U.S. business logistics costs, as calculated in CSCMP’s 2019 State of Logistics Report, sponsored by Penske and authored by A.T. Kearney, rose 11.4% in 2018 to reach $1.64 trillion, or 8% of the $20.5 trillion GDP.
All subsegments rose to their highest level since 2014, with private and dedicated fleets leading the way, up by 13%. Truckload was up 8.3%, LTL up 7.6%. Parcel was up over 7%, reflecting strong e-commerce growth and pricing power from providers. In addition, a buildup in inventory in the second half of the year drove inventory costs up 14.8%.
As e-commerce sales hit $513 billion, nearly 10% of total retail, in 2018, parcel expenditures rose 8.7% to $105 billion. Amazon is training customers to expect ever-faster deliveries, forcing competitors to chase those expectations, while at the same time growing its own transportation network and entering the third-party logistics business. This is sparking a furious pace of last-mile innovation, partnerships, and new technology.
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