Executive Briefings

Cost of Business Logistics Last Year More Than 8 Percent of U.S. GDP, Report Finds

Business logistics costs rose to 8.3 percent of U.S. gross domestic product in 2010, as compared to 7.7 percent the previous year, according to the 22nd Annual State of Logistics Report from the Council of Supply Chain Management Professionals. The report, written by Rosalyn Wilson of Delcan Inc., further shows that 2010 was about on par with 2005, and still well below the pre-recession years.

The report has tracked and measured all costs associated with moving goods through the U.S. supply chain since 1988.  This year's report presents an overview of the 2010 economy, the industry's key trends, and the total U.S. logistics costs for 2010 and their percentage of the U.S. GDP.  It also examines which sectors of the industry recovered as well as those that didn't, and which areas can be targeted for increased profit and growth.  The research concludes with industry indicators for the future.

This year's report revealed that the cost of the U.S. business logistics system jumped up 10.4 percent in 2010, making up for more than half of last year's decline.  Business logistics costs rose to $1.2tr, an increase of $114bn from 2009.  Inventory carrying costs increased 10.3 percent last year due to higher costs for taxes, obsolescence, depreciation and insurance, which were offset by a further drop in the inventory carrying rate and warehousing costs.

Transportation costs were up 10.3 percent from 2009 levels, with trucking lagging behind the performance of other modes, rising only 9.3 percent compared to an average of 15.4 percent for the other modes combined.  Manufacturing and business spending were the bright spots during much of 2010, while consumer goods production was almost flat. Industrial production was up 5.3 percent in 2010, after declining 11.2 percent the year before.  The recovery from the recession has been elusive and more prolonged than any other in U.S. history, with the slow growth presenting another year of challenges for the logistics industry.

"As the economy recovers, those companies that use the statistics and industry insight contained in this report will be better prepared for their business activities ahead," said Rick Blasgen, CSCMP president and chief executive officer.

"This research is a key source of information that not only identifies macro trends and how the logistics discipline is impacted, but also details ways that company leaders can capitalize on the recovery as it occurs," Blasgen said.  "Having this knowledge helps supply chain leaders move forward in a more proactive and fact-driven way.

The report, sponsored by Penske Logistics, is free for CSCMP members and is available at http://cscmp.org/memberonly/state.asp. Otherwise, the price of the report is $395.00.

CSCMP, Penske Logistics

Business logistics costs rose to 8.3 percent of U.S. gross domestic product in 2010, as compared to 7.7 percent the previous year, according to the 22nd Annual State of Logistics Report from the Council of Supply Chain Management Professionals. The report, written by Rosalyn Wilson of Delcan Inc., further shows that 2010 was about on par with 2005, and still well below the pre-recession years.

The report has tracked and measured all costs associated with moving goods through the U.S. supply chain since 1988.  This year's report presents an overview of the 2010 economy, the industry's key trends, and the total U.S. logistics costs for 2010 and their percentage of the U.S. GDP.  It also examines which sectors of the industry recovered as well as those that didn't, and which areas can be targeted for increased profit and growth.  The research concludes with industry indicators for the future.

This year's report revealed that the cost of the U.S. business logistics system jumped up 10.4 percent in 2010, making up for more than half of last year's decline.  Business logistics costs rose to $1.2tr, an increase of $114bn from 2009.  Inventory carrying costs increased 10.3 percent last year due to higher costs for taxes, obsolescence, depreciation and insurance, which were offset by a further drop in the inventory carrying rate and warehousing costs.

Transportation costs were up 10.3 percent from 2009 levels, with trucking lagging behind the performance of other modes, rising only 9.3 percent compared to an average of 15.4 percent for the other modes combined.  Manufacturing and business spending were the bright spots during much of 2010, while consumer goods production was almost flat. Industrial production was up 5.3 percent in 2010, after declining 11.2 percent the year before.  The recovery from the recession has been elusive and more prolonged than any other in U.S. history, with the slow growth presenting another year of challenges for the logistics industry.

"As the economy recovers, those companies that use the statistics and industry insight contained in this report will be better prepared for their business activities ahead," said Rick Blasgen, CSCMP president and chief executive officer.

"This research is a key source of information that not only identifies macro trends and how the logistics discipline is impacted, but also details ways that company leaders can capitalize on the recovery as it occurs," Blasgen said.  "Having this knowledge helps supply chain leaders move forward in a more proactive and fact-driven way.

The report, sponsored by Penske Logistics, is free for CSCMP members and is available at http://cscmp.org/memberonly/state.asp. Otherwise, the price of the report is $395.00.

CSCMP, Penske Logistics