CSCMP’s 2023 Distinguished Service Award winner Ted Stank has made a name for himself through forming strong partnerships between academia and practitioners.
This year’s CSCMP 2023 Distinguished Service Award[remove all caps and bold] (DSA) winner, Dr. Ted Stank, is highly revered by his colleagues, particularly for his ability to move with ease between academic and practitioner circles. Stank is constantly listening to the ideas and concerns of both communities—and using that information to direct his research at the University of Tennessee-Knoxville (UTK). In fact, many of his colleagues refer to him as a “practical academic.”
Under Dr. Stank’s guidance, the University of Tennessee has become one of the premier supply chain programs in the world at both the undergraduate and post graduate levels. He’s responsible for setting the priorities, tone, and culture for UTK’s program.
Stank currently serves as the Harry and Vivienne Bruce Chair of Excellence in Business and Professor of Supply Chain Management, co-faculty director of the Global Supply Chain Institute, Haslam Family Faculty Research Fellow, and founder and faculty director of the Advanced Supply Chain Collaborative at the University of Tennessee-Knoxville.
Under his leadership, the university’s Global Supply Chain Institute has become a hub for supply chain thought leadership and talent development, with involvement from companies like Amazon, Boeing, Procter & Gamble, and Walmart. The Advanced Supply Chain Collaborative has enabled these and other corporate giants, such as IBM and Pfizer, to leverage academic knowledge and advanced innovations to improve lives around the world.
Recently, he spoke with CSCMP’s Supply Chain Quarterly Managing Editor Diane Rand about his work.
NAME: Theodore (Ted) Stank
TITLE: Harry and Vivienne Bruce Chair of Excellence in Business and Professor of Supply Chain Management; Co-Executive Director of the Global Supply Chain Institute; Haslam Family Faculty Research Fellow; and Founder and Faculty Director of the Advanced Supply Chain Collaborative at the University of Tennessee-Knoxville
OTHER EXPERIENCE: Operations officer in the United States Navy; sales and marketing experience for Abbott Laboratories Diagnostic Division; consulted for numerous organizations, including Anheuser-Busch InBev, Dell, IBM, Lowe’s, Norfolk Southern, OfficeMax, Pepsi, Siemens, Sony, Textron, Walgreens, Walmart, Whirlpool, and the U.S. Air Force and Marine Corps.; educational advisor to the Health and Personal Care Logistics Conference; associate editor for the Journal of Business Logistics; and serves on the editorial review boards of Journal of Operations Management and International Journal of Physical Distribution and Logistics Management.
CSCMP EXPERIENCE: served as president of the old Paso del Norte Roundtable; session chair and track chair of the EDGE annual conference; led special task forces for the board; and served as board officer and the chairman of the board of directors
AWARDS: 2023 CSCMP Distinguished Service Award; member of CSCMP’s Supply Chain Hall of Fame
EDUCATION: doctorate in marketing and distribution from the University of Georgia; master’s in business administration from Webster University; and a bachelor’s degree from the United States Naval Academy
You started your career in the Navy and then moved into industry. Why did you eventually decide to go into academia?
After leaving the Navy, mainly due to a desire for better work/family balance, I became a sales rep for Abbott Labs Diagnostic Division (ADD). During the time I was with ADD, the marketing organization created a strategy of competing not just on our product lines but on the distribution intensity we had that enabled us to deliver to our customers. … I was not cut out for sales—not thick-skinned enough—and began searching for something else. A great Navy friend of mine (Bill Simon, who went on to become CEO of Walmart North America) sent me a Wall Street Journal article outlining the opportunities that were opening for business professors. We both decided to quit our jobs and get our PhDs together (he was working as a third shift plant manager for RJR at the time) and become business professors. I did, and he didn’t. He now owns racehorses, and I am still working.
