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Home » Meaningful news you can use
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Meaningful news you can use

August 27, 2012
Rick Blasgen
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Part of our mission at the Council of Supply Chain Management Professionals (CSCMP) is to develop and disseminate research that helps our members understand how to do their jobs better. Knowing how logistics and supply chain costs affect and are affected by the larger economy is a key part of this understanding. That's why we believe it's important to sponsor the annual "State of Logistics Report," presented by Penske Logistics.

The report, authored by transportation consultant Rosalyn Wilson of Delcan Inc., has tracked and measured all costs associated with moving freight through the U.S. supply chain since 1988. This year's edition provides an overview of the economy over the past year, the logistics industry's key trends, and the total U.S. logistics costs for 2011. It also looks at which industry sectors are recovering, which are facing challenges, and which areas can be targeted for more investment. The research concludes with a brief overview of industry indicators for the rest of 2012.

If I had to summarize the picture painted by this year's report in one sentence, it would be this: Led by trucking and rail transportation, the U.S. supply chain and logistics industry is continuing its slow rebound. After the travails of 2008?2009, that's news we can all appreciate. There's more good news (and some that's not so encouraging) in the report. Here are some highlights:

  • Business logistics costs reached US $1.28 trillion, a 6.6-percent increase from the previous year, accounting for 8.5 percent of U.S. gross domestic product (GDP) in 2011.
  • Railroads gained market share, especially in the intermodal sector, without experiencing capacity problems.
  • Trucking rates rose 5 to 15 percent in 2011. Meanwhile, carriers are using intermodal to help offset the impacts of driver shortages and the costs of acquiring and maintaining new equipment.
  • Despite a record year for exports, the air cargo industry still experienced an overall decline in revenues.
  • Ocean carriers continue to struggle with excess capacity, rate erosion, service declines, and operating losses.
  • Inventory carrying costs continued to rise in 2011, and overall inventories have returned to pre-recession levels.

That's just a fraction of the valuable data included in the "State of Logistics Report." I encourage all of you to get your own copy of this influential research. The report is available free of charge to CSCMP members; nonmembers can purchase it at cscmp.org.

As the U.S. economy continues its rebound, companies that use the statistics and insights contained in the "State of Logistics Report" will be better prepared for the business demands that lie ahead. This research not only identifies macro trends and how they influence logistics and supply chain practices, but also details some of the ways supply chain leaders can capitalize on the recovery. Having this knowledge will surely help supply chain executives make better, smarter decisions in the months ahead.

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Rick Blasgen is President and Chief Executive Officer of the Council of Supply Chain Management Professionals (CSCMP).

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