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U.S. Business Logistics Costs Reach All-Time High

U.S. Business Logistics Costs Reach All-Time High

U.S. Business Logistics Costs Reach All-Time High

Photo: U.S. business logistics costs (USBLC) exceeded $2.316 trillion in 2022, which equated to 9.1% of the U.S.’s nominal gross domestic product (GDP) that year, the highest mark of all time according to a recent report. In the Council of Supply Chain Management Professionals’ (CSCMP) newly released 2023 State of Logistics Report, entitled “ The Great Reset ,” U.S. business logistics costs grew by 19.6% year-on-year after coming in at $1.937 trillion in 2021. Total transportation costs in the U.S. grew by 7.4% year-on-year from $1.2960 trillion in 2021 to $1.3914 trillion in 2022. Road freight and transportation made up the biggest part of logistics spending in the United States after reaching $896 billion in 2022, a 6.1% rise from 2021 ($844.5 billion). Rail costs also experienced a 17.6% YoY boost from 2021 ($84.4 billion) to 2022 ($99.2 billion). Despite consumers returning to stores to purchase goods, e-commerce sales have not slowed down, increasing by 8% YoY in 2022 to $1.034 trillion, 14.5% of the entire U.S. retail market at the time. Third-party logistics providers (3PLs) invested more money in technology, as opposed to shippers. Amongst responders, 96% of 3PLs said they have migrated their operations to the cloud. For shippers, that number came in at 86%. The study also noted that 80% of 3PLs were investing in IoT in 2022, 3% more than shippers (77%). The greatest disparity between 3PLs and shippers came in the form of data because 51.5% of third-party logistics providers said their supply chain services offered real-time data. Simultaneously, less than a third of shippers (31.5%) said that they provided real-time data in their supply chain offerings. Reshoring also continues to dominate the U.S. with American imports of Mexican manufactured goods growing by 26% since the spring of 2020 according to Kearney’s Reshoring Index , which is used to track the extent to which America is reshoring manufacturing operations back to the U.S. from low-cost countries (LCCs) and regions. “Coming off this performance, supply chain demand is likely to remain stagnant or even diminish over the remainder of 2023,” the report’s authors wrote in an executive summary. “The reasons for this are varied and are rooted in lingering uncertainties for the global and U.S. economies.” The 2023 State of Logistics Report is produced annually by the CSCMP, the global consulting firm Kearney, and presented by Penske Logistics. Data for the 2023 State of Logistics report was collected during the 2022 calendar year as well as the early months of 2023.

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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