A “Perfect Storm” for Logistics Brewing

U.S. business logistics costs climbed over 10% last year to $1.2 trillion on higher post-recession freight volume, fuel surcharges and some rate hikes, according to the Council of Supply Chain Management Professionals (CSCMP) annual state of logistics report.

The trucking sector, which moves more than 70% of freight, has lost over 16% of capacity since 2006 as companies downsized or went bankrupt during the recession.

New regulations that closely track and publish safety records, and a proposed reduction in driving hours, will intensify capacity constraints.

Mergers and acquisitions in the trucking sector are increasing since it is the easy way to expand fleets, the study said.

Once the economy regains steam, shippers face a “perfect storm” of a trucker shortage to handle rising freight volume, and should now strengthen relationships with carriers.

Like it or not, carriers are expected to have the luxury of being selective in what freight they haul.

Rosalyn Wilson, senior business analyst and engineering consultant at Delcan Corp., believes the storm is more likely to hit around the turn of the year, rather than starting in the third quarter. ◆