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A new, influential report states logisticians and other transportation experts were “initially traumatized” but ultimately “proved resilient” as they adapted to the COVID-19 pandemic and ensuing economic upheaval. The 31st annual Council of Supply Chain Management Professionals (CSCMP) State of Logistics report released today says the “shocked economy will shrink this year, but the adapting is already under way” as logisticians adjust to new realities of transport planning and execution. The report is authored by Kearney in partnership with the Council of Supply Chain Management Professionals (CSCMP), and Penske Logistics. The report states that U.S. business logistics costs rose 0.6% to $1.63 trillion last year, or 7.6% of the nation’s $21.43 trillion Gross Domestic Product last year. That is a slight dip from the 7.9% of GDP that business logistics costs were in 2018—but a huge boost from the 19% bite of GDP that business logistics took in 1979, the final year of regulated trucking costs prior to the Motor Carrier Act of 1980. By comparison, the most efficient year in the past decade for business logistics costs was 2010, when total logistics costs were a scant 7.3% of GDP. The new report offers mostly glowing reviews of how logisticians coped with decimated supply chains and uneven logistics demand during the pandemic’s early days. It says logisticians responded to the crisis “often with prescience, efficiency, and a dollop of charm” in stepping up to help provide the nation with critical supplies. But it warns that the “size, shape and timing” of future economic recovery “remains in question.” Whether the recovery is a fast V-shaped, slower U-shaped or an even slower “Nike swoosh”-shaped one is an open debate among respected economists. A joint analysis by Kearney and Oxford Economics is predicting a 7.0% decline in U.S. real GDP this year, followed by an 8.6% rebound in GDP growth in 2021. The COVID-19-induced economy coma ended 126 months of economic growth—longest economic expansion in U.S. history. The report predicts that “some carriers”—without naming any—“may face bankruptcy” and “some shippers” may face higher rates. “To get through trying times, all parties will need to make smart investments in technology and use such technologies to deepen collaboration” between carriers, shippers, and third-party logistics providers (3PLs). Going modal, motor carriers grew 3%, driven mostly by private and dedicated fleets. Full truckload costs were $306.7 billion, a 1.4% increase over 2019. Less-than-truckload (LTL) jumped to $65.4 billion, up 1.3%. Private or dedicated trucking jumped 5% to $308.2 billion. Parcel and last-mile deliveries (mostly by UPS, FedEx and U.S. Postal Service) enjoyed an 8.5% jump in year-over-year revenue, to $114.4 billion, driven by e-commerce boom and “significant innovation,” the report said. Rail was down 1.4 percent to $83.9 billion. That was driven by declining volumes, especially in intermodal which dropped 4.3% to $22.5 billion. Declining coal demand as well as a shift to over-the-road trucking bit into rail revenue, the report said. Air cargo was the biggest modal plunge, dropping 9.7% to $75.2 billion as the sector faced slowing industrial volume, especially in the automotive sector. Water transport grew by 3.1% to $47.9 billion, as “pricing discipline kept rates healthy,” according to the report. Inventory storage costs jumped 6.6% as warehousing capacity remained tight. Warehouse delivered the highest square footage completed in a single quarter on record “and the market quickly swallowed it up,” the report stated. The report also issues a gentle warning to “normally unflappable” logistics leaders accustomed to fluctuations, volatility and crises. The COVID-19 pandemic “violently wrenched” supply chains worldwide, and logisticians have to prepare for the next upheaval as well. Simply put, logisticians can no longer afford to put all their eggs in one supply chain basket—for example, China’s. They need to build in more options and “suppleness” to their supply chains, it said. “The pendulum that once swung toward ultra-efficient, single-source, Just-in-Time, and heavily cost-focused supply chains will swing back in favor of flexibility and reserve capacity to cope with uncertainty and risk,” the report predicts. “The pandemic starkly brought this to life.”