Editor’s Note: The annual State of Logistics report came out in June. Supply Chain Management Review’s sister publication Logistics Management did a deep dive into the report.
Logistics professionals are receiving praise for navigating waters during a period when “no tide table seems reliable,” the 35th Annual State of Logistics (SoL) Report concludes. “Logistics executives and policymakers must simultaneously respond to upward and downward forces—to relatively high inflation and interest rates—and also to the reality that demand has not yet fully recovered.”
The latest SoL report was unveiled at the National Press Club in Washington, D.C., on June 18. It’s produced annually for the Council of Supply Chain Management Professionals (CSCMP) by global consulting firm Kearney and presented by leading third-party supply chain provider Penske Logistics.
The influential annual report offers a snapshot of the American economy via the lens of the logistics sector and its role in overall supply chains. The report concludes that “uncertainty is now a near constant” in the global economy.
By the numbers
Total U.S. business logistics costs for 2023 were $2.374 trillion. While that number seems high, it actually represents an 11.2% drop in total logistics costs from 2022. U.S. business costs accounted for just 8.7% of gross domestic product (GDP) last year, compared with 9.1% in 2022. By way of comparison, in the final year of regulated trucking in 1979, total logistics costs were nearly 20% of GDP.
Shippers should prepare for more volatility the rest of this year and into 2025, the report concludes. “Further diversification of the carrier market and reduced volume growth is likely to generate pressure on pricing—and open up additional opportunities for shippers to lock in low rates and enhance productivity,” the report adds.
Today’s soft market represents a chance for shippers to lock in low rates and strengthen relationships with their carriers on a non-transactional basis. “We don’t expect to see any sort of rate increases until well into the second half of this year,” says Josh Brogan, a partner with Kearney and a main author of the report.
That’s the 30,000-foot view of today’s logistics markets according to this year’s SoL. And as Logistics Management has done over the years, we’ve fully digested the latest report and have broken down its key components with some must-knows for shippers. Let’s take a deeper dive into what’s driving logistics in 2024 and beyond.
Read the full article: State of Logistics 2024: Waiting for the tide to turn
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About the Author
John D. Schulz, Contributing Editor, SCMR
John D. Schulz has been a transportation journalist for more than 20 years, specializing in the trucking industry. John is on a first-name basis with scores of top-level trucking executives who are able to give shippers their latest insights on the industry on a regular basis.
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