CSCMP’s Annual report shows decline in logistics industry
CSCMP’s 20th Annual “State of Logistics Report®” released by the Council of Supply Chain Management Professionals (CSCMP) shows that the US logistics industry is finally facing the blow of recession. The report has tracked and analyzed all the costs associated with moving goods through the US supply chain since 1998 and has included key metrics in US logistics such as transportation and inventory-carrying costs, freight volumes, and revenues.
Founded in 1963, the Council of Supply Chain Management Professionals is the leading
worldwide professional association dedicated to education, research, and the advancement of the supply chain management profession.
According to the report which was released at the National Press Club in Washington, DC, after rising over 50% during the previous five years, business logistics costs fell to 9.4% of US Gross Domestic Product (GDP) in 2008. This number is down from 10.1% in 2007.
Total US logistics costs dropped to $1.3 trillion last year, a decrease of $49 billion from
2007. Interest rates plummeted to over 50% lower in 2008 than they were the prior year.
In 2008, inventory-carrying costs plunged 13% due to both a 2.2% drop in
inventories and an 11.2% decrease in the inventory-carrying rate. Warehousing costs, however, rose 9.5%.
Transportation costs were only up 2% over 2007 levels. Trucking, which comprises 78% of the transportation component, increased 1.3% compared to 4.4% for rail, air, and ocean modes.
Rick Blasgen, CSCMP president and CEO said, “The economy will eventually recover, and when it does, those companies that use the statistics and industry insight contained in this report will be better prepared for the business boom ahead. This research details ways that company leaders can capitalize on the recovery when it occurs, such as restructuring their distribution networks to maximize efficiency and minimize miles, investing in technologies to facilitate ‘green’ transportation, and improving real-time data flows to increase visibility and enhance productivity.”
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