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2018 State of Logistics Report: Steep grade ahead

This year’s logistics trends are pointing to a single scenario for 2019: a steep grade ahead. As demand outpaced supply in every sector of logistics, carriers have been in control. A variety of factors—from high fuel costs to constricted labor markets—will conspire to keep prices high.

By ·

Rising volumes. Capacity shortages. Bold price increases. Across all sectors, for all types of shippers. Through most of 2017 and 2018, the story of logistics industry has been inflationary. It simply costs more to move and store things now than in the past. And in general, this trend is likely to continue, according to the Council of Supply Chain Management Professionals’ 2018 State of Logistics Report authored by A.T. Kearney.

Reduced available capacity and high prices have resulted in large part from a strong economy. Most indicators call for the strong economy to continue through 2019 and beyond, despite some recent wobbles and concern that the Fed rate increases will trigger a recession. The capacity crunch has not been helped by uncertainty about big, technology-driven changes coming to most sectors of the industry. While those changes are indeed coming and will be profound, they are not likely to arrive soon enough to make a difference in 2019. Thus, shippers will need smart strategies to address the complex tradeoffs inherent in a tight logistics market.

The industry outlook is clearer than it was a year ago. Back then, uncertainties suggested four different scenarios for how 2018 would play out. This year, all trends point to a single scenario: a steep grade ahead. As demand outpaced supply in every sector of logistics, carriers have been in control. A variety of factors—from high fuel costs to constricted labor markets—will conspire to keep prices high. To contain costs and ensure stability, shippers must become more efficient, in part by leveraging emerging technological tools.

This complete article is available to subscribers only. Log in now for full access or start your PLUS+ subscription for instant access.

By ·

Rising volumes. Capacity shortages. Bold price increases. Across all sectors, for all types of shippers. Through most of 2017 and 2018, the story of logistics industry has been inflationary. It simply costs more to move and store things now than in the past. And in general, this trend is likely to continue, according to the Council of Supply Chain Management Professionals’ 2018 State of Logistics Report authored by A.T. Kearney.

Reduced available capacity and high prices have resulted in large part from a strong economy. Most indicators call for the strong economy to continue through 2019 and beyond, despite some recent wobbles and concern that the Fed rate increases will trigger a recession. The capacity crunch has not been helped by uncertainty about big, technology-driven changes coming to most sectors of the industry. While those changes are indeed coming and will be profound, they are not likely to arrive soon enough to make a difference in 2019. Thus, shippers will need smart strategies to address the complex tradeoffs inherent in a tight logistics market.

The industry outlook is clearer than it was a year ago. Back then, uncertainties suggested four different scenarios for how 2018 would play out. This year, all trends point to a single scenario: a steep grade ahead. As demand outpaced supply in every sector of logistics, carriers have been in control. A variety of factors—from high fuel costs to constricted labor markets—will conspire to keep prices high. To contain costs and ensure stability, shippers must become more efficient, in part by leveraging emerging technological tools.

 


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Article Topics

AT Kearney · CSCMP · Trucking · All Topics
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A variety of fresh challenges will surface for global traders in January and beyond
Global Supply Chain Pricing May Face New Pressures in 2019
The global economy started 2018 with strong, synchronized growth, but the momentum faded as the year...

IHS Markit’s New Economic “Predictions” for 2019 and Impact on Global Supply Chains
The U.S. will remain “above trend,” while other key economies will experience further...
Global Kuehne + Nagel Indicators Signal Global Supply Chain Resilience
So far this year, international merchandise trade has risen by 10.6%. Emerging markets and North...