BUSINESSES based in the US saw their logistics costs in 2017 rise by 6
BUSINESSES based in the US saw their logistics costs in 2017 rise by 6.2 per cent compared to the previous year, a report published by the Council of Supply Chain Management Professionals (CSCMP) has revealed. 'The demand-supply balance shifted much more dramatically this year when compared to last year,' explained management consulting firm A T Kearney partner Sean Monahan and co-author of the report. '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.'
The report said it sees a 'steep grade ahead. Carriers are in control as demand outstrips supply, while shippers try to 'create capacity' by improving efficiency wherever possible.
'The pace of spending increases became pronounced especially in Q4 of 2017, with the main drivers being a robust economic climate with growing demand, strong job market, rising wages, and while nothing new to the industry, significantly intensifying driver shortages,' said the report.
What the reports calls 'United States Business Logistics Cost' (USBLC) amounted to US$1.15 trillion or 7.7 per cent of gross domestic product in 2017, an increase of 7.6 per cent compared to the previous year, reported American Shipper.
It said the costs of shipping goods and services is rising, as indicated by higher capacity rates, which is triggering greater supply chain costs for corporations, and the consolidation of smaller trucking and logistics companies that cannot keep pace.
