Logistics Costs, United States, 1980-2017

Logistics Costs, United States, 1980-2017

Note: In billions of USD. Source: Council of Supply Chain Management Professionals, State of Logistics Report, (after 2012). Logistics Management & Distribution Report (before 2012).

The composition of logistics costs is mainly attributed to inventory carrying costs, transportation costs, and administrative costs. The main reason why transportation costs are increasing in relation to inventory costs is that a growing share of the inventory is in circulation. It is not necessarily because transportation costs are more expensive, although they tend to fluctuate with fuel prices (e.g. fast growth of transportation costs between 2005 and 2008). Thus, more units of cargo are in transportation modes (mostly trucks and rail for the United States) in relation to units of cargo held in warehouses and distribution centers. Further, the shift to flow-based logistics implies less time for orders spent in distribution centers.