News / Red Sea disruption drives shift to smaller, flexible cold chain networks

 Ongoing disruption to key tradelanes is accelerating a shift in retail supply chains, with major players moving towards smaller, more flexible distribution networks capable of responding quickly to sudden shocks. 

Speaking at the closing TPM26 cold chain session in Long Beach last month, senior executives from Walmart and IKEA said recent geopolitical volatility, including disruption linked to the Red Sea, had reinforced the need for faster decision-making, regional sourcing and more agile logistics setups. 

Frank Paulus, category manager for food logistics at IKEA, said disruption had become a constant rather than an exception, requiring organisations to act quickly rather than rely on detailed planning. 

He cited recent events in the Middle East, where cargo flows were forced to change course mid-journey, requiring rapid reassessment of supply options. 

“The products need to go somewhere else… the stores are still open, so there needs to be something for them to sell,” he said.  

While carrier routing decisions may evolve depending on security conditions, most shippers are continuing to plan for prolonged uncertainty, building flexibility into their networks rather than relying on a return to stable transit patterns. 

That flexibility is increasingly taking the form of more localised distribution. 

IKEA is shifting from a reliance on large, centralised warehouses toward a network of smaller facilities closer to end customers – a move driven both by disruption risk and changing shopping habits. 

“It clearly is more in the direction of more, and smaller, warehouses instead of one big [one],” said Mr Paulus.  

The shift reflects a broader change in retail, as consumers demand faster and more convenient delivery options, particularly for grocery and food. 

Mauricio Padrón, senior supply chain director at Walmart, said speed was becoming the defining factor in supply chain design, pointing to markets such as India, where ultra-fast delivery models are already established. 

“Speed is going to be the game… the question: is our setup ready to serve that?” he said.  

Whether disruption to major tradelanes persists or eases, executives suggested the new trend was unlikely to reverse. Instead, the focus is shifting towards resilience, not only through infrastructure, but through organisational capability. 

Mr Paulus said companies needed to be able to respond immediately when disruption hit, rather than wait for perfect information, building what he described as “muscle memory” within teams. 

At the same time, cold supply chains face the added complexity of handling perishable goods, where delays or misrouting can have immediate commercial consequences. 

Mr Padrón noted that, despite recent shocks, essential flows such as fresh produce had continued uninterrupted, underlining both the fragility and importance of the system. 

“Bananas never stopped, frozen meat never stopped,” he said.  

The same theme is being echoed by logistics providers. In a new Loadstar Podcast, DP World Group COO Beat Simon said disruption and shifting trade patterns were making “one-size-fits-all” supply chains obsolete, with companies increasingly requiring more tailored and flexible solutions to keep goods moving. 

Alongside structural changes in networks, technology is also beginning to reshape cold chain operations, particularly in visibility and exception management. 

Executives highlighted the growing use of AI to monitor temperature-controlled shipments in real time, allowing operators to identify and respond to issues within minutes. 

Looking ahead, the consensus from the session was that uncertainty – whether driven by geopolitics, policy shifts or consumer behaviour – would remain a defining feature of the cold chain in 2026. 

For shippers, that means designing networks that can absorb shocks, adapt quickly, and continue delivering essential goods, even as the operating environment becomes increasingly unpredictable.