The Council of Supply Chain Management Professionals (CSCMP), Lombard, Ill., released the State of Logistics Report, written by A.T. Kearney, Chicago, and presented by Penske Logistics, Reading, Pa.

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 Securities and Exchange Commission (SEC) filings 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 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 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.

“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,” says Rick Blasgen, president and CEO of CSCMP. “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 logistics industry is at a new crossroads,” adds Michael Zimmerman, partner with A.T. Kearney and co-author of the report. “It has overcome a tough and exhausting year. Now, demand has softened, and growth is in doubt, but not to the point where a steep decline is visible.”

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