Straight Talk with Brian Straight • April 20, 2025

Hello, and welcome to this week’s edition of Straight Talk. Inside, we discuss:

• Supply chain as a stock indicator

• C.H. Robinson’s AI milestone

• Tariff pass-throughs

• The state of the SMB

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Stock success

       (Photo: RDNE Stock project)

While mentions of supply chain by publicly traded companies rose significantly post-COVID, ushering in a new era of visibility for the critical function, there have been few reports that definitively tied the value of supply chain to the one metric investors focus on most: stock price.

Supply chain ecosystem integration software company Cleo has attempted to do just that. The company analyzed five years’ worth of earnings call data (2019-2025) for 1,000 companies traded on the Russell 2000 exchange to try to correlate the value of supply chain with stock performance.

According to the company’s 2025 Supply Chain Earnings Impact Report, companies that invest in real-time visibility, automation, and operational agility are consistently outperforming their peers on Wall Street. The company looked for supply chain terminology in the earnings calls and reviewed stock prices of the firms in the seven days prior to and the seven days following the earnings call. The findings draw a clear line between market winners and underperformers—and the supply chain is at the center of that.

“Our findings make one thing clear: Businesses that embrace supply chain visibility, automation, and technology integration don’t just survive through these challenges—they thrive and come out ahead,” Mahesh Rajasekharan, CEO at Cleo, said in a statement announcing the findings.

The findings

Among the analyzed companies, Cleo found that 46% of companies whose stocks declined in the day’s following the earnings calls cited disruptions, with 37% reporting delays as a major contributing factor to their performance. Additionally, 44% that saw stock declines referenced visibility issues and 42% cited backlogs.

In total, the report found that 27% of earnings calls in 2022 included supply chain discussions—up from just 2% in 2019 and the peak mentions during the five-year study period—and 51% of companies that experienced stock price increases noted having greater control over supplier onboarding as a critical success factor.

On average, the report found it took an average of 176 days for a company’s stock value to recover from a supply chain-related disruption. Major global events—including the pandemic, the Suez Canal blockage, Red Sea shipping threats, and the return of tariff uncertainty—have underscored the fragility of global supply networks. But Cleo’s research shows that volatility favors the prepared.

The winners

Companies that delivered strong earnings and stock gains shared five critical characteristics, the report found. They are:

1. They blended workforce development, supplier expansion with automation. Leading companies upskilled employees, paired teams with smart technology, and built strong supplier partnerships to enable faster pivots and better execution. Twenty-six percent cited workforce improvements as a contributing factor to earnings growth.

2. Used backlogs as strategic growth engines. Companies focused on high-margin products and used order backlogs as a signal to investors of long-term stability. Fifty percent of companies said backlogs were a sign of future growth.

3. They turned pent-up demand into a strategic growth engine. Companies capitalized on demand and easing restrictions by focusing on strategic positioning, virtual brand expansions, and omnichannel strategies to retain current customers and attract new ones.

4. They prioritized operational efficiency. High-performing companies cut costs and increased productivity by leveraging Lean processes, dynamic pricing, and demand-driven production to help protect margins.

5. They embraced market shifts. Top performers moved quickly into growth areas like e-commerce, electric vehicles, and virtual product categories, and used supply chain agility to accelerate product launches and tap into new revenue streams.

The common thread to the leaders, Cleo found, was a willingness to embrace the supply chain as a catalyst for growth.

“Rather than reacting to disruptions, winners leveraged real-time visibility, smart automation, and proactive planning to turn challenges into opportunities—future-proofing their supply chains while unlocking new revenue streams,” the report states.

The losers

Companies that struggled had one or more of these five failings:

1. Disruptions, delays and visibility gaps. Companies that failed to anticipate and manage disruptions such as slow production or late deliveries saw cascading challenges and lost revenue. A lack of visibility resulted in reactive decision-making, with 44% of companies facing stock declines citing visibility issues as the main cause, and 42% saying production backlogs were an issue.

2. Rising costs without pricing power. Sudden input cost increases for items such as raw materials, transportation and labor strained margins. Lagging companies were slow to adjust prices and saw profit margins shrink, undermining investor confidence.

3. Failure to adjust to a post-pandemic world. Many companies failed to adjust to a post-pandemic market, with 77% of companies that saw stock declines citing COVID-related impacts and 29% citing labor challenges.

4. Market weaknesses. Companies that relied too heavily on specific markets or that used outdated supply chain resilience strategies were more vulnerable to external shocks. Underperforming core product lines and regional disruptions were among the challenges faced, with 27% citing weather events impacting stock levels. Inability to pivot quickly led to prolonged disruptions.

5. Execution failures and investor skepticism. Operational inefficiencies, particularly in individual business units that increased costs and dragged revenues overall, and vague recovery timelines undermined investor confidence.

Among the companies that underperformed, Cleo found that a failure to modernize the foundational technologies and data strategies was a core culprit to lower stock performance. “Supply chain strength isn’t built in the moment of crisis—it’s the result of strategic, long-term investments in integration, agility, and data-driven decision-making,” the report states.

The conclusions

Cleo offered a number of suggestions, such as diversifying supply chains and building agility, investing in technology, and incorporating dynamic pricing among others. But, my main takeaway is this: Supply chain has become a critical component in the success of a company. It’s sometimes difficult to gauge a private company’s success, but publicly traded companies offer insight into what investors value, and by extension, what privately owned company leadership should value as well. Cleo’s report shows that agile and proactive supply chains are valued by investors, and therefore a worthy investment for any company.

You can read the full report, which has many more details from the analysis and a more extensive list of suggestions to success, here.

A.I. Robinson

The automated tasks have included over 1 million automated price quotes and more than 1 million processed orders, he said in a release announcing the milestone. While Robinson first introduced AI a decade ago, it has ramped up usage in recent years and is now leveraging the technology to provide price quotes, process orders, acquire trucking capacity, set appointments for pickup and delivery, check on loads in transit. GenAI is now being utilized to supply tracking updates. Among the updates the company is working on is voice capability to contact carriers for missing status updates and building an AI model for responding to customer requests for tracking updates.

Tariff pass-throughs

Additionally, 42% have shifted suppliers or sourcing regions already in response to tariff changes. “Businesses continue to face difficult decisions about how to manage changing cost structures, but the past five years of disruptions and inflation have helped prepare them for this moment,” said Pascal Yammine, CEO of Zilliant. “While this data outlines the strategic approaches companies are taking to maintain profitability in this volatile environment, it will be crucial for them to be transparent with customers, partners, shareholders and other stakeholders about their decision making and avoid potential backlash.”

What I read this week

Tariff uncertainty could be creating an environment where cyber criminals can thrive. … Alibaba Group’s Yikun Shao shares how small and midsized businesses can navigate tariffs. … Continued disruptions are a boon to the supply chain risk management market, which is projected to grow to $5 billion by 2032. … SourceDay has launched two new indexes designed to predict supply chain volatility before it hits. … Retail sales rose in March as consumers looked to lock in deals ahead of tariffs. … GNC has found inventory accuracy success with the use of drones. … U.S. imports increased in March, and rose 9.1% in the first quarter of the year says S&P Global Market Intelligence.