Please see below, an article from EPIC Investment Partners examining the recent increase in global logistics costs and the resulting risks to inflation and consumer demand, received today – 09/06/2026
The sharp rise in global logistics costs is reigniting fears of a fresh inflationary wave, but the bigger risk may ultimately be a further squeeze on consumers and a slowdown in demand.
According to the latest Logistics Managers’ Index (LMI), aggregate logistics costs have surged to their highest level since March 2022, driven primarily by record transportation prices following disruptions to global energy supplies, including the closure of the Strait of Hormuz. Transportation prices have reached an unprecedented reading of 96.0, the highest level recorded in the history of the survey. Historically, such spikes have been associated with periods of elevated inflation as businesses pass higher freight, warehousing and inventory costs on to consumers.
The pressure is not limited to transportation. Upstream firms have been pulling inventories forward to guard against future shortages, pushing inventory costs to their fastest rate of expansion in four years. While this activity has supported freight volumes and transport demand, it also reflects growing concern about future supply availability and costs.
At first glance, the outlook appears inflationary. Higher fuel prices increase the cost of moving goods, while rising inventory and warehousing expenses add further pressure to supply chains. Businesses facing shrinking margins are often forced to raise prices, creating another round of inflationary pressure.
However, there is another side to the story.
Consumers are already showing signs of strain. The University of Michigan Consumer Sentiment Index recently fell to a record low, with a majority of households reporting that higher prices are eroding their finances. Spending patterns are also shifting, with more income being allocated to essentials such as food, energy and housing, leaving less available for discretionary purchases.
Evidence of this behavioural shift is emerging across consumer sectors. Vehicle sales, for example, are expected to remain well below pre-pandemic norms as households delay replacing older cars, while elevated mortgage rates continue to constrain housing affordability.
This is where the inflation narrative begins to collide with reality. While supply shocks push prices higher, they also reduce purchasing power. Over time, weaker demand can limit businesses’ ability to continue raising prices. Consumers delay replacing cars, cut back on large purchases and become more selective with spending.
The result is an uncomfortable mix of elevated costs and weakening economic momentum.
For now, freight markets remain underpinned by industrial demand from sectors such as AI infrastructure, energy investment and defence spending. Indeed, freight data often acts as a leading indicator, reflecting economic activity months before goods reach consumers. The resilience of transport markets therefore suggests that supply-side pressures have not yet fully worked their way through the economy.
Yet if household budgets continue to tighten, today’s inflationary supply shock could ultimately become tomorrow’s disinflationary demand shock.
The key question for investors is not whether costs are rising today, but whether consumers can absorb them. Increasingly, the evidence suggests that may become one of the defining economic challenges of the next 12–18 months.
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Alexander James Roberts
9th June 2026