Lorry Trans

Main Menu

  • Home
  • Trucking
  • Cargo
  • Shipping Transport
  • Air Freight
  • Capital

Lorry Trans

Header Banner

Lorry Trans

  • Home
  • Trucking
  • Cargo
  • Shipping Transport
  • Air Freight
  • Capital
Air Freight
Home›Air Freight›Logistics’ mad race to keep going

Logistics’ mad race to keep going

By Michael K. Davidson
June 24, 2021
0
0



The past few years have been turbulent for the logistics industry, which can lead many supply chain professionals to ask, “What happened to predictability?” “

In particular, 2020 has been a chaotic year of sudden shutdowns, jerky starts, dips, drops and explosive surges, all while trying to reroute assets on the fly. As a result of this unpredictable, pandemic-induced year, business logistics costs in the United States fell 4.0% to $ 1.56 trillion, or 7.4% of gross domestic product (GDP ) of US $ 20.94 trillion in 2020, according to the Supply Chain Management Professionals Council (CSCMP) 32nd State of Logistics Annual Report.

The main driver of this decline was the drop in inventory holding costs, which fell by 15%, due to the sudden drop in manufacturing and trade early in the year caused by pandemic shutdowns.

This means that transport volumes have also decreased. However, the costs of many transportation and warehousing services have risen as networks face capacity shortages, port congestion and major shifts in consumer demand as well as assets that could not. not be deployed or redeployed effectively. According to the report, 2020 exposed logistics systems that are optimized in terms of cost and efficiency, but fragile and lacking resilience in the face of disruption.

“The disruption of supply chains in 2020 created chaos that imposed gigantic demand on logistics, pushing up prices for logistics services despite a shrinking economy,” said Michael Zimmerman, one of the authors of the report and partner of Kearney consulting firm at a press conference. press conference. “At the same time, due to the stoppage of economic activities during the closures and the decrease in financial costs, logistics costs represent a lower percentage of GDP at 7.4% compared to 7.6% in 2019. “

SECTOR BY SECTOR BREAKDOWN

Some segments of the market weathered the storm better than others. Here’s a quick look at the performance of some of the key modes and segments of the logistics industry. (For a more in-depth analysis, see the report itself, which can be downloaded from CSCMP website.)

  • Road freight: Trucking, the largest segment of logistics spending in the United States, fell 1.6% year-on-year. A strong fourth quarter and continued economic recovery, however, indicate that rates will remain high through 2021. One of the positives of the pandemic is that the need to avoid ‘touch’ processes has driven many companies from trucking to finally embrace digitization. New digital technologies, such as online freight booking and digital nomenclature, are expected to lead to improved service levels in the future, the report predicts.
  • Parcel: Homebound consumers blew e-commerce up in 2020, increasing 33% to $ 792 billion or 14% of all retail sales. This rapid increase led to a 24.3% year-over-year increase in parcel shipping spending, which totaled $ 118.6 billion, but it also forced senders to scramble to adjust. their offers and delivery solutions.
  • Rail: Volumes and revenues declined overall for the rail industry, with spending falling 11% year-on-year to $ 74.3 billion. This decrease is explained by the reduction in volumes in industrial products and coal. Intermodal, however, saw smaller declines as high trucking prices prompted some shippers to switch modes.
  • The water: Logistics costs associated with shipping fell 28.6% year over year, in part due to a one-time reclassification of the report’s methodology. However, the decline in exports and traffic on inland waterways would have kept costs very low regardless of the recalculation. Prices and volumes, however, skyrocketed in late 2020 as retailers restocked and have remained high ever since.
  • Air freight : Air freight costs totaled $ 96.5 billion in 2020, an increase of 9% from 2019. Fares remain “shockingly high” even in mid-2021, as most airlines fail to meet. no discounts from the cancellation of passenger flights in 2020. The authors expect demand to continue. exceed supply in 2021.
  • Storage : The boom in e-commerce has spurred a high demand for warehouse space, especially in urban areas. At the same time, warehouse flows have become more complicated and working conditions remain tense, leading more and more warehouses to turn to automation.
  • Freight Shipping: As volumes have declined in this segment, higher tariffs have led to increased revenues in 2020. The report predicts that the freight forwarder will face stiff competition as more traditional suppliers face new digital startups, with carriers seeking to become end-to-end suppliers and to the ambitious initiatives of Amazon and Maersk. They also predict more mergers and acquisitions to come.
  • Third-party logistics providers (3PL): While many 3PLs saw higher revenues in the last year, some have seen cost increases which have hurt their profitability. The report’s authors predict that as the supply chain and logistics become more complex, the industry will continue to grow.

MORE CHANGE TO COME

Despite the upheavals of the past year, the report’s authors are optimistic. Logisticians have proven to be able to quickly abandon old plans, solve new problems and manage disruptions. This adaptability will serve logistics professionals well in the future, as the report predicts that the aftermath of the pandemic and “new surprises” will force logistics professionals to continually modify their plans.

“There is no relief in sight,” Zimmerman said.

The list of potential future disruptors includes the multishoring trend, continued technological advancements, and climate-related disasters, to name a few.

The authors of the report also predict that the cost of logistics will increase as the scope of what the field encompasses increases. As an example, they cite last mile delivery, which was once a “home” activity carried out by consumers and is now increasingly commercial.

After last year’s tensions, logistics managers are focusing on rebuilding their supply chains to be more resilient. Logistics Status Report the authors do not expect these changes to be minor. They predict that in 2021 and beyond, leaders will fundamentally rethink and rethink their logistics networks. “In 2021, even if conditions turn out to be less volatile, the changes could be more profound,” the report concludes.

the Logistics Status Report is written by the consulting company Kearney for the industry association, the Supply Chain Management Professionals Council. It is sponsored by Penske Logistics.



Related posts:

  1. Taiwan’s China Airlines says pilot quarantines will impact cargo operations
  2. Air Cargo Container Market Forecast to 2027
  3. Air Cargo Unit Loading (ULD) Device Market Report 2021 by Global Key Players, Types, Applications, Countries, Size, Forecast Till 2027
  4. US and Canadian pilots’ unions fight over Cargojet and fatigue rules
Tagsair freightsupply chainsunited states

Recent Posts

  • Bamberg Airport plays a part in Aviation Week |
  • Rithm Capital Corporation (NYSE:RITM) Receives Average “Moderate Buy” Recommendation From Brokerages
  • Receiver scrambles to make truckers pay after CoreFund Capital abruptly shuts down
  • Low water levels mean the Rhine is days away from being closed for freight | Germany
  • How China’s military drills around Taiwan will disrupt global shipping

Archives

  • August 2022
  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • November 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021

Categories

  • Air Freight
  • Capital
  • Cargo
  • Shipping Transport
  • Trucking
  • Terms and Conditions
  • Privacy Policy