Growth on the cards for US companies, despite continued struggles with their supply chains
Resilient logisticians are attempting to adapt, plan and shift to meet current and future demands
CSCMP’s State of Logistics Report has found that supply chains, though resetting, are still strained. A key metric the report measures is U.S. business logistics costs. (USBLC). In 2020, USBLC dropped 4% to $1.56 trillion, or 7.4% of 2020's $20.94 trillion gross domestic product (GDP).
The report also found that the k-shaped recovery of 2021 reflects the changed consumer habits. Hospitality, restaurants and airlines have all been industries that have struggled through the pandemic, whereas grocery, retail, home improvement and e-commerce have all prospered. E-commerce purchases have grown by 33% to $792 billion, representing 14% of all retail sales.
The report also found that the control tower concept is taking on an added importance, as resilience is most effective when paired with visibility. Companies need knowledge to make quick decisions, and the control tower serves as an information hub to enable better planning and reacting.
Sustainability efforts are also becoming increasingly important to supply chain leasers, with the efforts by the transportation sector increasing. This is as consumers are considering environmental impacts in their purchasing decisions, and governments around the world are instituting more stringent regulations.
Supply chains are having to continue to provide goods and services to the American public while dealing with tight capacity and volatile rising rates. The first half of 2021 has the highest rates the market has ever seen. However, the US economy is expected to grow 7.7% this year with advancements related to increased vaccinations and a return to ‘normal’.
The report is produced annually for the Council of Supply Chain Management Professionals (CSCMP) by global consulting firm Kearney and presented by Penske Logistics. Michael Zimmerman, partner at Kearney said, "Logisticians came off the ropes of a bruising 2020 with a new appreciation that while resilience from the capabilities they had built got them through the main disruptive rounds of the pandemic, 2021 is confirming that the ability to change plans and execute under adversity has risen to be the top priority."