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The report, written by transportation consultant Rosalyn Wilson of Delcan, Inc., has tracked and measured all costs associated with moving freight through the U.S. supply chain since 1988. This year's report presents an overview of the economy over the past year, the logistics industry's key trends, and the total U.S. logistics costs for 2011. It also examines which sectors of the industry are recovering, which are facing challenges, and areas that can be targeted for increased investment. The research concludes with a brief overview of industry indicators for the remainder of 2012. The supply chain management benchmark report is now available for distribution.
This year's report reveals that with overall revenue 15.3 percent higher than 2010, railroads gained market share, especially in intermodal, and did not experience capacity problems faced by the trucking sector. Trucking companies are also using intermodal rail help to offset the impacts of driver shortages and the costs of acquiring and maintaining new equipment. In spite of tightening capacity and an overall decline in volume, trucking rates were up 5 to 15 percent in 2011.
Even with the air cargo sector's record year for exports, the industry still experienced a decline, with domestic air cargo revenue down more than 3 percent compared with less than a 1-percent decline in international revenue. Ocean carriers' woes continued with growing excess capacity, rate erosion, service declines, and operational losses.
Inventory carrying costs in 2011 continued their rising trend and overall inventories have returned to pre-recession levels, which could be a cause for concern for the economy. The growth has occurred among wholesalers and manufacturers while retail inventories remained flat, indicating that inventory management processes have changed.
Other report highlights include:
• Business logistics costs increased to $1.28tr in 2011, up $79bn from 2010
• Logistics as a percent of our nominal GDP eased to 8.5 percent, bringing us back up to 2003 levels
• Trucking, which comprises 77 percent of the transportation component, posted a 6.2-percent rise, but the real leader was the railroad sector which saw a 15.3-percent increase
• The employment forecast for jobs in the logistics industry look strong, but there are many factors contributing to uncertainty in the sector
• Declines in manufacturing, financial difficulties in the European Union, China's slowing economic growth and shrinking import/exports all have the potential to stall momentum in the industry
• Inventory carrying costs increased 7.6 percent. The increase in carrying costs was due to higher costs for taxes, obsolescence, deprecation and insurance
• Air, water, and pipeline revenues declined in 2011, while railroad, truck and forwarders experienced revenue growth
• One of the leading manufacturing sectors was motor vehicles and parts, which grew 17.7 percent, and for the final three months of 2011 Americans spent more on vehicles, and companies restocked their supplies at a fairly robust pace
"Part of our mission at CSCMP is to develop and disseminate research that helps our members understand how to do their jobs better," said Rick Blasgen, president and chief executive officer of CSCMP. "This is why we believe it's important to sponsor the annual 'State of Logistics Report,' which we present with support from Penske Logistics."
"This report consistently delivers key insights that paint a broad picture of the supply chain industry and the U.S. economy," said Joe Gallick, senior vice president - sales, Penske Logistics. "We're pleased to be sponsoring this widely followed report once again."
Visit the CSCMP website for information on acquiring the entire report.
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