This is the definitive report on the State of Logistics and we hope you find it an enjoyable and highly informative read. We seek to strike the balance between in-depth analysis and distilled viewpoints that allow readers to get quick insightful takes on the overall logistics market in the USA and its costs to shippers (by component and as a % of GDP) as well as the latest trends for the key modes and nodes. Enjoy!
Excellent compilation of market information in the recent State of #Logistics report released by Kearney, Penske Logistics and CSCMP - Council of Supply Chain Management Professionals. While the focus of this report is on the Americas, the general sentiment speaks to all regions - demand (and consumer confidence) remains somewhat muted but Geopolitical events continue to drive significant short term impacts on the supply/demand balance (and therefore rates). All eyes remain on the ongoing conflicts in the Middle East and Europe and the increasingly tenuous relationships between China, the US, Russia and North Korea. Throw in an upcoming presidential election and a current ILA negotiation, and, in short, Global Supply Chain stability and resiliency certainly continues to face incredible challenges.
One approach to alleviating some of these risks is #nearshoring, and while I agree there is substantial value in getting your hands around the full Supply Chain, for most manufacturing that likely comes at an increased delivered cost and may represent a further driver of inflation (which would likely hyper accelerate particularly if significant tariffs are on the horizon).
All that said, I would push back on one comment in the Introduction.
"But for the time being, the advantage still resides with shippers, which now have a continued opportunity to lock in lower rates, diversify and reset their carrier portfolios, and otherwise boost their logistics resilience."
From my perspective, this is the time to look to deepen #partnerships with your high performing carriers rather than going to the market to "reset" with a new carrier who may not understand your business or customer requirements. Your incumbents will most certainly be aware of the market and bring reductions to the table, particularly if a longer term view of volume and commitments are presented.
Great read, and thank you to the team for pulling this all together! 👏
Read Kearney’s latest point of view on the US Logistics Market. The report covers key trends and outlook for different logistics segments #kearney#logistics#transportation#supplychain
Excited to share the latest State of Logistics Report authored by Kearney!
In the #parcel and #lastmile space, we continue to see shippers turn away from “single sourcing” and diversify carrier bases to optimize for customer experience and speed.
Read Kearney’s latest market insights, trends, and proven strategies for enabling profitbale growth here.
There’s little disagreement among leading manufacturers about what they must do to cope with ongoing supply chain disruptions. But there appears to be a significant gap between intention and action.
COVID-19 may have subsided, but its effects on global commerce are still very much with us. To learn how manufacturers are redesigning their supply chains in the face of those challenges, the Kearney consultancy teamed up with the World Economic Fund to survey 300 operations executives.
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I appreciate Benjamin Gordon for sharing his thoughts about The White House Council on Supply Chain Resilience.
A few thoughts of my own...
- Clarity of Purpose. It seems like there is a lot of stuff getting put into this council's bucket. That's a common challenge for supply chain teams. Are we trying to lower costs, or increase service levels, or improve sustainability? The truth is that doing anything meaningful across the supply chain is difficult because it has to be cross-functional. In a business, supply chain encompasses logistics, operations, and procurement. But it also touches on HR, IT, Finance, Marketing, and more. The equivalent at the National level is that you need to engage Energy, Commerce, Labor, Defense, Intelligence, Economic Advisors, etc. So, right from the start, there needs to be a clear message about what this group is expected to do.
- Engagement with Industry and Academia. Supply chain management often looks easy from the outside; the details and the complexity that comes from interrelationships are the things that make it tricky. There are lots of professionals out here with valuable experience and insights to share - but it's not clear how this council is going to engage them.
- Navigating Tradeoffs and Conflicts. There are going to be folks on either side of every issue. A great example is one that Ben highlighted: the volatility in the freight market. Many would argue that this was a predictable correction after a pretty crazy couple of years during COVID. Also, thinking about history, it wasn't that many years ago that we tried to control this volatility by regulating transportation markets. So, are we okay with volatility, or do we want regulation, or is there some other path that would be better?
The good news is that supply chains are in the spotlight.
Now, I hope that the council can bring these government agencies together with private sector stakeholders to develop meaningful improvements.
~Mr. Supply ChainⓇ#AlwaysBeLearning#SupplyChain#SupplyChainManagement#Economy
Managing Partner and CEO, Cambridge Capital and BGSA. Leading advisor and investor to supply chain and tech companies.
The White House just launched the Council on Supply Chain Resilience. Will it be effective?
My two cents, as discussed with Jeff Berman at Logistics Management Magazine:
"If I were advising the administration, I would encourage them to speak with supply chain CEOs from across warehousing, freight forwarding, truck brokerage, distribution, and technology. What I think the administration would learn is that we are far from successful when it comes to U.S. supply chains."
"Our weaknesses include tremendous volatility, which is reflected in the record number of bankruptcies in trucking and freight brokerage this year. They also include extremely high dependence on markets that are often not aligned with the U.S., including Chinese rare earths, Mideast oil, and others. Our supply chains suffer from data fragmentation that prevents decision makers from making holistic decisions based on the most relevant inputs. Lastly, we are increasingly lagging when it comes to investing in crucial supply chain technology."
"I hope the Biden Administration is consulting other supply chain industry sources so they can incorporate much needed improvements in the plan to strengthen American competitiveness.”
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I'm not surprised to see the POTUS announcing a new cabinet-level council focusing on the supply chain – The White House Council on Supply Chain Resilience. The Council will include representation from 25+ different sectors of the U.S. government because the supply chain really does impact that much of our daily lives.
This isn't the first step the federal government has taken to address supply chain stability – other actions leading into this include the Freight Logistics Optimization Works (FLOW) in 2022 and the Supply Chain Disruptions Task Force in 2021, which addressed short-term supply chain discontinuities. Prologis contributed to both of those efforts.
Glad to see the supply chain taking center stage. We are committed to continuing to partner with government leaders focused on the global supply chain.
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Nice! Carrie Forbes you will find this interesting.