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21st Annual Study of Logistics and Transportation:Partnerships add value to the Masters of Logistics

By Mary C. Holcomb, Ph.D., and Karl Manrodt, Ph.D., Contributing Editors
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.


About the Author

Mary C. Holcomb, Ph.D., and Karl Manrodt, Ph.D.
Contributing Editors

Mary Collins Holcomb, Ph.D., is Associate Professor of Logistics and Transportation at The University of Tennessee.  Dr. Holcomb was also a member of the faculty in Transportation and Logistics at Iowa State University, Ames.  She holds B.S., MBA, and Ph.D. degrees from The University of Tennessee.  Her professional career involved some eighteen years at the Oak Ridge National Laboratory in transportation research and policy issues for the U.S. Departments of Energy, Transportation, and Defense.  Dr. Holcomb’s background also consists of various industry experience with the former Burlington Northern Railroad, General Motors, Milliken & Company, and two years of collaborative research with Procter & Gamble.  She is a principal researcher in one of the longest running annual studies – Logistics and Supply Chain Trends and Issues – that has been conducted for more than 14 years.  Dr. Holcomb is the former editor of the Transportation Energy Data Book, author and co-author of numerous reports and articles in the area of transportation policy and logistics systems design.

Karl Manrodt, Ph.D., serves an Associate Professor in the Department of Management, Marketing and Logistics and Georgia Southern University, located in Statesboro, Georgia.  Prior to joining Georgia Southern, he served as the Executive Director for the Office of Corporate Partnerships and the Supply Chain Strategy Management Forum in the Department of Marketing, Logistics and Transportation at the University of Tennessee.  Degrees include a B.A. in Philosophy and Psychology, Wartburg College, M.S. in Logistics, Wright State University, and his Ph.D. at the University of Tennessee.  He is the recipient of the Chancellor’s Citation for Professional Promise, the Walter Melville Bonham Dissertation Scholarship, both at the University of Tennessee, and the E. Grosvenor Plowman Award awarded by the Council of Logistics Management.

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