Total U.S. business logistics costs in 2011 rose to $1.28 trillion, a 6.6 percent increase from the previous year and accounting for 8.5 percent of the U.S. gross domestic product, according to the Council of Supply Chain Management Professionals’ 23rd annual “State of Logistics Report” presented by Penske Logistics on Wednesday, June 13, at a press conference at the National Press Club in Washington, D.C.
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 report reveals that with overall revenue 15.3 percent higher than 2010, railroads gained market share, especially in intermodal, and did not experience capacity problems faced by the trucking sector.
Trucking companies also are using intermodal rail help to offset the impacts of driver shortages and the costs of acquiring and maintaining new equipment. In spite of tightening capacity and an overall decline in volume, trucking rates were up 5 to 15 percent in 2011.
Even with the air cargo sector’s record year for exports, the industry still experienced a decline, with domestic air cargo revenue down more than 3 percent compared with less than a 1 percent decline in international revenue. Ocean carriers’ woes continued with growing excess capacity, rate erosion, service declines and operational losses.
Inventory carrying costs in 2011 continued their rising trend, and overall inventories have returned to pre-recession levels, which could be a cause for concern for the economy. The growth has occurred among wholesalers and manufacturers, while retail inventories remained flat, indicating that inventory management processes have changed.
“Part of our mission at CSCMP is to develop and disseminate research that helps our members understand how to do their jobs better,” said Rick Blasgen, CSCMP president and chief executive officer. “Knowing how logistics and supply chain costs affect and are affected by the larger economy is a key part of this understanding. The statistics and industry insights contained in this report will help companies better prepare for the business demands that lie ahead.”
The “State of Logistics Report” is available to CSCMP members free of charge as part of their member benefits at http://cscmp.org/memberonly/state.asp. The price of the report is $395.
“This report consistently delivers key insights that paint a broad picture of the supply chain industry and the U.S. economy,” said Joe Gallick, senior vice president of sales for Penske Logistics. “We’re pleased to be sponsoring this widely followed report once again.”