate transit risks.
- Steamship lines are pulling capacity, there is terrorism at the Suez gateway, drought at the Panama Canal, and tariff exposure is causing shippers to bunch shipments to game inbound timing.
- Expect increasing energy-related costs. We may have some labor shortages due to the ending of Temporary Protected Status (TPS) for several groups.
- I saw a report that my company had over 124 cyber-attack attempts last week. It seems like this is a headache that will never go away.
- Geopolitical trade tensions, ongoing tariff uncertainties, and evolving environmental regulations maintain a persistent compliance burden.
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LRMI reports are published quarterly in March, June, September, and December. To access the latest report for free or participate in the next quarter’s LRMI survey, visit business.lehigh.edu/LRMI.
About the Center for Supply Chain Research at Lehigh
The Center for Supply Chain Research at Lehigh (CSCRL) facilitates the exchange of innovative ideas on critical supply chain issues by bridging theory and practice. By leveraging the expertise of Lehigh’s faculty, students, alumni, and industry partners, the Center aims to foster new educational and research opportunities in supply chain management. Learn more.
About the Council of Supply Chain Management Professionals
The Council of Supply Chain Management Professionals (CSCMP) is dedicated to the professional development of supply chain managers worldwide. With a variety of resources and a robust network, CSCMP supports career advancement at every stage. Learn more.
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