2023 Annual State of Logistics Report
June 21, 2023
This years State of Logistics Report reveals an increase in costs spent & technology investments within U.S business logistics companies.
Insights from the 2023 State of Logistics Report
Yesterday, the 34th Annual 2023 State of Logistics Report was presented at the Indianapolis Motor Speedway. This report, produced annually by Kearney for the Council of Supply Chain Management Professionals (CSCMP), sheds light on how U.S. supply chains have evolved in response to recent global volatility. It offers critical insights into the logistics sector’s role in supply chains and provides a detailed view of the U.S. economy.
The 2023 State of Logistics Report gathers valuable global logistics data and analyzes key trends. It highlights how supply chains are adapting across various sectors. While the 2022 report focused on the need for realignment, this year’s edition emphasizes building long-term resilience. The goal is to enhance logistics operations to better serve customers through diverse and efficient distribution channels.
Key Takeaways from the 2023 State of Logistics Report
- Rising U.S. Business Logistics Costs
U.S. business logistics costs have increased, proving that the industries healing has been costly. U.S. Business Logistics Costs (USBLC) reaching a record $2.3 trillion, accounting for 9.1% of the national GDP—the highest percentage ever recorded. - E-Commerce Continues to Grow
As our world is becoming more and more digitalized, e-commerce sales continue to grow. The U.S. e-commerce market expanded by 8% in 2022, reaching $1.03 trillion, and now represents 14.5% of the entire U.S. retail market. - 3PLs Outpace Shippers in Tech Investments
Third-party logistics providers (3PLs) are investing more in technology compared to shippers. The Logistics industry is fragmented, meaning that competition is high. 3PLs must continue to adapt in using the newest software available to offer their customers competitive services, and that’s exactly what they’ve done. The report reveals that 96% of 3PLs have transitioned to the cloud, while 80% of them are investing in the Internet of Things (IoT). In contrast, 86% of shippers have adopted cloud technology, and 77% are investing in IoT. - Reshoring Movement Gains Traction
The reshoring movement continues, with an increasing number of businesses shifting their manufacturing operations back to the United States. The Kearney Reshoring Index shows a 26% growth in American imports of Mexican manufactured goods since spring 2020.
Strategic Capacity Building for the Future
Balika Sonthalia, Senior Partner at Kearney, co-authored the 2023 State of Logistics Report. She stressed the need for strategic capacity building in the logistics sector. Sonthalia urged industry participants to plan for challenges such as geopolitical tensions, cybersecurity threats, climate change, and natural disasters. Additionally, she highlighted the potential impact of slowing e-commerce growth and global recessionary factors. Despite the current market favoring shippers, proactive planning remains crucial for long-term success.