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 SCMR Staff
June 16, 2011 - SCMR Editorial

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!

Recent Entries

Owners of corporate fleets and fuel buyers face two dilemmas: a limited supply of cost-effective, low greenhouse-gas fuels, and little information on fuel sustainability impacts across the full production and use value chain.

U.S. Carloads were up 5 percent annually at 294,738, and intermodal at 253,317 containers and trailers was up 3 percent.

When it comes to Congress actually getting its act together on a new long-term federal transportation bill, things remain as status quo as it gets, with the big takeaway being nothing really ever gets done, when it comes to passing a badly overdue and needed bill, rather than these band-aid extensions Congress keeps signing off on.

Truckload and intermodal pricing was up on an annual basis, according to the December edition of the Truckload and Intermodal Cost Indexes from Cass Information Systems and Avondale Partners.

While the official numbers won’t be issued until early February in its quarterly Market Trends & Statistics report, preliminary data for the fourth quarter and full-year 2014 intermodal output from the Intermodal Association of North America (IANA) indicates that annual growth was intact.

About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review. Patrick covers 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. Contact Patrick Burnson

Comments

Post a comment
Commenting is not available in this channel entry.