Things are looking up for supply chain sector, according to the Council of Supply Chain Management Professionals (CSCMP) Annual State of Logistics Report.
"The demand-supply balance shifted much more dramatically this year when compared to last year," explains Sean Monahan, A.T. Kearney partner and report co-author. "In 2015 it was a dark story if you were a carrier. There was a lot of excess capacity in the marketplace. We saw that starting to turn around in 2016 and continued to accelerate into 2017."
Here are some highlights from the report:
• United States business logistics costs are at $1.14 trillion, or 7.7% of nominal GDP, in this year's report
• The costs of shipping goods and services is rising, as seen by increased capacity rates, which is leading to higher supply chain costs for corporations, and the consolidation of smaller trucking and logistics companies that cannot keep pace. Challenges in this space have resulted in high-level technological innovations that has shaken the industry out of outdated stereotypes. Rising fuel costs also factor into the equation
• The continued growth of e-commerce pushed parcel shipment volume up by 7% in 2017, to nearly $100 billion; forecasts expect that to rise at similar levels for the next few years. This has a strong effect on the supply chain, in the areas of more visibility for both the corporation and the customer; the need for more warehousing which in many cases will be smaller and closer to large population centers; and designing more responsive and flexible logistics networks, just to name a few
There is a continuing truck driver shortage in the transportation industry, which has a multitude of effects, one of which could be slower package delivery times for Americans, who by the day order increased goods and services online. Trucks transport 70% of consumer goods in this country
• Speaking of technological innovations in the supply chain, here are several exciting concepts that look to have high impact across the next decade: uberization of freight; blockchain; fully autonomous trucks; artificial intelligence applications; truck platooning; electric vehicle fleets; autonomous mobile robots; and drone and unmanned aerial vehicle delivery systems.