The average annual compensation for logistics professionals who participated in Logistics Management's 2004 Salary Survey was 6.6 percent higher than the previous year's average. That pay hike was just one of several indications that the job market for distribution professionals is brightening.

This time—the 21st for our annual salary survey—we asked our readers to answer questions about their salaries and careers online, rather than respond to a mailed questionnaire. After filtering out unqualified respondents, we compiled data from 1,319 logistics professionals—more than twice as many as the previous year's results. Only 12 percent of those respondents also took part in the 2003 study. Yet even taking into account the significantly different samples, the results still paint an upbeat picture of the logistics job market.

Before getting into the details, though, let's look at the profile of the typical salary survey respondent. Our average respondent in 2004 was 43 years old, a little younger than in past years. Other than youthfulness, the profile remains pretty much the same as it has been in the past—mostly male and college-educated. (Eighty-six percent of the survey participants were men, and 92 percent have some college education or beyond.) The average respondent has spent nine years with his or her current employer and has been in the current assignment for five years. The length of industry experience has declined, however, from 18.6 years in 2003 to 15.4 years in 2004. But the average number of direct reports increased slightly to 13.8, perhaps indicating that companies are starting to hire again.

After spending two years in the doldrums, compensation levels rose noticeably in 2004. Respondents to our survey said that on average they received a 5 percent raise last year. A year-to-year comparison of average salaries for 2003 ($78,600) and 2004 ($83,790), however, reveals a 6.6 percent jump, the third-largest increase in the past decade. The only better years were 2001, when salaries climbed 7 percent, and 1998, when paychecks soared 10.1 percent during the dot-com boom. (See Figure 1.)

Executive compensation often is tied to workplace results. Survey participants told us that on average, 9.3 percent of their yearly remuneration came from bonuses or incentives tied to performance measures.

Throughout the years, the survey results have shown that the bigger the title, the bigger the paycheck. As usual, vice presidents and general managers sit atop the pay-scale pyramid. Ten percent of respondents fit in that category; they earned an average annual salary of $133,633, a 6.7 percent increase over the $125,200 they earned in 2003.

Corporate and division managers took home $112,718 in annual compensation, 9 percent more than the previous year. These titles comprised 4 percent of the survey respondents. Logistics managers represented the largest title segment, with 22 percent of survey participants. Readers with that title witnessed a 12 percent hike in pay, reaching $81,048. Traffic managers were paid an average of $60,620, or 8 percent more than the previous year, while assistant traffic managers took home $54,545, or 5 percent more than they did in 2003. Traffic managers, by the way, made up 9 percent of the respondents.

Although the title of supply chain manager has become more common on business cards in the past few years, those respondents saw their paychecks shrink, from $98,400 in 2003 to $95,318 last year, a decrease of 3 percent. Supply chain executives represented just 7 percent of survey takers. Private fleet managers also suffered a small decline, from $58,100 in 2003 to $57,913 last year. Only 1 percent of the respondents, however, classified themselves as private fleet managers. (See Figure 2.)

Not only title, but also job function can impact pay levels. The more functions you're responsible for, the higher your pay. The 16 percent of respondents who are involved in supply chain management, which encompasses a broad range of business functions, earned the most with an annual average salary of $104,657. Nearly one-third (30 percent) of the survey takers said that their primary function was distribution or logistics, which also cover many different functional responsibilities. They came in second, with average pay of $92,754. Narrowly focused operations functions, such as inventory control and fleet management, were lower on the salary totem pole. (See Figure 3.)

Experience continues to count when it comes to compensation. Individuals with 20 or more years of experience in the profession made $95,748 on average. As years of experience decline, so do annual earnings. Managers with between 10 and 20 years of experience netted $88,310 in annual wages, while those with between five and 10 years of experience earned $76,146. A manager with fewer than five years of experience in the logistics field made only $63,097 in 2004.

Although experience was rewarded, getting all of that experience in one place was not. Individuals with fewer than five years of employment at their current companies earned an average salary of $81,889—higher than the average $80,795 salary for those who spent between five and 10 years with the same employer. Similarly, respondents who have been with their companies for 10 to 20 years made $90,361, exceeding the $87,747 paid to veterans who spent more than 20 years at their current companies.

