U.S. Logistics Costs Decelerated in 2015 - Global Trade Magazine
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  June 29th, 2016 | Written by

U.S. Logistics Costs Decelerated in 2015

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  • Disruptive forces, including technology, threaten to fundamentally change the rules of logistics.
  • Trucking is still plagued by a continuing driver shortage.
  • U.S. pipeline investment will account for 75 percent of all planned capital investment in transportation modes.

U.S. business logistics costs rose to $1.48 trillion in 2015, a 2.6 percent increase from previous year. This which represents a considerable slowdown in growth from previous years.

That was one of the major conclusions of the 27th Annual State of Logistics Report from the Council of Supply Chain Management Professionals (CSCMP).

The report provides an overview of 2015 supply chain industry trends and statistics. The report was authored by the global strategic management consulting firm, A.T. Kearney, and presented by Penske Logistics.

The report includes a focused narrative on the economic environment impacting logistics, insights from interviews with industry leaders including, shippers, carriers and analysts, a spotlight on relevant trends and a strategic point of view on the state of the industry.

The report states that the logistics industry is entering a new era. “Disruptive forces, including technology and operational constraints, threaten to fundamentally change the rules of the game,” the report concludes.

Among other highlights, the report finds that trucking companies are experiencing rate weakness and that rates and demand for transportation are soft, and continue to fall. Trucking is still also plagued by the continuing driver shortage. “Despite softening demand and slower rates,” the report states, “competition for drivers remains intense.”

The parcel and express sectors are are being fueled by business-to-consumer (B2C) ecommerce and omnichannel retail and continue to grow.

“Water shipping is in flux,” the report states. “Containerized shipping is experiencing significant overcapacity, creating a favorable rate environment for U.S. shippers.”

Airfreight is also experiencing overcapacity and falling rates. “Demand for airfreight services remains sluggish due to economic uncertainty, while overcapacity is being exacerbated by a shift to wide-body aircraft,” the report concluded.

With U.S. oil and gas production having surged in the past decade, pipelines are catching up with demand, the report finds. Interestingly, the report also concluded that U.S. pipeline investment will account for 75 percent of all planned capital investment in transportation modes.

On the rail front, the report finds that a steep decline in coal traffic and crude by rail, macroeconomic weakness, and a pause in the growth of intermodal traffic resulted in overall rail volume reduction.