What is this?

Logistics services represent ~€3 trillion in spend worldwide, nearly half of which is managed from North America or Europe. Half of this goes to road transport (trucking), with the remaining split across a tapestry of transport modes (ocean, sea, barge, air, parcel, postal, and so forth) and non-transport services (warehousing, customs clearance, 4PL oversight, and so forth). For every €100 spent (or received) on anything in the world, €4 will be on logistics. While this is an enormous amount, it actually is declining as a fraction of world GDP. A century ago shipments might have taken months and cost a fortune. Even in the year 2000 a same-day delivery was science fiction. The quality of logistics services grew while their cost (relative to other economic activity) dropped steadily. This grand narrative— continuous and reliable improvement on cost and service— is the key to how we see the mid-term outlook of logistics procurement needs. While the big picture is positive, for most procurement professionals it is an insufficient miracle. It means little to them that logistics is getting better over the decades if its frustratingly underperfoming now. It should be simple to find counterparties and strike fair agreements for logistics services. But it's not.

This newsletter is a series of articles that explores how these two aspects of logistics are playing out: the near term failures & fumbles, framed within epic progress over the long term.