Report finds healing supply chain has been expensive
Summary
Consequently, shippers are having to adopt multiple transportation modes and advanced order fulfillment measures to flow products to stores and consumer homes efficiently — a capability that many companies still lack. Most carriers spent the two years prior to 2022 basking in record profits, but over the course of the last 18 months that dynamic has rebalanced – and from motor fleets perspective, over-corrected and swinging back sharply in shippers’ favor. Balika Sonthalia, senior partner at Kearney and co-author of the 2023 State of Logistics Report, said much of what happened to the supply chain last year and into this year "has been all about getting back in synch," noting that although the market has swung back in shippers favor — to the detriment of carriers — "we cannot emphasize enough the importance for all industry participants to begin planning for geopolitical tensions, cybersecurity threats, climate change and related natural disasters, slowing e-commerce growth, and global recessionary factors." After skyrocketing during the pandemic, the number of new motor carriers had fallen back to pre-pandemic levels by December 2022, indicating, Sonthalia said, that a once prosperous freight cycle for truckers has ended. Indeed, Kearney GBPC’s managing director Erik Peterson notes that amid declining inflation and potential signs of easing on monetary policy tightening, the U.S. economy could plausibly avoid recession altogether.