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Costs for everything — from big-rig haulers and rail transportation to airfreight, parcel carriers and storage — have risen steeply since the middle of last year. And demand doesn’t show any signs of slowing down, according to the Council of Supply Chain Management Professionals’ annual State of Logistics report.
In 2017, total spending on logistics rose to a record of nearly $1.5tr, up 6.2 percent from the year before, and about $250bn more than companies spent on logistics in 2008. Rising interest rates, the higher price of fuel and impending tariffs on imports are expected to add to business expenses in the coming year, the report’s authors said.
A year ago, the freight market was just showing signs of picking up after nearly two years of excess capacity, said Sean Monahan, a consultant with A.T. Kearney and one of the authors of the annual report.
“Many shippers had been lulled into a very soft market, costs were coming down and it was a beneficial fuel market,” Monahan said. “That’s when things started to go crazy,” he said. “I think many organizations were caught a bit flat-footed.”
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