Penske Logistics and the Council of Supply Chain Management Professionals (CSCMP) presented the thirtieth annual State of Logistics Report at the National Press Club in Washington, D.C. The logistics study was written by A.T. Kearney.

Amid a booming economy, United States Business Logistics Costs (USBLC) rose 11.4% to reach $1.64 trillion, or 8% of 2018’s $20.5 trillion gross domestic product (GDP).

The publication notes that supply chain capacity is tight enough that a number of major companies have reported in their SEC filings that they exceeded their 2018 supply chain budget spending.

Why are supply chain costs rising?

• The retooling of supply chains to account for more e-commerce sales; online purchasing increased by 14.2% last year. The need for smaller, more costly warehouses has spiked.
• Extremely high utilization of existing truck fleets limits available freight capacity and drives up rates.
• Increasing government regulations on driver hours-of-service causing smaller trucking firms to cease operations, consolidate or be acquired by larger transportation companies.
• Tight U.S. labor market and higher wages for truck drivers and warehouse workers; attracting and retaining labor in general remains challenging for transportation and logistics companies.

How are innovations driving today’s state-of-the-art supply chains?

• Silicon Valley has devoted time, energy and resources to automation and robotics with inventions like automated trucks and automated warehouses.
• Vehicle electrification will lead the way to a more sustainable transportation network.
• The upgrade to a 5G communications network is on the horizon, which will improve logistics operation execution; planning and management; and high-security encryption.

Rick Blasgen, president and CEO of CSCMP, commented, “This highly anticipated report contains the statistics and industry insights that will not only help our members do their jobs better, but also better prepare them for the business demands ahead. Not only do we definitively reveal the cost of logistics in the United States, but we also discuss technology and other forward-thinking applications for leaders to use as they improve their overall supply chain performance.”

“The State of Logistics Report is a great resource for keeping pace with the modern supply chain,” stated Marc Althen, Penske Logistics president. “It offers a wealth of industry information and we are pleased to once again support it.”

Since 1963, the Council of Supply Chain Management Professionals has been the preeminent worldwide professional association dedicated to the advancement and dissemination of research and knowledge on supply chain management.

Founded in 1926, A.T. Kearney is a global management consulting firm with offices in more than 40 countries.

Penske Logistics is a wholly owned subsidiary of Penske Truck Leasing.