The accomplishments of the nation's logistics professionals in 2004 may not quite measure up to the standards of the White Queen, who told Alice in Through the Looking Glass that she sometimes managed to "believe as many as six impossible things before breakfast." But few observers would have believed that with all the challenges they faced last year, these same professionals would collectively be able to hold the line and prevent logistics costs from rising (when measured as a percentage of the total economy).
Yet, as Rosalyn Wilson reported in the 16th annual State of Logistics Report earlier this summer, they did just that. The annual report measures logistics efficiency by adding up all major logistics costs—inventory, transportation, warehousing, etc.—and then comparing the total to the nation's gross domestic product (GDP). Last year, for the second straight year, logistics costs held steady at 8.6 percent. (For more on the study results, see the story on page 13 of this issue.)
Can we hold the line in 2005? It seems unlikely. With demand for trucks outstripping supply and drivers increasingly hard to find, transportation and warehousing costs are soaring. The volume of goods flowing from the Pac Rim continues to add pressure to both ports and an intermodal infrastructure that's already creaking under the strain.
Add to that the difficulty and the expense of implementing initiatives like the Maritime Security Act, the Customs-Trade Partnership Against Terrorism, and the Container Security Initiative, all of which are aimed at protecting the logistics system from terrorists. Wilson addresses those initiatives in her report and concludes that, "To date, none of these programs [has] been successful in eliminating or significantly reducing our vulnerability."
Nonetheless, those programs appear to be here to stay, with all their associated costs and challenges. Preventing terrorists from taking advantage of the logistics network without choking off the free flow of commerce is no easy task. To slip into a sports metaphor for a moment, those protecting our ports essentially have to throw a shutout every day: the opponents score once, you lose. Maybe we should add that to the list of impossible things supply chain managers and security professionals in and out of government have to believe before breakfast every day.