CSCMP published its Annual State of Logistics Report yesterday. I always look forward to this report because Rosalyn Wilson, the report’s author, does a great job of summarizing the key factors impacting logistics costs in the United States. If you’re a close follower of the logistics industry, however, none of the information in the report should be surprising. The report, sponsored by Penske Logistics, is mostly a rearview look at the year that was, with about three pages dedicated to the road ahead. But having the numbers summarized and analyzed in a clear and concise way is valuable nonetheless.

Total logistics costs declined 18.2 percent in 2009, and logistics as a percent of nominal GDP dropped to 7.7 percent, the lowest level measured since the series started in 1981.Transportation costs dropped 20.2 percent and inventory carrying costs declined 14.1 percent. If you’re a CSCMP member, I recommend that you download the full report for all the details surrounding these numbers.

But what will happen in the weeks and months ahead?

This is the question that many supply chain and logistics professionals keep asking. Many believe that the recent signs of economic recovery are just a “head fake” as one executive put it at a recent conference. Is the uptick real and sustainable or just a temporary reprieve as companies rebuild depleted inventories? In short, many companies (manufacturers, retailers, transportation providers) remain cautious and conservative in their near-term plans.

When the economy will return to sustainable growth remains the big unknown; what will happen to logistics costs and capacity when the economy rebounds, however, is well understood. Transportation costs will rise and capacity will tighten, especially in trucking, due to fewer trucks available, driver shortages, increased fuel prices, and regulations such as CSA 2010. Supply chain networks will change in response to rising labor costs in China, new trade agreements, new duties and tariffs, currency concerns, sustainability initiatives, customers demanding faster lead times, and so on.

The only sure thing that will happen in the weeks and months ahead is change.

Agile, responsive, adaptive, resilient…these are the supply chain attributes required to meet the challenges of the 21st century. Plenty of books and articles have been written about how to design supply chains with these attributes. A key prerequisite, however, is having access to timely, accurate, and complete information—actually, not just information, but insights and intelligence—about trends and factors related to supply, demand, operational and financial risks, competitors, best practices, technology, regulations, and anything else with a direct or indirect impact on your business and supply chains.

Is your rearview eyesight 20/20, but your forward visibility dark and blurry?

As I noted earlier, the CSCMP Annual State of Logistics Report is a valuable resource for the logistics community, especially students and those new to the profession. But if the information contained in it is a surprise to you, then you should expect plenty of more surprises down the road, most of them unpleasant.

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