Most logistics professionals participating in DC Velocity's 8th annual "Outlook Survey" of its readers see good times ahead for the U.S. economy in 2016, with 55 percent saying they hold an optimistic view of next year's business climate. DC Velocity, published by AGiLE Business Media, is a sister publication to CSCMP's Supply Chain Quarterly.

The majority said they plan to put their money where their mouths are, planning to increase spending on everything from material handling to freight transportation and software. About 22 percent said they were pessimistic about the business environment, while 23 percent were unsure.

Every year, DC Velocity polls its readers about their views on the U.S. economy, trends in logistics, and buying plans for related products and services. The 2016 survey compiled the responses of 109 subscribers who responded between Oct. 31 and Nov. 5, 2015. The group included manufacturers (36 percent); distributors (27 percent); service providers such as third party logistics providers (3PLs), warehousing, and trucking (21 percent); retailers (6 percent); and others.

This year, the results show that financial conditions are finally looking more predictable, and many supply chain businesses are ready to get back in the game. About 48 percent of respondents said their companies would generate strong revenue growth in 2016, with 13 percent expecting weak growth and 33 expecting flat numbers. The remaining 7 percent didn't know.

Respondents also showed a lack of concern over the direction of fuel expenses, a perennial nightmare of every transportation-industry professional. After spending 2015 watching oil prices tumble to ever-lower depths, most economists would bet the market would rebound at some point. But when we asked whether rising oil prices would boost the price of fuel at the pump in 2016, respondents shrugged. The responses were nearly even, with 53 percent saying yes and 47 percent saying no.

Another persistent concern for both shippers and carriers is the long-awaited capacity crisis triggered by a shortage of commercial drivers and rigs. About 45 percent said there would be no capacity shortage in 2016, while 29 percent said they were unsure, and 27 percent predicted a shortage of some degree.

In expectation of strong revenue growth, companies are loosening their purse strings, with 46 percent of respondents saying they plan to increase spending in 2016 on logistics and related products and services, such as material handling equipment, freight transportation, and supporting information technologies. Thirty-eight percent said they would hold spending steady, just 9 percent said they planned to decrease spending, and 7 percent didn't know.

We asked respondents how much their 2016 budgets would grow over last year's. Nearly 20 percent said their budgets would grow 1 to 2 percent, and a whopping 54 percent said they planned to increase spending by 3 to 5 percent. More than a quarter of respondents planned to boost spending by even more, with 13 percent planning a 5- to 9-percent jump and another 13 percent planning an increase greater than 10 percent.

So where is all that new spending going to go? We asked survey takers which material handling-related products and services they plan to buy in 2016. The top five are: Racks and shelving (37 percent), safety products (37 percent), lift trucks (36 percent), battery handling/batteries (29 percent), and conveyors (26 percent).

Freight transportation will be another supply chain sector seeing increased spending in 2016, with 44 percent of respondents saying their transport budgets would rise, compared to just 9 percent predicting a fall. Thirty-nine percent said this budget line would remain the same as last year, and the remaining 9 percent did not know.

For a more precise prediction, we asked respondents who planned to boost transportation spending how much those budgets would rise. Nearly half of those project a 3- to 5-percent rise in shipping budgets. About 28 percent said their budgets would increase by 1 to 2 percent, 15 percent of respondents said their budgets would increase by 5 to 9 percent, and 10 percent of respondents said their budgets would increase by more than 10 percent.

Respondents said they would focus that new spending primarily in less-than-truckload (LTL) freight (77 percent), followed by truckload motor freight (67 percent), small package (66 percent), airfreight (46 percent), and transportation-based 3PL services (46 percent).

It should be noted that shipping budgets could increase in response to higher freight rates charged by carriers, and may not necessarily be an indicator of improved end demand.

Survey respondents will also keep a close watch on spending. Asked what steps they planned to take in 2016 to reduce distribution costs, respondents said they would renegotiate rates with carriers (43 percent); consolidate more shipments into truckloads (40 percent); automate more work processes (34 percent); take more control over inbound freight (29 percent); and redesign their supply chain networks (28 percent).

Another way to streamline logistics operations is by investing in software platforms. In 2016, survey respondents plan to invest in a broad range of automated solutions, led by warehouse management systems (WMS—30 percent); inventory optimization software (22 percent); transportation management systems (TMS—21 percent); enterprise resource planning (ERP—20 percent); and business analytics/intelligence (19 percent).

About half of the group (51 percent) said their businesses use the services of a 3PL. The respondents themselves were closely connected to their firms' forecasting and buying decisions, with 74 percent saying they were personally involved in buying logistics-related products and services for their operations.