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Logistics Sector has been modified but it remains stable, according to CSCMP

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Logistics Sector has been modified but it remains stable

According to a recent assessment by the Council of Supply Chain Management Professionals, the logistics sector displayed strength and resilience during the economic slump and coronavirus epidemic.

Last year, Michael Zimmerman, a partner at Kearney, reported that the resiliency of logisticians was put to the test at a June 24 event hosted by the CSCMP (www.cscmp.com). This year, the story is one of extreme adversity and adaptation. A shipper and a carrier had to adjust plans often as their methods of logistics began to break down.

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The study, issued on June 23, focused on the logistics industry and offered predictions about the future.


Results in company logistics rose, but transportation costs were shown to vary widely. Excess supply led to slower-than-anticipated growth in volumes and rates, which caused a reduction in motor carrier revenue of 0.6% at the end of the pandemic. Logistics costs were cut by 4% in 2020.

Logisticians foresee an increase. Although first-half volume and price declines had a large impact, lower loan rates along with a decreased inventory-to-sales ratio led to cost savings on inventory.

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Parcel prices increased by 24.3 percent because of changes in customer behaviour and growth in e-commerce. Volumes were down 11%, which caused the drop.Water transport decreased by 28.6%. Warehousing costs rose while inventory storage grew by 1.4%.

“Due to the worldwide pandemic, the national GDP has declined by 3.5%,” Zimmerman explained. Logistics spending decreased by $457 million (0.29%) in the larger U.S. economy. Overall, the global and US economies are showing signs of recovery, with the US GDP increasing by 7.7% in 2021 before falling to 4.5% in 2022.

In terms of last year’s disruptions to the supply networks, mayhem resulted. This led to increasing logistics costs despite the economy declining. In 2019, logistics costs represented 7.4% of GDP, compared to 7.6% in 2018.

Shippers and carriers alike should brace themselves for volatility, according to Zimmerman.We’re at the beginning of another tumultuous economic journey in 2021. Understanding what caused the wild ride can be found in consumer confidence.


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Zimmerman added buyers and sellers alike early in the outbreak. However, premature exuberance ensued as a result of the government stimulus. When the pandemic returned, it triggered financial upheavals. Supply chain firms’ continuously changing plans cause inefficiencies.

Kevin Smith, president of Sustainable Supply Chain Consulting, stated that inventory ratios are now nearly one-to-one. “This is novel. “And it means that businesses have one month’s worth of inventory.

In the early 2000s, these ratios would have been a concern due to the lack of visibility and current processes. However, he cautioned, it is not sustainable in the long term.

After 2022, what will happen? The message they got when speaking with clients was that this “just in time” strategy going ahead was not something they would be able to support.

Many existing tendencies have picked up speed because of the outbreak.

Bingham stated that “significant economic consequences will result from that change.”That does pay off. Investing in digitalization is likely to have a long-term and beneficial impact on the economy.

Author: Connor D. Wolf | Staff Reporter

Source: TTNews


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Logistics Sector has been modified but it remains stable, according to CSCMP
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