Could 2017 be a pivotal year for logistics?
According to the 28th Annual Supply Chain Management Professionals (CSCMP) “State of Logistics Report® titled Accelerating into Uncertainty, 2017 could be a pivotal year for logistics for these reasons:
Demand patterns are shifting, technological advances are altering industry economics, and new competitors are challenging old business models. This year could bring significant moves that reshape individual sectors and even the industry as a whole. Major business combinations, large-scale shifts in distribution flows, deep capacity cuts, massive infrastructure investments—anything is possible.
The 46 page report, authored by A.T. Kearney and presented by Penske Logistics, shows the first decline in United States Business Logistics Costs (USBLC) since 2009 despite a rise in energy costs. Since this is the second year in a row that energy costs and logistics coasts have moved in the opposite directions, the report states this indicates that energy prices are no longer the primary factor for logistics costs. While overall transportation costs fell 0.7 percent in 2016, spending on parcel delivery services rose 10 percent, confirming the impact of consumer demand for e-commerce deliveries and indicating the consumer has become the driving force behind logistics spending.
Some of the highlights of the report include:
- U.S. economic growth will be strong in the near term.
- Rising interest rates and an appreciating U.S. dollar could increase the costs of doing business.
- Businesses appear to be cautious in adding inventory under the cloud of uncertainty.
- Fluctuations in truck tonnage demand to continue as businesses adjust their outlook over time.
- Global trade growth is slowing as protectionist measures rise
You can watch the entire presentation of the report here (go to around the 9 minute mark if you want to skip all the introductions):
You can also order the PDF report for $295 from CSCMP here, or you can request the full report for free directly from A.T. Kearney here.
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