Stories Behind the State of Logistics Report

The big picture numbers in this year’s report such as total logistics costs, inventory levels, and carrier capacities all dropped sharply. Yet this was not totally unexpected given that 2009 was only marginally better than 2008, another tough year for companies in just about every business sector. But the real story on partnering and collaboration lie behind the numbers.

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If you haven’t yet read the 21st Annual “State of Logistics Report” from CSCMP (Council of Supply Chain Management Professionals), you really should take a few minutes out of your workweek to do so (it’s free to CSCMP members, $395 to nonmembers).

Researched and written by SCMR’s newest blogger, Rosalyn Wilson, the report contains a wealth of information to help managers better understand the current and future state of logistics and supply chain management. But there’s much more beyond the data alone.

The big picture numbers in this year’s report—total logistics costs, inventory levels, carrier capacities, for example—all dropped sharply. Yet this was not totally unexpected given that 2009 was only marginally better than 2008, another tough year for companies in just about every business sector.

But what I really like about the State of Logistics Report are the inferences that you can draw from many of the numbers. Take the downward trending on truckload capacity. As study author Wilson reports, capacity in this segment of the motor carrier industry is dropping at a dizzying pace. Part of this is due to consolidation in the industry, part to aging equipment being taken out of service and not replaced, and part to truckers just going out of business.

Certainly, this is not a good development. But what are the specific implications for logistics and supply chain managers? For one thing, dwindling carrier capacity—coupled with a gradual economic upturn—reinforces the wisdom of the old-fashioned virtues like partnership and collaboration. How so? Those shippers that have treated their carriers fairly and consistently when capacity are in a much better position to get the service they need when things get tight.

The same goes for a driver shortage, another industry trend spotted in the State of Logistics Report.  Fewer drivers can only exacerbate the tightening capacity constraints.

We recognize that in the real world notions like partnership and collaboration with your motor carriers (or providers of any transportation service for that matter) are honored as much in the breach as in the observance.  But when you read into research like the State of Logistics report, you realize that these “quaint” traits still have great currency.

About the Author

Frank Quinn, Editor Emeritus
Frank Quinn is Editor Emeritus of Supply Chain Management Review, considered the premier publication for supply chain executives. Frank was the founding editor of SCMR and has overseen its growth over the past 16 years. He has been covering the logistics and supply chain scene in various editorial and consulting positions for more than three decades. Frank is also co-author of the book Diagnosing Greatness: Ten Traits of the Best Supply Chains.

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