State of Logistics Report reflects stronger US economy

The Annual State of Logistics Report, issued by the Council of Supply Chain Management Professionals (CSCMP), offers insights into a stronger US economy. The supply chain study is produced by management consulting firm A T Kearney and presented by Penske Logistics.

Among key highlights of the 2018 CSCMP State of Logistics Report:

•US business logistics costs, also known as USBLC, is 7.7% of GDP in this year’s report.

•Costs of shipping goods and services are rising, as seen by increased capacity rates, which is leading to higher supply chain costs for corporations, and the consolidation of smaller trucking and logistics companies that cannot keep pace. Challenges in this space have resulted in high-level technological innovations that has shaken the industry out of outdated stereotypes. Rising fuel costs also factor into the equation.

•Continued growth of e-commerce pushed parcel shipment volume up by 7% in 2017, to nearly $100 billion. This has a strong effect on the supply chain, in the areas of more visibility for both the corporation and the customer; the need for more warehousing which in many cases will be smaller and closer to large population centers; and designing more responsive and flexible logistics networks.

•A continuing truck driver shortage in the transportation industry has a multitude of effects, one of which could be slower package delivery times for Americans, who by the day order increased goods and services online. Trucks transport 70% of US consumer goods in this country.

•Speaking of technological innovations in the supply chain, here are several concepts that look to have high impact in the next decade: uberization of freight; blockchain; fully autonomous trucks; artificial intelligence applications; truck platooning; electric vehicle fleets; autonomous mobile robots; and drone and unmanned aerial vehicle delivery systems.

“The demand-supply balance shifted much more dramatically this year when compared to last year,” said Sean Monahan, A T Kearney partner and report co-author. “In 2015 it was a dark story if you were a carrier. There was a lot of excess capacity in the marketplace. We saw that starting to turn around in 2016 and continued to accelerate into 2017.”

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