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The 21st Annual “State of Logistics Report ® ” released this week by the Council of Supply Chain Management Professionals (CSCMP) , showed an economic slip in the U.S. logistics industry. The annual report, presented by Penske Logistics, cited that lower inventory levels, a drop in modes of transportation and interest rates (which hit historic lows) contributed to the decline which dropped to 7.7 percent of U.S. Gross Domestic Profit in 2009. A sharp decline considering the 2008 rate was at 9.3 percent.
By mid-year in 2009, warehouses, which were full of inventory earlier in the year, dropped 2 percent due to inventory relocation or movement. These empty spaces combined with a fall in inventory-carrying costs and plummeting interest rates were to blame.
Additionally, the report revealed that out of all the modes of transportation, trucking (which accounts for a large percentage of transportation) dropped 9 percent in the amount of tonnage transported. Other modes of transportation such as rail and ocean carriers were also hit hard. In spite of lowering their rates, some ocean carriers continued to report historic losses. However, by the close of 2009, the air cargo industry showed a stronger finish. Elements such as a large amount of space and a lack of freight to move, has caused shippers to continue to drop their rates.
But not all the report’s findings are doom and gloom. According to Penske Logistics President, Vince Hartnett, the trucking and supply chain industries are showing signs of turning around in the right direction. If this positive ripple effect continues, trucking and logistics firms will need to add capacity resulting in additional jobs for drivers.
The “State of Logistics Report ®” released their first report and findings back in 1988 and continues to provide valuable information related to the U.S. supply chain process. Each year the report factors in key measurements such as transportation, freight volumes, inventory-carrying costs and revenues.
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