But I don’t regret my career; it has been great professionally and also allowed me to coach my kids in sports up through high school, play in a rock and roll band, and do a lot of other things I could not have done without the work flexibility that an academic career afforded me. Interestingly, that flexibility is what millennials and Gen Zers are seeking with their work/life integration today, and good for them.
Your academic career has been very focused on developing strong partnerships with industry and focusing on research that produces industry best practices. Why is that so important to you?
I have been influenced by some giants in our field, starting with my dissertation chair, Dr. Patricia Daugherty, and continuing with Dr. Don Bowersox and Dr. Tom Mentzer. All believed that business professors needed to be closely aligned with our industry practitioners. We are not medieval language professors, but professors of a practice, just like in medicine, nursing, law, and engineering.
One of my huge “ah-ha” moments was hearing Dr. Bud La Londe during a presentation to a group of academics when a finance professor challenged him about how much time he spent working with industry. Bud’s response was that no one would challenge a physics professor about spending time in their lab, why would you challenge a business professor from spending time in our lab (that is, the business world)?
Don, Pat, and Tom all enforced the notion that our research must be theoretically and methodologically sound and rigorous, but also practically relevant. It pains me that our academic model has moved increasingly away from that model, and I have spent the latter part of my career trying to bring us back. I am extremely proud that our program at the University of Tennessee (UT), more than any other program in my opinion other than MIT, embodies that notion of rigor and relevance. I think it has proven out in the success of our programs and the recognition we have in rankings, etc.
The results from the research I participate in today as part of our Advanced Supply Chain Collaborative at UT have been implemented by the companies we work with and published in top supply chain management (SCM) academic journals. Three of my close colleagues, Dr. Tom Goldsby, Dr. Lance Saunders, and my last doctoral student, Dr. Anne Dohmen, now on faculty at Michigan State University, embody this notion and I could not be prouder of them. They will be continuing to push this philosophy long after I am gone.
What advice do you give academics on how to best form partnerships with practitioners?
What works is getting out to where practitioners are—conferences, their workplaces, etc.—and getting to know their struggles and challenges. And to get to know them as people, because academic-industry partnerships are all about relationships. Sharing a dinner or drink with our colleagues in industry goes light years toward building trust in each other that results in working relationships. By the way, those relationships start when you have talented students in class. If you do a good job there and show them that you are interested in helping them succeed, and then keep up with some of them afterwards, they will open doors for you in the future.
What does not work is cold-calling industry folks and asking them to give you data when they know nothing about you and have no trust. So, like so many things in business and personal life, it’s all about the relationships. CSCMP, by the way, can be impactful in helping establish those relationships, first at the local roundtable level and also at the annual conference. Many great academic-practitioner relationships start at dinner at the local roundtable meetings.
When we started the Advanced Supply Chain Collaborative to do joint academic-industry research, I told the 12 CSCOs who took the risk to participate with us that first year that I staked my reputation and relationship with them on this idea creating value. Those folks put their trust, time, and money on us, and they would not have if they did not have a close relationship with me in advance. I learned that from Don Bowersox.
Do you see any ways that CSCMP could help better foster collaboration between industry and academia?
My passion for CSCMP is that it remains the only professional organization in business that brings academics and industry practitioners together, and always has. … Other business disciplines, including our colleagues in operations management, marketing, finance, accounting, and management, all have professional organizations whose academics and practitioners meet separately at different times and in different places and never speak to each other. I consider that a shame and a travesty of what business scholarship is meant to be.
CSCMP could provide a key role in bringing like-minded academics and practitioners to the table to engage in collaborative research. Academics have the research skills and bandwidth to take on some of the challenging issues that all SCM leaders are confronted with. Dick Powell, a Council of Logistics Management (CLM) chair back in the late ‘90’s, once said that the role of academia is to separate truth from hype. I heard him present that at an annual global conference, and I internalized that message.
A lot of your work at the University of Tennessee has focused on integrated supply chain management. What gains have you seen over the years, and where is progress still needed?
