CSCMP's Supply Chain Quarterly
April 24, 2019
Direct Connection
Direct Connection

A mixed bag

The U.S. economy is growing. However, logistics capacity has not been able to keep up with increased demand, and costs are rising.

In June, the Council of Supply Chain Management Professionals (CSCMP), along with Penske Logistics, presented its annual "State of Logistics Report" in Washington, D.C. This year's report, authored by management consulting company A.T. Kearney, shows the challenges that carriers and shippers are facing as they try to adjust to market shifts that haven't been seen in years.

On the good news side of the equation, the U.S. economy is roaring back to life. U.S. gross domestic product (GDP) grew by 2.9 percent in 2017. The robust economy, however, is creating an increase in demand for logistics services, and in every sector,supply has not been able to keep up, according to the report.Meanwhile costs are on the rise. The report also found that U.S. business logistics costs increased 6.2 percent last year due in part to rising interest rates, a tight labor market, and higher fuel prices.

At the same time, old business models are being challenged by new demand patterns and competitors. The rise of e-commerce has radically changed customers' expectations for how and when they receive products and services. The report, for example, touches on the growing importance of last-mile delivery and same-day service.

Now more than ever, to compete in today's market you'll need a fully digital, connected, and flexible supply chain. Technology will play a key role in improving fulfillment and driving efficiency in this new environment, particularly in the areas of autonomous mobile robots, artificial intelligence, freight "Uberization," and blockchain. The report provides an innovation grid spanning from 2018 to 2028, laying out future and potential trends to keep an eye on.

How can CSCMP help you meet these challenges? The 2018 "State of Logistics Report," which outlines these trends, is complimentary for all CSCMP members as an exclusive member benefit and is available for purchase by nonmembers. I invite you to visit, click on the development tab, and select the "State of Logistics Report" under reports and surveys for more information.

Also, our EDGE conference will help you learn more about innovative technologies and practices that will help you compete in this changing world. It also will provide you with an opportunity to network face-to-face with supply chain leaders who are dealing with the same challenges as you are. You can learn where they succeeded and where they failed, and then go back home re-energized for making the leap forward.

Rick Blasgen is President and Chief Executive Officer of the Council of Supply Chain Management Professionals (CSCMP).

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