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
Supplier Relationship Micro Management
Optimizing Across Six Guiding Principles
Download Today!
From the July 2017 Logistics Management Issue
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish demand and political doubt. The result: “cognitive dissonance” that finds a $1.4 trillion market scratching its head.
2017 Truckload Brokerage Roundtable: Technology continues to connect the dots
Cloud Transportation Management Systems (TMS): Weis Markets streamlines “both sides” of the DC door
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
28th Annual State of Logistics: Into the great unknown
E-commerce continues to fuel a boom that’s tempered by overcapacity, rate pressures, sluggish...
2017 Top 50 3PLs: Investment and Consolidation Maintain Traction
The trend set over the past few years for mergers and acquisitions has hardly subsided, and a fresh...

The Evolution of the Digital Supply Chain
Everyone is talking about terms like digitization, Industry 4.0 and digital supply chain management,...
2017 Salary Survey: Fresh Voices Express Optimism
Our “33rd Annual Salary Survey” reflects more diversity entering the logistics management...