As I work with our various industry partners, I have been encouraged to find that most of them are somewhere on the journey to integrated supply chains. This is a big difference from 10 years ago. Three things have helped make considerable changes in the last 10 years:
Organizing the supply chain functions under a chief supply chain officer (CSCO) has put all the internal functions in a hierarchy that encourages integration. In many of these integrated supply chain organizations, a big part of the organization is the creation of overarching metrics that have incented behaviors that lend to integrated decision-making.
Implementation of effective integrated business planning/sales and operations planning/demand-supply integration—whichever you choose to call it—has also contributed greatly to this end-to-end perspective in decision-making.
Technology—including cloud technology, advanced planning packages, analytics, and visibility tools and information control towers—across the supply chain have helped us gain a much better view of what is going on not only within the organization but also up and down the extended supply chain.
Progress still needs to be made in all three of these areas, although the lessons we learned during the COVID pandemic have accelerated progress—for now. It is easy for companies to backslide into old behaviors, and my CSCO friends tell me that is indeed happening. Old habits die hard, and keeping the attention of senior business leaders is a hard thing to do as they shift to the latest shiny object in their view.
How have the skills that companies have been looking for from your graduates changed since you started in academia?
The biggest change has been that companies are looking for students who have a broad end-to-end knowledge of supply chain functions but also enough depth to succeed in their first job, which will be in one of those functions. That’s a tough challenge as the content of SCM broadens constantly. The other big thing is a consistent demand for analytics skills, the more the better. Our biggest combination is an SCM major with a business analytics minor—and vice versa for analysts going to work in SCM.
What continues to keep you engaged in supply chain management?
Wow, it just changes constantly. We have just come through a period of time with COVID that has shaken our notions of business, and global business in particular, to the core, and we are still in reaction mode to what that did to us. Combine that with geopolitical upheaval, both abroad and here in the U.S., and things look very different than they did just five years ago. The assumptions we made during the first 30 years of my career have been challenged, and we are trying to figure out what comes next. If that doesn’t pique your interest, then nothing will.
A lot of my current research relates to those big trends—what do new global networks look like? How do we focus more on true agility in our supply chains instead of paying it lip service? Can we make supply chain risk management a core capability instead of also just paying it lip service? How can we dramatically change how we do things to take advantage of the information we have at our fingertips, particularly in planning, but also across all supply chain functions? How can we as supply chain leaders make the biggest impact on sustainability?
I won’t be around to figure all this out, but our teams at UT are working on all of these issues and will really be making a mark on knowledge and practice in the years to come.
What has been one of your proudest professional achievements?
Other than winning the CSCMP Distinguished Service Award and being accepted into the Supply Chain Hall of Fame? My proudest achievements are following my students as they move on to their careers and hearing from them how they applied what they learned from me and made a difference in their organizations. I have a file of the emails I get from them, and at the end of the day, the most meaningful thing for me is having a positive impact on the people with whom I work—from my colleagues to the companies I work with—and to all of my students from undergrads to executives.
I hear a lot from my top-performing students, but here is one of my favorite messages from a former student: “Even though I wasn't the most serious student, and earned a 2.5, what I learned helped me to get a job. I had an interview today with the operations manager, production manager, and the engineering guy, and I was able to answer their questions pretty well. I have to say, a lot of that was because of stuff I learned from your class.”
The practice consists of 5,000 professionals from Accenture and from Avanade—the consulting firm’s joint venture with Microsoft. They will be supported by Microsoft product specialists who will work closely with the Accenture Center for Advanced AI. Together, that group will collaborate on AI and Copilot agent templates, extensions, plugins, and connectors to help organizations leverage their data and gen AI to reduce costs, improve efficiencies and drive growth, they said on Thursday.
