“State of Logistics Report” Outlines Costs in the Supply Chain

2012 can be characterized by a lack of sustained growth in the economy and by extension, the freight sector

By ·

The 24th annual “State of Logistics Report,” released by the Council of Supply Chain Management Professionals (CSCMP) and presented by Penske today reveals that total U.S. business logistics costs in 2012 rose to $1.33 trillion, a 3.4% increase from the previous year, remaining at 8.5% of the U.S. gross domestic product (GDP).

Other report highlights include:

• 2012 can be characterized by a lack of sustained growth in the economy and by extension, the freight sector
• Parts of the economy were made lean or right-sized such as truck and cargo jet fleets and retail inventory levels; supply chain practices were adapted to be even more mode-agnostic, making best use of the available capacity, reducing costs and still increase productivity
◦ Entire industries were expected to remake themselves following a less labor-intensive model with increased use of technology to improve quality and cut costs
• Logistics costs as a percentage of GDP in the U.S. compares quite favorably to that of trading partners. Slow economic growth has kept the percentage lower than normal, but the supply chain sector has made great strides in productivity, asset utilization and inventory management in the last three years
• The trucking industry is facing a serious capacity problem even in this lower volume environment and will have difficulty meeting demand with new rules such as the U.S. Department of Transportation’s new Federal Motor Carrier Safety Administration (FMCSA) Hours of Service (HOS) regulation going into effect on July 1, 2013, affecting driver availability
• Accumulated inventories across manufacturing, wholesale and retail have the potential to become a drag on the economy
• According to Armstrong and Associates, revenues for the 3PL sector rose 5.9 percent in 2012 and as a result, companies are looking to outsource logistics. The domestic transportation management segment was the fastest growing sector with gross revenues up 9.2 percent
• Intermodal will continue to grow and is becoming the most efficient way to move goods in the “new normal”

Meanwhile, ocean carriers will continue to be plagued with overcapacity and rate problems due to optimistic economic forecasts that led to companies expanding their fleets.

A full account of the presentation will be published in our sister publication—Logistics Management—next month.

Read More on the State of Logistics Report: New Order, New Opportunities for Logistics Managers from Supply Chain 24/7


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

All Topics
Latest Whitepaper
Maximizing Your Sales Team’s Effectiveness
Companies need to examine how to restructure their sales team to respond to different customers and subsequent buying behaviors and preferences.
Download Today!
From the November 2017 Logistics Management Magazine Issue
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships into true, collaborative partnerships—and greatly strengthened its logistics and supply chain operations in the process.
34th Annual Quest for Quality Awards: 2017 Awards Dinner
Trucking Regulations: Washington U-Turns; States put hammer down
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Make Your Products Smarter in the Supply Chain with the IoT
This webinar explores how temperature-sensing smart labels and inexpensive NFC tags are being used to extend product safety and efficiency beyond the shipping dock while also building a communication bridge to your customers.
Register Today!
EDITORS' PICKS
2017 NASSTRAC Shipper of the Year: Mallinckrodt; Mastering and managing complexity
An inside look at how a large pharmaceutical firm transformed its vendor and supplier relationships...
2017 Alliance Awards: Recognizing outstanding supply chain partnerships
In an era where effective supply chain collaboration is both highly valued and elusive, Logistics...

26th Annual Study of Logistics and Transportation Trends: Transportation at Digital Speed
While a majority of companies strongly agree that transportation is a strategically important...
34th Annual Quest for Quality Awards: Winners Revealed
Which carriers, third-party logistics providers, and North American ports have crossed the service...