What is the state of retail logistics in 2014?
The Council of Supply Chain Management Professionals’ 25th Annual State of Logistics Report, released this week in Washington, DC, has good news for retailers and suppliers alike. Freight shipments are up and expected to continue rising. And while logistics costs have increased over the last year, they rose only marginally.
The State of Logistics Report showcases key logistics trends and costs for 2013, including both total and sector level detail. This year the report predicts 2014 will be the best since the start of the Great Recession.
It’s not all good news however. There are several issues facing retailers and suppliers, including increased warehousing costs, driver shortages, capacity in some sectors and fulfillment, which came to light following the challenge Amazon had in getting product to customers during the 2013 holiday season.
"In retail, the challenge continues to be around supply chain service levels and related risks," said Rick Jackson, Executive Vice President at retailer Limited Brands.
Marc Althen, President, Penske Logistics, added that retailers also face falling productivity due to a variety of reasons, particularly in the grocery industry. For the past two years, costs as a percentage of GDP — a key gauge of the supply chain’s efficiency in moving U.S. output — was stuck at 8.5 percent. Some of the year-over-year decline in 2013 can be attributed to a 1.9 percent drop in "shipper-related costs" as companies increased their supply chain productivity, the report said.
What do you see as the biggest logistics challenges facing retailers at the present time? Where do you see the greatest opportunities for improvement?