Education levels had an equally important impact on earnings. Even a little college education is better than none: Respondents with some college received an average wage of $71,106, while those with only a high school degree picked up an annual salary of just $60,421. An undergraduate degree brought home an average of $85,393. As always, respondents with a Masters in Business Administration (MBA) earned the highest pay at $102,888 in 2004. Individuals with MBAs made less money in 2004 than they did the previous two years: $111,700 in 2003 and $103,300 in 2002. (See Figure 4.)

Advanced degrees shaped pay rates even for respondents who held the best-paying titles. General managers or vice presidents with only a high school education made an average salary of $66,633. College-educated general managers, on the other hand, earned $128,085. General managers with MBAs, meanwhile, were paid $151,788 a year. The best-paid general managers, at $198,311, were those who held other graduate degrees.

Another factor that continues to affect pay scales is gender. Men still make more money than women do, a disparity that has been constant throughout the history of the survey. In 2004 male respondents brought home an average of $87,486, while women received $63,364. That's a difference of $24,122, the biggest "gender gap" in more than a decade. For all titles, men made more money than their female counterparts. Just one example: a male logistics manager earned $82,715, while a woman in the same position earned $70,890.

Why the difference? No single factor stands out. Male respondents were only slightly older than their female counterparts, and women spend about a year longer with the same employer than do men. But men have more work experience (15.8 years) than women (12.4 years), and they supervised more people, managing 14.9 direct reports compared to 6.3 for women managers. (See Figure 5.)

In past surveys, respondents whose companies spent the most on freight transportation have been among the highest paid, but that wasn't the case this year. Executives working for companies that spent between $21 million and $100 million on transportation saw the biggest numbers on their W2 forms for 2004, averaging annual salaries of $101,371. Readers who work for companies that spend more than $100 million earned more than $93,000, but those spending less than $20 million were well below that figure. The less the company spent, the lower the average annual pay. (See Figure 6.)

As always, the survey found that different industries offer significantly different pay. Respondents who work for companies that manufacture instruments earned the highest wages, with $101,720 average annual salaries. The textile and apparel field offered the second-highest salaries with $96,697. The industry with the smallest paychecks was printing and publishing, where respondents received $72,096 on average. (See Figure 7.)

Where respondents work was reflected in the size of their paychecks. The eastern half of the country clearly was the place to be in 2004. The highest salaries could be found in New England, where readers reported an average salary of $87,895. Most of the regions boasting average annual pay of $80,000 or higher, moreover, were east of the Mississippi River. The lowest average salary came from the Great Plains states in the West North Central territory, where a logistics professional made $62,301 in yearly income. (See Figure 8.)

On a state-by-state basis, the highest pay was in Tennessee, where the average salary reached $102,459. The second-highest salaries were reported in New Jersey at $100,862. Surprisingly, the lowest was reported by respondents in New York City, where the average earnings were $58,684. (For a breakdown of salaries by the state, visit our website. Note states with fewer than 10 respondents will not be shown.)

This year's research found a direct connection between pay levels and job satisfaction. Only 2 percent of the survey respondents—those who made the lowest average salary of $63,300—reported that they were "very dissatisfied" with their jobs. The 8 percent of survey takers who described themselves as "indifferent" about their jobs had the next-lowest average salary, at $70,610. Another 9 percent, who fell into the "somewhat dissatisfied" category, reported average wages of $80,074.

The largest group of respondents (52 percent) said they were "somewhat satisfied" in their current jobs. This group reported average wages of $82,432, suggesting that an additional two thousand dollars might change an employee's attitude. Finally, the 30 percent of respondents who called themselves "very satisfied" made the highest salaries—$91,538 on average. Although money can't buy love, it does appear to buy a hefty amount of workplace satisfaction.

When we asked which factors led to job satisfaction, though, "salary" was not cited most often. Just under one-half (47 percent) of the respondents cited "a feeling of accomplishment" as affecting their satisfaction with their current jobs, while some 33 percent cited salary as an important influence. Other frequently mentioned factors included "advancement opportunities," noted by 29 percent, and "company benefits," cited by 21 percent. (Respondents were allowed to cite up to three factors influencing job satisfaction.)

If more money does indeed bring about greater job satisfaction, then this year could bring a lot more happiness for some logisticians. As the economy continues to improve, readers finally can take cheer that brighter days are ahead and wages will rise accordingly.