Gilmore Says.... |
 |
|
The US thus spent about $131 billion more in parcel shipping than it did in rail transport last year - a bit more than a delta of $127.4 billion in 2023.
 |
What do you say? |
|
| Click here to send us your comments |
| |
|
|
|
Four Kearney consultants - Michael Zimmerman, Korhan Acar, Balika Sonthalia and Andres Mendoza Pena - are cited as the report's authors, with shout outs to dozens of other people and organizations that helped with data or advice.
Again this year, Penske Logistics funded the report development.
This is actually the 36th edition of the State of Logistics report, which was launched in 1988 by the late Bob Delaney and sponsored by his company, Cass Information Systems. Somewhere along the way, CSCMP took over the sponsorship.
The headline news (sort of): what the report several years back started calling US Business Logistics Costs (USBLC) rose on an absolute basis in 2024 to $2.58 trillion, up from $2.44 trillion in 2023, for an increase of 5.4%.
Since the report’s inception, total USBLC is then divided by nominal US GDP to calculate logistics costs as a percent of GDP, which can be used for comparisons across years.
I say “sort of” because again this year, for reasons unclear, the report only mentions the rise in USBLS briefly many pages in, providing the number as a percent of GDP only in a table in the Appendix. I use that data to provide a chart on the change in the measure over the past decade, which the report itself provided for many years:
Underneath the overall logistics cost number, transportation costs - the largest single component of USBLC at 64.4% of the total (versus 64.1% in 2023) – were about flat, versus an average of 8.7% annually over the past five years.
The second component of USBLC, inventory carrying costs (28.4% of the total, versus 28.6% in 2023), were barely up from 2023 last year under the report's calculation, which includes the cost of warehousing and inventory levels but also the cost of capital (which drives the cost of holding inventory).
Interest rates were flat last year versus 2023.
"Other" costs - always somewhat vague, and mostly involving certain IT expenses and some services such as freight forwarding, were up 2.8%, though this bucket is by far the smallest of the three main categories at just 7.0% of the total cost logistics number (versus 7.2% in 2023).
You can find the full breakdown by logistics cost bucket in the chart below:
Source: CSCMP/Kearney
Within transportation, trucking-related spend (including private fleets but excluding parcel) comprised 59.7% of total transport costs and 38.5% of total logistics spend, down from 40.9% in 2023.
Parcel shipping costs were estimated at $229.7 billion, barely up from $224.9 in 2023, as ecommerce growth was tepid, and we would assume from this number B2B parcel volumes as well. Parcel represented 13.8% of total transport costs and 8.9% of total logistics spend, about flat with 2023’s 14.3%. Over the past five years, parcel costs have risen by 10.6% on average, even with the slow 2023 and 2024.
At $97.3 billion in 2024, rail comprised just 5.8% of transportation spend – down from 6.1% in 2023. Rail was also 3.7% of the total logistics costs, compared to 3.9% in 2023.
The US thus spent about $131 billion more in parcel shipping than it did in rail transport last year - a bit more than a delta of $127.4 billion in 2023.
In terms of growth in spending by these various categories, the 5-year average annual growth rate in costs by mode or cost category are as follows, according to the report:
• Truckload: 4.4%
• LTL: -2.4%
• Private/dedicated fleet: 12.3%
• Trucking combined: 7.6%
• Parcel: 10.6%
• Rail: 3.1%
• Air freight: 2.6%
• Waterways: 34.7%
• Warehousing: 4.6%
With overall transport costs rising 8.7% per year over the past five years, comparing the rise in any specific areas versus that overall number will indicate whether a mode gaining or losing share of total spend (note: that is not the same as tonnage share changes, though I suspect the numbers would be similar).
I think I will leave it here for a part 2.
CSCMP members can download a copy for no charge, and others can purchase one for a modest fee. I recommend it.
Any reaction to our summary of this year's State of Logistics? How could the report be improved? Let us know your thoughts at the Feedback section below.
Your Comments/Feedback
|
