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Home » Good news, bad news (and maybe some more good news)
Perspective

Good news, bad news (and maybe some more good news)

August 18, 2015
Toby Gooley
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The Great Recession may have ended in 2009, but its impact continued to be felt by individuals, businesses, and entire industries for years afterward. So it was hard not to feel almost giddy when Rosalyn Wilson, author of CSCMP's Annual "State of Logistics Report," presented by Penske Logistics, declared that 2014 was "the best year for U.S. logistics" since 2007. Wilson meant that—with a few exceptions—shipments, tonnage, and revenues for the transportation modes and third-party logistics providers (3PLs) were higher in 2014 than they had been in years. She also said we're likely to see sustained growth in freight volumes through the rest of 2015 and into 2016.

But let's not break out the party hats just yet. Although that is indisputably good news for shippers, carriers, and service providers, it doesn't mean there's nothing to worry about. In fact, sustained growth in freight volumes will exacerbate the logistics world's biggest concern: capacity. As Wilson states in the report, for the rest of this year, at least, capacity will not keep pace with demand, and "most of the problems that the freight logistics industry will face in the next three years will boil down to capacity issues." Yet Wilson is not completely pessimistic on this count. If U.S. economic growth slows somewhat in the coming months, she writes, "the industry should make some positive gains in matching capacity to demand."

This same "good news, bad news (and maybe some more good news)" outlook is also evident in some of the sector-specific analyses in this issue. For example, in his article on the 3PL industry, Adrian Gonzalez begins by noting that mergers and converging business models are changing the services 3PLs are offering to shippers (the good news). But then he says that many shippers won't fully benefit from those trends because they treat 3PL services as a commodity and continually try to force down pricing (the bad news). The article concludes with a recommendation that shippers and 3PLs focus on working to mutual advantage (maybe good news).

You'll find similar information in the other sector analyses in this issue. These articles by respected consultants and analysts provide an in-depth look at the topics discussed in the "State of Logistics Report," which is summarized in our cover story. In addition to third-party logistics, they include trucking, rail, ocean, and air transportation; warehouse site selection; inventory; technology; and e-commerce. They don't always agree in every detail with each other—or with the "State of Logistics Report," for that matter—but they all have one thing in common: They'll keep you informed about major trends and how you could respond to them, now and in the future. I hope you'll read them all.

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    Contributing Editor Toby Gooley is a freelance writer and editor specializing in supply chain, logistics, material handling, and international trade. She previously was Editor at CSCMP's Supply Chain Quarterly. and Senior Editor of SCQ's sister publication, DC VELOCITY. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.

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