Accenture and Avanade say they have already developed some AI tools for these applications. For example, a supplier discovery and risk agent can deliver real-time market insights, agile supply chain responses, and better vendor selection, which could result in up to 15% cost savings. And a procure-to-pay agent could improve efficiency by up to 40% and enhance vendor relations and satisfaction by addressing urgent payment requirements and avoiding disruptions of key services
Likewise, they have also built solutions for clients using Microsoft 365 Copilot technology. For example, they have created Copilots for a variety of industries and functions including finance, manufacturing, supply chain, retail, and consumer goods and healthcare.
Another part of the new practice will be educating clients how to use the technology, using an “Azure Generative AI Engineer Nanodegree program” to teach users how to design, build, and operationalize AI-driven applications on Azure, Microsoft’s cloud computing platform. The online classes will teach learners how to use AI models to solve real-world problems through automation, data insights, and generative AI solutions, the firms said.
“We are pleased to deepen our collaboration with Accenture to help our mutual customers develop AI-first business processes responsibly and securely, while helping them drive market differentiation,” Judson Althoff, executive vice president and chief commercial officer at Microsoft, said in a release. “By bringing together Copilots and human ambition, paired with the autonomous capabilities of an agent, we can accelerate AI transformation for organizations across industries and help them realize successful business outcomes through pragmatic innovation.”
Even as the e-commerce sector overall continues expanding toward a forecasted 41% of all retail sales by 2027, many small to medium e-commerce companies are struggling to find the investment funding they need to increase sales, according to a sector survey from online capital platform Stenn.
Global geopolitical instability and increasing inflation are causing e-commerce firms to face a liquidity crisis, which means companies may not be able to access the funds they need to grow, Stenn’s survey of 500 senior e-commerce leaders found. The research was conducted by Opinion Matters between August 29 and September 5.
Survey findings include:
61.8% of leaders who sought growth capital did so to invest in advanced technologies, such as AI and machine learning, to improve their businesses.
When asked which resources they wished they had more access to, 63.8% of respondents pointed to growth capital.
Women indicated a stronger need for business operations training (51.2%) and financial planning resources (48.8%) compared to men (30.8% and 15.4%).
40% of business owners are seeking external financial advice and mentorship at least once a week to help with business decisions.
Almost half (49.6%) of respondents are proactively forecasting their business activity 6-18 months ahead.
“As e-commerce continues to grow rapidly, driven by increasing online consumer demand and technological innovation, it’s important to remember that capital constraints and access to growth financing remain persistent hurdles for many e-commerce business leaders especially at small and medium-sized businesses,” Noel Hillman, Chief Commercial Officer at Stenn, said in a release. “In this competitive landscape, ensuring liquidity and optimizing supply chain processes are critical to sustaining growth and scaling operations.”
With six keynote and more than 100 educational sessions, CSCMP EDGE 2024 offered a wealth of content. Here are highlights from just some of the presentations.
A great American story
Author and entrepreneur Fawn Weaver closed out the first day of the conference by telling the little-known story of Nathan “Nearest” Green, who was born into slavery, freed after the Civil War, and went on to become the first master distiller for the Jack Daniel’s Whiskey brand. Through extensive research and interviews with descendants of the Daniel and Green families, Weaver discovered what she describes as a positive American story.
She told the story in her best-selling book, Love & Whiskey: The Remarkable True Story of Jack Daniel, His Master Distiller Nearest Green, and the Improbable Rise of Uncle Nearest. That story also inspired her to create Uncle Nearest Premium Whiskey.
Weaver discussed the barriers she encountered in bringing the brand to life, her vision for where it’s headed, and her take on the supply chain—which she views as both a necessary cost of doing business and an opportunity.
“[It’s] an opportunity if you can move quickly,” she said, pointing to a recent project in which the company was able to fast-track a new Uncle Nearest product thanks to close collaboration with its supply chain partners.
A two-pronged business transformation
We may be living in a world full of technology, but strategy and focus remain the top priorities when it comes to managing a business and its supply chains. So says Roberto Isaias, executive vice president and chief supply chain officer for toy manufacturing and entertainment company Mattel.
Isaias emphasized the point during his keynote on day two of EDGE 2024. He described how Mattel transformed itself amid surging demand for Barbie-branded items following the success of the Barbie movie.
That transformation, according to Isaias, came on two fronts: commercially and logistically. Today, Mattel is steadily moving beyond the toy aisle with two films and 13 TV series in production as well as 14 films and 35 shows in development. And as for those supply chain gains? The company has saved millions, increased productivity, and improved profit margins—even amid cost increases and inflation.
A framework for chasing excellence
Most of the time when CEOs present at an industry conference, they like to talk about their companies’ success stories. Not J.B. Hunt’s Shelley Simpson. Speaking at EDGE, the trucking company’s president and CEO led with a story about a time that the company lost a major customer.
According to Simpson, the company had a customer of their dedicated contract business in 2001 that was consistently making late shipments with no lead time. “We were working like crazy to try to satisfy them, and lost their business,” Simpson said.
When the team at J.B. Hunt later met with the customer’s chief supply chain officer and related all they had been doing, the customer responded, “You never shared everything you were doing for us.”
Out of that experience, came J.B. Hunt’s Customer Value Delivery framework. The framework consists of five steps: 1) understand customer needs, 2) deliver expectations, 3) measure results, 4) communicate performance, and 5) anticipate new value.
Next year’s CSCMP EDGE conference on October 5–8 in National Harbor, Md., promises to have a similarly deep lineup of keynote presentations. Register early at www.cscmpedge.org.
2024 was expected to be a bounce-back year for the logistics industry. We had the pandemic in the rearview mirror, and the economy was proving to be more resilient than expected, defying those prognosticators who believed a recession was imminent.
While most of the economy managed to stabilize in 2024, the logistics industry continued to see disruption and changes in international trade. World events conspired to drive much of the narrative surrounding the flow of goods worldwide. Additionally, a diminished reliance on China as a source for goods reduced some of the international trade flow from that manufacturing hub. Some of this trade diverted to other Asian nations, while nearshoring efforts brought some production back to North America, particularly Mexico.
Meanwhile trucking in the United States continued its 2-year recession, highlighted by weaker demand and excess capacity. Both contributed to a slow year, especially for truckload carriers that comprise about 90% of over-the-road shipments.
Labor issues were also front and center in 2024, as ports and rail companies dealt with threats of strikes, which resulted in new contracts and increased costs. Labor—and often a lack of it—continues to be an ongoing concern in the logistics industry.
In this annual issue, we bring a year-end perspective to these topics and more. Our issue is designed to complement CSCMP’s 35th Annual State of Logistics Report, which was released in June, and includes updates that were presented at the CSCMP EDGE conference held in October. In addition to this overview of the market, we have engaged top industry experts to dig into the status of key logistics sectors.
Hopefully as we move into 2025, logistics markets will build on an improving economy and strong consumer demand, while stabilizing those parts of the industry that could use some adrenaline, such as trucking. By this time next year, we hope to see a full recovery as the market fulfills its promise to deliver the needs of our very connected world.
If you feel like your supply chain has been continuously buffeted by external forces over the last few years and that you are constantly having to adjust your operations to tact through the winds of change, you are not alone.
The Council of Supply Chain Management Professionals’ (CSCMP’s) “35th Annual State of Logistics Report” and the subsequent follow-up presentation at the CSCMP EDGE Annual Conference depict a logistics industry facing intense external stresses, such as geopolitical conflict, severe weather events and climate change, labor action, and inflation. The past 18 months have seen all these factors have an impact on demand for transportation and logistics services as well as capacity, freight rates, and overall costs.
The “State of Logistics Report” is an annual study compiled and authored by a team of analysts from Kearney for CSCMP and supported and sponsored by logistics service provider Penske Logistics. The purpose of the report is to provide a snapshot of the logistics industry by assessing macroeconomic conditions and providing a detailed look at its major subsectors.
One of the key metrics the report has tracked every year since its inception in 1988 is U.S. business logistics costs (USBLC). This year’s report found that U.S. business logistics costs went down in 2023 for the first time since the start of the pandemic. As Figure 1 shows, U.S. business logistics costs for 2023 dropped 11.2% year-over-year to $2.4 trillion, or 8.7% of last year’s $27.4 trillion gross domestic product (GDP).
“This was not unexpected,” said Josh Brogan, Kearney partner and lead author of the report, during a press conference in June announcing the results. “After the initial impacts of COVID were felt in 2020, we saw a steady rise of logistics costs, even in terms of total GDP. What we are seeing now is a reversion more toward the mean.”
This breakdown of U.S. Business Logistics Costs for 2023 shows an across-the-board decline in all transportation costs.
CSCMP's 35th Annual "State of Logistics Report"
As a result, Figure 1 shows an across-the-board decline in transportation costs (except for some administrative costs) for the 2023 calendar year. “What such a chart cannot fully capture about this period is the intensification of certain external stressors on the global economy and its logistical networks,” says the report. “These include a growing geopolitical instability that further complicates investment and policy decisions for business leaders and government officials.”Both the report and the follow-up session at the CSCMP EDGE Conference in October provided a vivid picture of the global instability that logistics providers and shippers are facing. These conditions include (but are not limited to):
An intensification of military conflict, with the Red Sea Crisis being particularly top of mind for companies shipping from Asia to Europe or to the eastern part of North America;
Continued fragmentation of global trade, as evidenced by the deepening rift between China and the United States;
Climate change and severe weather events, such as the drought in Panama, which lowered water levels in the Panama Canal, and the two massive hurricanes that ripped through the Southeastern United States;
Labor disputes, such as the three-day port strike which stopped operations at ports along the East and Gulf Coasts of the United States in October; and
Persistent inflation (despite some recent improvement in the United States) and muted global economic growth.
At the same time that the logistics market was dealing with these external factors, it was also facing sluggish freight demand and an ongoing excess of capacity. These twin dynamics have contributed to continued low cargo rates through 2024.
“For 2024, I foresee a generally flat USBLC as a percentage of GDP,” says Brogan. “We did see increases in air and ocean costs in preparation for the East Coast port strike but overall, road freight is down. I think this will balance out with the relatively low level of inflation seen in the general economy.”
Breakdown by mode
The following is a quick review of how the forces outlined above are affecting the primary logistics sectors, as described by the “State of Logistics Report” and the updated presentation given at the CSCMP EDGE Conference in early October.
Trucking: A downturn in consumer demand plus a lingering surplus in capacity led to a plunge in rates in 2023 compared to 2022. Throughout 2024, however, rates have remained relatively stable. Speaking in October, report author Brogan said he expects that trend to continue for the near future. On the capacity side, despite thousands of companies having departed the market since 2022, the number of departures has not been as high as would normally be expected during a down market. Brogan accounts this to investors expecting to see some turbulence in the marketplace and being willing to stick around longer than has traditionally been the case.
Parcel and last mile: Parcel volumes in 2023 were down by 0.5% compared to 2022. Simultaneously, there has been a move away from UPS and FedEx, both of which saw their year-over-year parcel volumes decline in 2023. Nontraditional competitors have taken larger portions of the parcel volume, including Amazon, which passed UPS for the largest parcel carrier in the U.S. in 2023. Additionally, there has been an increasing use of regional providers, as large shippers continue to shift away from “single sourcing” their carrier base. Parcel volumes have increased in 2024, mostly driven by e-commerce. Brogan expects regional providers to claim “the lion’s share” of this volume.
Rail: In 2023, Class I railroads experienced a challenging financial environment, characterized by a 4% increase in operating ratios, a 2% decline in revenue, and an 11% decrease in operating income compared to 2022. These financial troubles were primarily driven by intermodal volume decreases, service challenges, inflationary pressures, escalated fuel and labor expenses, and a surge in employee headcount. The outlook for 2024 is slightly more promising, according to Kearney. Intermodal, often regarded a primary growth driver, has seen increased volumes and market share. Class I railroads are also seeing some positive operational developments with train speeds increasing by 2.3% and terminal dwell times decreasing by 1.8%. Finally, opportunities are opening up for an expansion in cross-border rail traffic within North America.
Air: The air freight market saw a steep decline in costs year over year from 2022 to 2023. Rates in 2024 began flat before starting to pick up in the summer, and report authors expect to see demand increase by 4.5%. Part of the demand pickup is due to disruptions in key sea lanes, such as the Suez Canal, causing shippers to convert from ocean to air. Meanwhile, the capacity picture has been mixed with some lanes having a lot of capacity while others have none. Much of this dynamic is due to Chinese e-commerce retailers Temu and Shein, which depend heavily on airfreight to execute their business models. In order to serve this booming business, some airfreight providers have pulled capacity out of more niche markets, such as flights into Latin America or Africa, and are now using those planes to serve the Asia-to-U.S. or Asia-to-Europe lanes.
Water/ports: The recent “State of Logistics Report” indicated that waterborne freight experienced a very steep decline of 64.2% in expenditures in 2023 relative to 2022. This was mostly due to muted demand, overcapacity, and a normalization from the inflated ocean rates seen during the pandemic years. After the trough of 2023, the market has been seeing significant “micro-spikes” in rates on some lanes due to constraints caused by geopolitical issues, such as the Red Sea conflict and the U.S. East and Gulf Coast ports strike. Kearney foresees a continuation of these rate hikes for the next few months. However, over the long term, the market will have to deal with the overcapacity that was built up during the height of the pandemic, which will cause rates to soften. Ultimately, however, Brogan said he did not expect to see a return to 2023 rate levels.
Third-party logistics (3PLs): The third-party logistics (3PL) sector is facing some significant challenges in 2024. Low freight rates and excess capacity could force some 3PLs to consolidate, especially if they are smaller players and rely on venture capital funding. Meanwhile, Kearney reports that there is some redefining of traditional roles going on within the 3PL-shipper ecosystem. For example, some historically asset-light 3PLs are expanding into asset-heavy services, and some shippers are trying to monetize their own logistics capabilities by marketing them externally.
Freight forwarding: Major forwarders had a shaky final quarter of 2023, seeing a decline in financial performance. To regain form, Kearney asserts that forwarders will need to increase their focus on technology, value-added services, and tiered servicing. Overall, the forwarding sector is expected to grow at slow rate in coming years, with a projected annual growth rate of 5.5% for the period of 2023–2032.
Warehousing: According to Brogan an interesting phenomenon is occurring in the warehousing market with the average asking rents continuing to rise even though vacancy rates have also increased. There are several reasons for this mixed message, according to the “State of Logistics” report, including: longer contract durations, enhanced facility features, and steady demand growth. A record-breaking level of new construction and new facilities, however, have helped to stabilize rent prices and increase vacancy rates, according to the report authors.
Path forward
What is the way forward given these uncertain times? For many shippers and carriers, a fresh look at their networks and overall supply chains may be in order. Many companies are currently reassessing their distribution networks and operations to make sure that they are optimized. In these cost-sensitive times, that may involve consolidating facilities, eliminating redundant capacity, or rebalancing inventory.
It’s important to realize, however, that network optimization should not just focus on eliminating unnecessary costs. It should also ensure that the network has the right amount of capacity to response with agility and flexibility to any future disruptions. Companies must look at their supply chain networks as a whole and think about how they can be utilized to unlock strategic advantage.