We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • INDUSTRY PRESS ROOM
  • SUBMISSIONS
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
  • STRATEGY
  • GLOBAL
  • LOGISTICS
  • MANUFACTURING
  • PROCUREMENT
  • VIDEO
    • News & Exclusives
    • Viewer Contributed
    • CSCMP EDGE 2022 Startup Alley
    • Upload your video
  • PODCAST ETC
    • Podcast
    • White Papers
    • Webcasts
    • Events
    • Blogs
      • Reflections
      • SCQ Forum
    • Mobile Apps
Home » Logistics costs at a turning point
Perspective

Logistics costs at a turning point

July 26, 2016
Toby Gooley
No Comments

The annual release of the "State of Logistics Report" is a big event. The annual research paper, issued by the Council of Supply Chain Management Professionals (CSCMP) and presented by Penske Logistics, is the only report to provide a comprehensive, quantified view of logistics' place and influence in the U.S. economy. In addition, it reviews developments of the past year that have affected business logistics costs in various categories, including transportation, inventory, and business administration.

The current iteration of the "State of Logistics Report"—the 27th—incorporates several changes. This is the first time the consulting firm A.T. Kearney has authored the report; previously, it was written by transportation analyst Rosalyn Wilson, who took over in 2004 following the death of the original author, Robert V. Delaney. There are some new data sources, and some calculation methodologies and assumptions have been modified. Also new this year are: a narrative about the economic environment impacting logistics; insights from shippers, carriers, and analysts; and a strategic overview of the state of the industry.

Fittingly, this year's report is titled "Logistics in Transition: New Drivers at the Wheel." That title reflects not just the changes mentioned above but also—and more importantly—the authors' finding that the drivers of business logistics costs changed significantly in 2015. Strong growth in business-to-consumer (B2C) e-commerce shifted more volume (and a bigger share of shippers' budgets) to parcel and express. A decline in demand for coal and falling oil prices led to a drop in spending on rail and pipeline transportation, and lower fuel prices drove down fuel surcharges in all modes. Overall, U.S. business logistics costs rose just 2.6 percent from 2014 to 2015, a little more than half the average annual increase from 2010 to 2014.

The report identifies other profound changes on the horizon. Consumers and e-commerce, the authors say, may eventually replace energy as the principal factor in transportation costs. Moreover, the rising cost of capital is pushing up inventory carrying costs even though inventory levels remain flat. Infrastructure shortcomings, new technologies, operational constraints like regulations and driver shortages, and accelerating demand for greater speed and accuracy will also place new pressures on shippers, carriers, and logistics service providers, the report suggests.

To help you keep up to date with these and other developments, CSCMP's Supply Chain Quarterly has published this, its seventh annual special issue on the "State of Logistics." Our cover story summarizes some key points from the 2016 "State of Logistics Report." We follow that with sector-by-sector analyses by respected consultants and analysts of trucking, rail, ocean, and air transportation; warehousing; inventory; technology; and third-party logistics. These analyses 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 might respond to them, now and in the future.

This article was revised and updated on August 26, 2016.

Logistics
    • Related Articles

      2014: A rewarding year for U.S. logistics

      A tale of transition

      A supply chain lesson from the oil fields

    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.

    Recent Articles by Toby Gooley

    National Forklift Safety Day 2022 connects safety with labor challenges

    Navigating the new normal

    On top of the (business) world

    You must login or register in order to post a comment.

    Report Abusive Comment

    Most Popular Articles

    • Report: Sagging freight stats show that trucking sector is returning to its historic mean

    • Survey: parcel delivery drivers are frustrated by using their own smartphones for work

    • Heavy transport across two continents

    • Survey: most Americans unaware that truckers face shortage of parking spaces

    • Supply chain executives not yet seeing expected results from technology investments

    Featured Video

    20221107korber large vs

    Enhancing Customer Experience with Your Supply Chain Strategy

    Viewer Contributed
    With the rise of e-commerce, many businesses have had to transform their warehouses to handle online orders in addition to regularly scheduled inventory shipments. This means warehouses need more information than ever before to ensure they can meet customers' needs. As a result, companies need to select warehouse...

    FEATURED WHITE PAPERS

    • Three layers of forklift safety: Promoting operating best practices

    • The Complete Guide to Automated Packaging

    • Five tips for parcel success in 2023

    • Guide to Pallet Rack Safety

    View More

    Subscribe to Supply Chain Quarterly

    Get Your Subscription
    • SUBSCRIBE
    • E-NEWSLETTERS
    • ADVERTISING
    • CUSTOMER CARE
    • CONTACT
    • ABOUT
    • STAFF
    • PRIVACY POLICY

    Copyright ©2023. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing