LOMBARD, Ill. — Total US 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 (GDP), according to the 23rd Annual “State of Logistics Report.
The report, authored by transportation consultant Rosalyn Wilson of Delcan, Inc., has tracked and measured all costs associated with moving freight through the US supply chain since 1988. It is published by The Council of Supply Chain Management Professionals (CSCMP), and presented by Penske Logistics.
This year’s report presents an overview of the economy over the past year, the logistics industry’s key trends, and the total US logistics costs for 2011. It also examines which sectors of the industry are recovering, which are facing challenges, and areas that can be targeted for increased investment. The research concludes with a brief overview of industry indicators for the remainder of 2012. The supply chain management benchmark report is now available for distribution.
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 are also 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.