The Council of Supply Chain Management Professionals (CSCMP) 2022 State of Logistics Report, the 33rd version, was unveiled on June 21. Its title — and underlying theme — was that our nation’s supply chain was “out of sync.”
I found the title ironic because the report was very much out of sync with the traditionally high expectations for it. Perhaps “A Blinding Flash of the Obvious” would have been a better title. The headline — that logistics rose to 8 percent of GDP — totally ignored the implication that the US economy grew just over 5 percent.
The presentation did nothing to improve the report’s unveiling. It was poorly moderated, and although several panelists offered valuable insights, many of them had little to add other than paeans to cooperation and hackneyed phrases. There was also a major disconnect between the panelists (none seeing rate softness) and the general hysteria about the freight recession.
The State of Logistics used to be widely anticipated. Bob Delaney, the original author (assisted by the subsequent author, Roslyn Wilson) was not only “in the room where it happened” in many cases, he was the one who was making it happen. This report resembled a cut and paste rather than a bottom-up analysis.
The report also missed its “rendezvous with destiny.” “Supply chain” has entered the general population’s lexicon; however, I believe our industry has failed to communicate what is really happening — and why. We have allowed the blanket 4C excuse (COVID-19, China, congestion, and chassis) to stand as our final word. This has exponentially increased risk to commerce in a political universe where government increasingly feels compelled to do something — anything.
Charlatans, know-nothings, and media grifters increasingly drown out sober reporting and analysis. There are still bastions of responsible media; however, even some of the biggest players (e.g., 60 Minutes and The New York Times) have failed spectacularly to get the story. The coverage of our industry absorbed by the public increasingly resembles TMZ.
I frequently hear the excuse that our business is “too complicated” to concisely explain. I reject that contention as just lazy. Regardless, the report (and its length) had an opportunity to address complex issues, but failed to do so.
For those who believe my view is too harsh, I would challenge you to take a test. Pretend you are a supply chain participant, and you just took two hours out of your very busy day to listen to the presentation. What findings would you be willing to take to your boss — that were not already known — and not too absurd to bring forward? For example, would you take back one of the “Top 3” findings that control towers were essential? I think not.
Lack of focus on ‘issues of real concern’
To illustrate, consider how much more valuable the report could have been, had it focused on issues of real concern. Here are my [unranked] Top 10.
- How many of today’s issues are truly black swans versus the result of ignoring issues for years/decades? Did we plan to fail by failing to plan? How do we improve the public-private dialogue?
- Do the overall numbers support the scapegoating belief that logistics and transportation are the prime culprit for inflation? Is 8 percent of GDP sufficient to be the underlying cause?
- With the focus on sustainability, why such limited discussion on intermodal in the drive-by coverage of rail? Statements on J. B. Hunt, Knight-Swift, and Schneider were embarrassingly incomplete and incorrect, e.g., the report identified the latter two as intermodal marketing companies.
- Despite being another “Top 3” finding, insight on ESG was missing, i.e., how pervasive are carbon-free load programs? Personally, I can count customers that think green is anything other than lower rates on one hand.
- The report was also silent on the biggest issue of sustainability — shippers looking to their carriers to provide [cash] carbon credits.
- Charts on spot and contract rates are not analysis. Has shipper behavior towards carriers really changed and have sales channels permanently been transformed?
- The pronunciamento of the imminent arrival of self-driving trucks was offered without any factual basis — nor any discussion of the political obstacles.
- The discussion of reshoring and nearshoring was superficial at best. Not all verticals are the same. And there is little change to transportation demand if all that changes is where imports enter the country.
- For truck, the focus was on drivers – but they do not correlate to carrier counts. What about carrier market entry/exit driven by fuel and insurance? What about truckers that overpaid on tractors and trailers and are now upside down on payments with rising interest rates?
- Most importantly, why was there no discussion on possible reregulation and what impact that would have? In case the authors missed it, the STB and FMC are increasingly active, and ocean shipping was just partially reregulated by Congress.
Our industry needs real analysis that looks at what is — and is not — working. Trusted sources in the past must continue to earn that trust daily. Shoddy work and commercial shilling must be relegated to the sidelines. Otherwise, we will continue to remain out of sync with reality, our customers, and society as a whole.
Contact Theodore Prince at firstname.lastname@example.org.