By Lisa Henthorn, V.P., Marketing Communications
Business is booming for the logistics industry, according to the 26th annual “State of Logistics Report” issued by the Council of Supply Chain Management Professionals (CSCMP). Logistics costs accounted for 8.3 percent of U.S. GDP last year, rising 3.1 percent to nearly $1.45 trillion in 2014, marking the best year for U.S. logistics since the start of the Great Recession in 2007.
With good news comes some hiccups though, as a shortage of everything from truck drivers to rail equipment threatens to hinder momentum. Here are a few key takeaways to consider from the 2014 report:
- Driver shortage: The American Trucking Association estimates the driver losses to retirement to be between 35,000 and 40,000 workers. Higher wages may attract younger drivers, likely resulting in higher freight costs.
- Booming rail traffic: Between 2009 and 2013, freight railroads invested an average of $23 billion per year in infrastructure and equipment. In 2015, that number is expected to rise to $29 billion, and the industry is expected to hire 15,000 new employees.
- West Coast recovery/East Coast gains: While the labor dispute out west has been resolved, East Coast ports saw the biggest percentage gains due to the previous congestion. Experts are eager to monitor the gains as a temporary blip on the radar, or a permanent solution for shippers.
Eyefreight keeps a pulse on the current state of the T&L industry and prides itself on being nimble, adaptable and collaborative. We’ll continue to monitor how our cloud-based TMS can effectively navigate seemingly inevitable changes in the upcoming years, whether it’s freight costs or otherwise.
By finding more efficient ways to distribute, savings can be found in nearly every facet of distribution, from inventory management to transport planning, enabling companies to take control of operational and cost-related shipping variables through increased visibility, optimization and collaboration in even the world’s most complex shipping markets.