21st Annual Study of Logistics and Transportation:Partnerships add value to the Masters of Logistics
September 01, 2012
Setting the baseline
Overall transportation spending as a percent of sales increased from 2011 to 2012. The data in Figure 1 on page 36 shows that companies who spent more than 5 percent of sales on domestic transportation increased year-over-year, rising from 21.2 percent to 26.7 percent in 2012.
Respondents reporting transportation spending greater that 3 percent of sales increased from 44.7 percent in 2011 to 47.8 percent this year. These increases occurred at a time when many in the profession considered the supply and demand for transportation to be somewhat balanced.
The increases in transportation spend, however, are not equally reflected across companies relative to size. The Masters’ domestic transportation spend as a percent of sales for 2012 was 2 percent to 3 percent on average—a decline from 2011 when it was 3 percent to 4 percent. Both small- and medium-sized companies reported increases in 2012, while the majority spent more than 4 percent of sales for transportation services. This is contrasted to 2011 when most small firms spent less than 3 percent of sales on this activity and medium-sized companies spent between 3 percent to 4 percent on average.
Why the change? One indicator is the change in strategic direction for many companies. Following several years of intense cost cutting, particularly in transportation spending, the 2012 study results point towards\ companies shifting some of their focus to maximizing profitability and asset utilization.
In the meantime, the percentage of respondents who reported that their primary objective is reducing costs has shrunk each of the past three years—findings that reveal that shippers again believe that you have to spend money to make money.
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