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Home » "Accelerating into Uncertainty"
Perspective

"Accelerating into Uncertainty"

August 23, 2017
Toby Gooley
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Read the 2017 "State of Logistics Report," and you'll quickly see why the authors, consultants with the global management consulting firm A.T. Kearney, chose the title above for their annual research paper. The report's current iteration—the 28th—balances a generally positive assessment of the U.S. economy with the impact of the fast-moving, disruptive forces buffeting the logistics and transportation industry.

The "State of Logistics Report," 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 includes a narrative about the macroeconomic environment impacting logistics; analysis of developments over the past year that have affected business logistics costs; a strategic overview of the state of the industry; and potential scenarios for logistics in the coming years.

I won't go into detail here—you can learn more in our cover story, and I encourage you to read the entire report, which is available free to CSCMP members. But let me whet your appetite by mentioning just a couple of the principal findings.

Most notable is that U.S. business logistics costs fell by 1.5 percent in 2016, the first decline since the Great Recession in 2009. Overcapacity, slack volumes, and rate pressures in several sectors caused costs to fall across all of the major components of U.S. business logistics costs, including transportation, inventory, and administration, even though energy prices rose. This is the second consecutive year in which energy prices and logistics costs have moved in different directions, confirming, in the authors' estimation, that consumer demand, and not energy prices, is now the primary factor in logistics costs.

The report identifies other profound changes that were once on the horizon but are already on our collective doorstep. "Demand patterns are shifting, technological advances are altering industry economics, and new competitors are challenging old business models," they write. While these changes will lead to a "fully digital, connected, and flexible supply chain," according to the report, they will also create new winners and losers. Those losers may well include some employees, whose jobs will be permanently altered—and in many cases eliminated—by automation, artificial intelligence, and other technologies.

To help you keep up to date with these and other developments, CSCMP's Supply Chain Quarterly has published this, its eighth annual special issue on the "State of Logistics." Our cover story summarizes some key points from the 2017 "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.

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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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