The Source Market Update: January 2026 

The volatility that defined much of the past few years has given way to a more normalized environment going into 2026.  

But normalization doesn’t mean simplicity. It means structural pressures matter more than headlines, and operational decisions made early in the year will quietly shape performance all the way through peak. 

January is where reaction gives way to reset. 

What 2025 Confirmed: Returns & Reverse Logistics Were a Canary 

Heading into the 2025 holiday season, many brands underestimated the downstream impact of returns. As we predicted, elevated reverse-logistics volumes stretched well beyond December and into January, creating pressure on: 

• Warehouse labor and space 
• Inspection, grading, and restocking workflows 
• Inventory accuracy and SKU availability 
• Margin visibility tied to unsellable or delayed product 

What played out wasn’t an anomaly – it was a confirmation. Returns are no longer a post-peak afterthought. They are a core operational input, increasingly shaping forward inventory strategy, fulfillment planning, and network design. 

With that knowledge in hand, the focus now turns forward. 

The Big Picture for 2026: 5 Trends Shaping the Year Ahead 

1. Capacity is tightening slowly – and structurally 

The freight market is not snapping back, but it is gradually firming. Data from organizations like DAT Freight & Analytics points to a measured recovery rather than a surge. 

What’s notable is why capacity is tightening: 

• Carrier exits and compliance enforcement 
• Higher operating costs 
• Selective lane coverage rather than blanket availability 

This isn’t a seasonal squeeze. It’s structural, and it will show up unevenly across lanes, modes, and regions. 

The question for 2026 is no longer “how lean should inventory be?” 

It’s:

• Where should inventory live? 
• Which SKUs deserve flexibility and which don’t? 
• How quickly can inventory reposition when demand shifts? 

Post-peak returns data is now feeding directly into forward planning, helping brands refine safety stock, rationalize SKUs, and align inventory placement with actual buying behavior. 

3. Stability is replacing speed as the primary goal 

After years of chasing faster fulfillment at all costs, many shippers are recalibrating. 

In 2026, success looks less like raw speed and more like: 

• Consistency 
• Predictability 
• Exception management 
• Partner accountability 

Operational resilience, not just lowest cost, is becoming the differentiator. 

Technology conversations in 2026 are noticeably different. 

Instead of experimenting with tools, organizations are focused on: 

• Real-time inventory visibility 
• Actionable operational data 
• Forecasting that actually informs execution 
• Faster identification of issues before customers feel them

Visibility isn’t about dashboards – it’s about decision velocity. 

Global trade volumes are stabilizing, not surging. Goods-movement indicators tracked by Federal Reserve Economic Data – particularly Real Imports of Goods – point to modest, uneven growth entering 2026, rather than a broad acceleration. 

Sensitivity remains elevated around: 

• Regional disruptions 
• Regulatory changes 
• Seasonal production cycles, including early-year Asian manufacturing pauses. 

For logistics teams, this reinforces the need for flexible planning rather than fixed assumptions. 

These trends aren’t abstract. They’re already shaping the day-to-day decisions across warehousing, fulfillment, transportation, and technology. 

Operational Insights for January and throughout 2026

Warehousing & Distribution 

• Space planning matters more than square footage 
• Returns processing and forward fulfillment must coexist efficiently 
• Slotting strategies should reflect SKU velocity, not legacy layouts 
• Labor planning needs to anticipate variability, not averages 

Returns-driven congestion continues to strain warehouse operations early in the year, particularly where reverse logistics workflows collide with forward fulfillment demands. Post-holiday returns increasingly erode margin through added handling, labor inefficiencies, and delayed resale – reinforcing the need for intentional space planning and process design.  

Ecommerce Times examines how “Returnuary” is turning holiday returns into a margin problem for retailers and logistics operators. 

2026 takeaway: Warehouses that can flex operationally and digitally will outperform those built for static volume profiles. 

Fulfillment & Ecommerce 

• Order profiles continue to fragment across channels 
• Returns data is becoming a forecasting input, not just a cost center 
• Cutoff times, service promises, and carrier selection must align tightly 

Fulfillment networks are under pressure to balance service expectations with cost control, especially as consumer preferences continue to shift post-holiday. This means orchestration, not just speed, is taking center stage. 

A recent Supply Chain Dive news roundup shows major retailers and logistics operators pivoting fulfillment strategies – including closing centralized fulfillment centers and redistributing inventory to better align with omnichannel demand – signaling strategic fulfillment adaptation in early 2026. 

2026 takeaway: Fulfillment excellence comes from orchestration, not speed alone. 

Transportation 

• Spot and contract dynamics remain misaligned in many lanes 
• Capacity will be available – just not always where or when expected 
• Network optionality is increasingly valuable 

Transportation markets are still facing a mix of slack demand and cost pressures, with freight players adapting to ongoing uncertainty that carries through from 2025 to 2026. This reinforces the value of flexible routing, carrier diversity, and pricing strategies. 

Recent analysis from DC Velocity highlights that logistics providers are bracing for continued uncertainty, disruption, slack demand, and rising costs in 2026 – conditions that shape transportation planning and capacity strategy. 

2026 takeaway: Shippers benefit from transportation strategies built on flexibility, not fixed assumptions. 

Technology & Visibility 

• Data accuracy matters more than data volume 
• Integration across systems is critical to execution 
• Exception management is where ROI is realized 

In a world where standard disruptions are the norm, technology and visibility investments are moving from optional to essential – helping teams anticipate exceptions and make better decisions. 

A recent DC Velocity survey underscores this shift, showing logistics companies are prioritizing digitalization and predictive capabilities in 2026 budgets – a clear signal that technology is increasingly tied to operational resilience. 

2026 takeaway: The goal isn’t more data, it’s better and faster decisions. 

January is a Decision Window 

January isn’t just a clean slate – it’s an opportunity to pressure-test assumptions made last year. 

Organizations that use this moment to: 

• Reassess inventory placement 
• Align reverse and forward logistics 
• Reevaluate partner fit 
• Invest in visibility and adaptability

Will be better positioned when the next demand inflection arrives – whether that’s peak, promotion, or disruption. 

Get Even More Prepared for 2026 

2026 won’t reward overreaction. But it will reward preparedness. 

At Source Logistics, we continue to help brands translate market signals into operational clarity – across warehousing, fulfillment, transportation, and technology – so complexity becomes manageable, not overwhelming. 

Connect with Source Logistics to pressure-test your 2026 assumptions and turn market signals into operational clarity.