Supply Chain Management:  State of Logistics report says economy “has hit the wall”

“The recovery from the Great Recession has proven to be more elusive and prolonged than any other in our history,” said Rosalyn Wilson, the author of the SoL report

By ·

Business logistics costs rose 10.4 percent last year, totaling $1.21 trillion, which is about what American businesses paid for freight transport in 2010, according to the authoritative 22nd annual State of Logistics report released Wednesday.

Logistics costs as a percentage of Gross Domestic Product (GDP) climbed to 8.3 percent last year, up from 7.8 percent in 2009 but still below the 9.9 percent registered in 2007 and 9.4 percent in 2008.? 

?Transportation costs rose 10.3 percent from 2009 levels. Interestingly, trucking (which accounts for 78 percent of all freight transport on a revenue basis) continued to lag behind the other modes. Trucking costs rose 9.3 percent last year, compared to an average of 15.4 percent for the other freight modes combined.?
?
“The recovery from the Great Recession has proven to be more elusive and prolonged than any other in our history,” said Rosalyn Wilson, the author of the SoL report sponsored by the Council of Supply Chain Management Professionals. “The slow growth presented another year of challenges for the logistics industry.”?

Transportation costs ticked over the 10 percent last year after tumbling the previous two years. That’s because of higher freight volumes, fuel surcharges and what Wilson called “genuine rate hikes.”? 
“Freight volumes grew year over year, but unsteadily,” Wilson explained. “There were frequent spikes and valleys in the monthly tonnage, carload, intermodal and container data.” ? 

In a warning to shippers worried about capacity, Wilson said that volumes have recovered only about half of their recession losses. But industry capacity, especially in the trucking and air freight modes, “is close to being fully engaged,” she said.?

“The recession had a devastating effect on total industry capacity, which is much lower than it was in 2007,” Wilson said.?  ?

Looking ahead, Wilson said it appears the U.S. economy is “stalling.” She said the economy has been “in a fragile state for close to four years now and the highly touted recovery in some sectors” has not transferred to less robust areas.? 

“We may have hit a wall,” she said. “It’s been close to two years since the recession was pronounced over (but) for many Americans, things have not improved.”

For related articles click here.


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
eBook: Why Multi-Tier Supplier Collaboration is More Important Now
Explore the benefits of supplier collaboration including sharing demand forecasts, faster reactions to demand or capacity changes and well-coordinated product launches.
Download Today!
From the September 2017 Logistics Management Magazine Issue
While Amazon’s recent bid to purchase Whole Foods made mainstream headlines, the e-commerce giant will still need to adhere to time-tested realities. Any way you slice it, the integrated U.S. cold chain requires optimized service from existing ports, 3PLs, cold storage warehousing, transportation providers and high-value vendors.
Improving 3PL Management: Glanbia Adds Muscle to Logistics
Why Retail Supply Chain Transformations Fail - and how to get it right
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
EDITORS' PICKS
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...

2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...
LM Exclusive: Major Modes Join E-commerce Mix
While last mile carriers receive much of the attention, the traditional modal heavyweights are in...