2023 State of Logistics Report Highlights

On June 20th, Kearney released its 2023 State of Logistics Report for the Council of Supply Chain Management Professionals (CSCMP). This annual snapshot of the American logistics sector details supply chain trends.

Last year’s report found that supply chains were “out of sync,” due to product scarcity and supply chain bottlenecks related to the pandemic. Inventory challenges proliferated and costs skyrocketed, due to limited warehousing availability.

But what’s the state of logistics and supply chains this year? Let’s take a look at the most recent report.

“The Great Reset”

Last year’s report focused on the supply chain disruptions and instability caused by the pandemic era of 2020-2021. But in 2023, the logistics sector is largely restabilizing.

A key report statistic is an increase in U.S. business logistics costs (USBLC), which now stands at a record $2.3 trillion, representing 9.1% of national GDP. This is a significant spike from last year’s $1.85 trillion, and remains the highest percentage of GDP ever reported.

This year’s report shows that supply chains are working to improve their resilience on the heels of the pandemic. Many logistics companies are also turning their attention to strategic capacity, according to Balika Sonthalia, senior partner at Kearney and co-author of the 2023 report.

“Although the market has swung back in shippers’ favor, to the detriment of carriers,” Sonthalia said, “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.”

Nevertheless, both shippers and carriers now have a chance to rethink their strategies in the aftermath of the pandemic, and to prepare for the possibility of future widespread disruptions. Rather than choosing cost-cutting measures, resilience is now a key virtue across the logistics sector.

However, this new focus may impact companies’ abilities to embody industry-staple values like speed, service, optionality, and savings.

Reshoring and Nearshoring Remain Important

The trends of reshoring and nearshoring, as we’ve touched on previously, remain on the rise.

Rather than relying on offshore production, reshoring is the process of returning the production and manufacturing of goods back to a company’s country of origin. Nearshoring is when companies move production or manufacturing to a nearby country (e.g., when American companies withdraw operations from China and shift them to closer nations like Mexico or Canada). 

In today’s market, reshoring is less of a consideration and more of a practical necessity for many companies. According to the Kearney Reshoring Index, American imports of Mexican-manufactured goods have grown by 26%, a trend that dates back to the spring of 2020.

These trends are expected to continue growing alongside a widespread desire to diversify supply chains and avoid bottlenecks. The prevailing wisdom is one of reduced risk: the more decentralized and flexible a supply chain is, the less likely it is to be hit hard by disruptions. Companies that follow this principle are often better equipped to pivot and recover in the event of unforeseen upheavals, like extreme weather, geopolitical conflicts, and supply shortages.

Labor Challenges

Labor continues to be a concern for the industry. It’s now harder to find workers willing to take on transportation jobs. Demands for better wages, the threat of strikes, and diminishing union-supported jobs are all creating retention struggles across the logistics industry.

And, although the transportation industry is also seeing an increase in IT usage as a means to improve resilience, skill gaps have made it difficult to find talent to take on these jobs.

Transportation Takeaways

Here are some key takeaways from the 2023 CSCMP State of Logistics Report, by mode of transportation:

Motor – Although capacity is up, volumes have stayed more or less the same since last year. There’s been a decline in spot rates as well, which threatens margins for carriers.

Rail – For Class I railroads, operating income and total revenue are up, but rising costs have undermined operating ratios. According to the report, this sector also experienced “service-related issues, including increased terminal dwell, congestion, lagging network speeds, and some high-profile derailments.”

Air – Relative to 2022, revenue is predicted to decline, but remains above pre-COVID levels. Demand is down and capacity is up, as flights have increased. Fuel costs also fell 20%, compared to April 2022.

Ports – After dealing with bottlenecks and being over capacity for much of the pandemic, port demand is down and capacity is up. Carrier profits have declined relative to last year, and shippers are currently negotiating agreements.

Warehousing – Vacancy rates fell over the last year, and rents are increasing. There’s prevailing uncertainty about expanding warehousing, as many companies are trying to reduce overage.

3PLs – Shippers are now more open to partnering with 3PLs to streamline their operations.


This year’s report showcases a substantial increase in logistics stability than the year before. Supply chains are getting back in sync and restructuring to primarily focus on resilience over cost-saving measures. You can read the full report here.

Looking for a transportation and logistics partner? No matter the state of logistics, GlobeCon is there to support your logistics needs. We have over 35 years of experience in drayage, trucking, warehousing, and more.

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