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31st Annual State of Logistics: Resilience put to the test

As we roll through 2020, logistics managers are fending off COVID-19 worries and adapting to the new realities. However, a new report warns against single-sourced supply chains...

According to the 31st Annual Council of Supply Chain Management Professionals (CSCMP) State of Logistics Report, logisticians received high marks and mostly praise for their responses to the economic trauma caused by the worldwide COVID-19 pandemic. However, they’re now going to have to step up their game to adjust to changing realities on the ground, sea and in the air.

According to the report, logisticians and other transportation experts were “initially traumatized,” but ultimately “proved resilient” as they adapted to the COVID-19 pandemic and ensuing economic upheaval.

The annual report, released on June 22 and authored by Kearney in partnership with CSCMP and Penske Logistics, is predicting that the “shocked U.S. economy will shrink this year, but the adapting is already under way as logistics professionals adjust to new realities of transport planning and execution.”

Despite the sudden economic shock that began in March and continued through the second quarter, the report says that the U.S. economy is bouncing back somewhat strongly and e-commerce “continues to boom”—a huge benefit to the large parcel giants and some nimble trucking companies.

And somewhat surprisingly, the report concluded, trucking companies often prone to deep discounting during any economic downturn, have stuck to their newfound pricing discipline while largely avoiding rate wars of the past. “Some carriers maintained profits despite declining volume in 2019, suggesting a commitment to pricing discipline that may help them survive the bigger drops of 2020,” the report states.

There’s also a newfound unevenness to the economy, including logistics. “Some carriers may face bankruptcy; some shippers may face higher prices; others may welcome abundance,” the report predicts. “To get through trying times, all parties will need to make smart investments in technology and use such technologies to deepen collaboration.”

So, let’s take a deeper dive into how logistics is faring during the pandemic-induced economic slowdown. We’ll see which sectors and modes were most affected and how various modes and shippers adapted to the largest health crisis in 100 years—and the sharpest economic downtown in our lifetimes.

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