Guest: Zac Rogers of Colorado State University on supply chains in 2025; What ports want from the new administration; Cutting corners on the job
Jan 17, 2025
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In this episode, Zac Rogers, Associate Professor of Supply Chain Management at Colorado State University, offers a deep dive into the logistics landscape as we head into 2025. He discusses the vital role of the Logistics Managers' Index in understanding supply chain health. Zac highlights the eight-point wish list from the American Association of Port Authorities, addressing urgent policy needs. He also reveals alarming trends in workplace safety, where workers are pressured to cut corners, jeopardizing compliance and safety. The talk balances challenges with optimism for future improvements through technology.
The logistics sector is shifting from just-in-time to just-in-case inventory practices to adapt to emerging global uncertainties and demand pressures.
Workforce quality and safety are at risk as employees face increased pressures, prompting a concerning trend of cutting corners in operations.
Deep dives
Health of the Logistics Economy in 2025
The logistics economy is showing signs of recovery as 2025 begins, with inventory levels stabilizing and consumer demand appearing strong. The Logistics Managers Index (LMI) indicates that inventory levels are neutral, suggesting retailers have sold through much of their stock, which bodes well for transportation and warehousing utilization. Recent metrics show transportation prices are increasing, reaching levels not seen since early 2022, while transportation capacity remains steady, indicating a gradual and sustainable growth. This improvement signifies the best outlook the logistics industry has experienced in several years, moving away from the volatility seen during the pandemic.
Shifts in Supply Chain Management Strategies
As supply chain leaders forecast 2025, there is a noted shift from just-in-time (JIT) inventory practices to a more cautious just-in-case (JIC) approach due to uncertainties surrounding tariffs and trade regulations. Industry professionals anticipate an increase in inventory levels as they prepare for potential price hikes and the need for greater warehousing capacity. The sentiment among stakeholders reflects an expectation for continued growth in transportation and warehousing prices, suggesting proactive adjustments to supply chain strategies. This strategic pivot is aimed at maintaining resiliency in light of unpredictable global market conditions.
Challenges in Workforce and Safety
The logistics and manufacturing sectors are confronting significant challenges related to workforce quality and safety standards, as pressures to enhance productivity lead to compromised work quality. A study reveals an alarming trend of workers witnessing peers cutting corners and endangering compliance in pursuit of meeting high demands, which is exacerbated by ongoing labor shortages and economic pressures. Despite the recognition of potential improvements through AI and emerging technologies, many employees express skepticism, stating that they have yet to see tangible benefits. The increasing pressures highlight the urgent need for strategies that prioritize employee safety and operational integrity in the logistics industry.
Our guest on this week's episode is Zac Rogers, associate professor of operations and supply chain management, Colorado State University. 2025 is just two weeks old and most of us have barely settled into the new year. Considering the unknown economic outlook, politics, possible tariffs, and ongoing turmoil around the world, it could be another interesting and a possibly volatile year for supply chains. Our guest shares his insights based data from on his role in helping to produce the monthly Logistics Managers' Index.
We’re in the middle of the transition season for a new administration in Washington DC. There are a lot of unknowns in this time of change, but one thing that's definitely happening is that business interests are busy lobbying politicians to protect their interests. And this week we saw some details that show what policies supply chain interest groups might want to happen in coming years. This was news from the American Association of Port Authorities (AAPA), which released an eight-point wish-list for its recommended policy agenda to support the nation’s seaports.
Manufacturing and logistics workers are raising a red flag over workplace quality issues according to industry research released this week. And it’s all related to internal and external pressures that are causing workers to cut corners, risking both safety and compliance demands.
Supply Chain Xchange also offers a podcast series called Supply Chain in the Fast Lane. It is co-produced with the Council of Supply Chain Management Professionals. A series of ten episodes is now available on the "State of Logistics." The episodes provide in-depth looks into the current states of key transportation modes, such as trucking, rail, air, and ocean. It also looks at inventory management, 3PLs and more. All ten episodes are available to stream now. Go to your favorite podcast platform to subscribe and to listen to past and future episodes. The podcast is also available at www.thescxchange.com.