Warehousing, Economic Development, Logistics, Third-Party LogisticsCSCMP's annual State of Logistics Report presents an overview of the economy during the past year, key logistics trends, and the total U.S. logistics costs for 2018 (see chart). Here are some top takeaways.Macroeconomics: Economic slowdown expected and trade uncertainty volatile. The U.S. economy is flashing warning signs, as economic growth is forecast to slow and business and consumer confidence indicators suggest persistent concerns. Trade uncertainty ripples through logistics markets, as even fears of trade tensions can cause inventory buildups that shift demand for logistics services.Motor carriers: Excess demand, tight capacity, high rates. Freight rates are easing back to "normal" levels, with more capacity now available. Parcel and last mile: Relentless competition. Amazon is training customers to expect ever-faster deliveries—and training its competitors to chase those expectations.Rail: Finally profitable, although… Precision railroading—a disciplined approach to asset and laborproductivity—has caused shippers to experience localized service failures and extended transit times. Can railroads retain prfitability while improving service to retain long-term customers?Water and ports: Turmoil coming from IMO 2020 sulfur regulations. Carriers must gear up for implementation of the IMO 2020 sulfur regulations, which will require significant capital expenditures or purchase of expensive low-sulfur fuel.Air: Soaring on e-commerce and making strides in digitization. E-commerce—and consumer demands for quick delivery—continues to fuel a longer-term positive outlook for air freight. The industry has also made strides in digitization while online freight exchanges offer shippers unprecedented transparency into rates.Warehousing: Rents nationwide continued to increase, albeit at a slower rate than in the past six years. With stable rent increases, warehouse developers are adding to supply, although not yet robustly enough to meet skyrocketing demand.3PLs: Increasingly strategic role. Third-party logistics providers offer increasingly essential benefits: management of speed, costs, and transparency in value-added warehousing and last-mile deliveries. But to provide those benefits, 3PLs must differentiate themselves with technology.Freight forwarders: Customer service crucial. Freight forwarders' focus on customer services and needs will be pivotal to their endurance and continued profitability.5G: Setting the standard for logistics of the future. In the near term (0 to 3 years), 5G will reduce the cost of operations and increase visibility for all stakeholders across the supply chain.
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