State of Logistics: Annual reports lay the groundwork

For Logistics Management and our devoted readership, that season comprises July, August, and September, and the traditions come in the form or three annual reports that help us define the environment in which we now operate (July); highlight the carriers and service providers our readers say
are doing an exceptional job on the service front (August); and wraps up a with a report card of sorts on how shippers themselves believe they are doing in their operations (September).

This month, we put context around the 35th Annual State of Logistics Report; next month LM will offer the industry our 41st Annual Quest for Quality Awards; and then in September, LM continues its three-decade long partnership with the research team that will produce the 33rd Annual Study of Logistics and Transportation Trends.

The most important element about reports with this level of longevity is that we’re able to see and compare past data that has been measured in a similar framework over decades—allowing us to peer into the past.

Where have we improved? What have we done to improve? Where do we need to improve? Those three questions should be on the tip over every shipper’s tongue; and helping them arrive at those answers is the sole mission of Logistics Management. The reports and research that we offer during this season are at the very core of that mission.

Starting on page 20, contributing editor John Shultz kicks off the season by offering us his annual high-level take on this year’s State of Logistics (SoL) Report. As faithful readers are aware, the SoL is authored by global management consulting firm A.T. Kearney in partnership with CSCMP and Penske Logistics.

Now in its 35th year, it’s by far the most comprehensive report of its kind, encapsulating the cost of the U.S. business logistics system during the previous year (2023) and offering a snapshot of how economic conditions are shaping the current logistics landscape. This year, A.T. Kearney and CSCMP did the official release on June 18 at the National Press Club inside the beltway in D.C.—where, by the way, Schulz has been in attendance for over 20 years.

So, what did Schulz take out of this year’s report? “Last year the line ‘uncertainty is now a near constant’ resonated through the report, and the data only confirmed that queasy feeling most shippers couldn’t fight off during 2022 into 2023,” he says. “However, this year, the authors couldn’t help but praise shippers for navigating waters during a period when ‘no tide-table seems reliable.’”

Indeed, Schulz says that the one thing that came across in the initial presentation of this year’s SoL was how shrewdly logisticians have adapted to the crazy supply chain swings of the last four years. “They not only handled shortages of product, broken supply chains and all the rest, but while this was happening the tab for U.S. business logistics costs was $2.3 trillion last year, which translates to 8.7% of the national GDP. That’s kind of amazing when you think about it.”

Why is that number amazing? We need to remember that the U.S. business logistics costs figure was close to 20% of GDP in 1979, the last full year before national trucking deregulation occurred.

“That was a point the late Bob Delaney—who started this SoL report 35 years ago—always made while he was presented the report,” adds Schulz. “The fact that it’s now 8.7% indicates just how sharp and well managed this industry has become over the past 45 years—and it’s only getting sharper.”