CSCMP's Supply Chain Quarterly
October 23, 2018
Perspective
Perspective

A wild ride ahead

Comment
This year's annual "State of Logistics Report" explains how shippers need to downshift to face the steep road ahead.

For most of the past decade, shippers have been in the driver's seat when it came to logistics. Rates were relatively flat, and there was a wide choice of modes and transportation providers to ship goods. Shippers had a clear road before them with lots of leverage in negotiating contracts with their carriers. While capacity was tight, it was manageable, as the United States was still in recovery mode following the Great Recession.

What once was fairly smooth travel for shippers has now changed to what the 29th Annual "State of Logistics Report" is calling a "Steep Grade Ahead." This exclusive report is issued by the Council of Supply Chain Professionals (CSCMP), authored by A.T. Kearney, and presented by Penske Logistics. It provides an in-depth view of the logistics industry within the United States and its impact on the overall economy. It outlines the key factors affecting the management of today's robust supply chains as well as their direct impacts on various industry segments, such as transportation (trucking, air, water, and rail), warehousing, and third-party logistics. The report also discusses new technologies that have the potential to alter the landscape before us.

Here are just a few of the numbers that reflect the sharp increases experienced this past year. The cost of logistics for U.S. business was 6.2 percent more in 2017 than in 2016. Logistics now accounts for a whopping US$1.5 trillion of the U.S. economy. E-commerce grew 15.5 percent to US$448.3 billion and now represents 9.1 percent of U.S. gross domestic product (GDP). Following the expansion of the Panama Canal, East Coast ports saw their businesses grow by 7.9 percent.

All of these figures reflect a robust industry which, barring a major economic event, should continue to see growth and prosperity in nearly every aspect of the supply chain. In other words, there is a lot of the economic "pie" to go around.

And speaking of pie, this annual State of Logistics issue neatly slices the supply chain into digestible portions. In the pages that follow, you will see expert analyses of trucking, rail, ocean, air freight, inventory management, warehousing, third-party logistics, and technology.

Regardless of whether you are a shipper who needs to move goods, or a carrier providing those moves, we hope that the knowledge you gain in these pages will help create a smoother journey ahead.

David Maloney is editorial director of CSCMP's Supply Chain Quarterly.

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