The Council of Supply Chain Management Professionals 24th Annual State of Logistics Report, released last week in Washington, D.C., suggests the economy continues to make headway, albeit at a slow and steady pace. The report showcases key trends and U.S. logistics costs for 2012, including both total and sector level detail.
Total U.S. business logistics costs rose 3.4 percent to $1.33 trillion in 2012 with inventory carrying costs up four percent and transportation costs up three percent. Increased carrying costs were due to higher taxes, obsolescence, depreciation and insurance tied to the rise in inventory levels, while increased transportation costs were due to higher rates, not increased volume.
The report suggests slow growth will be the "new normal" for the next several years, with GDP growth hovering just below the three percent level needed to cut into unemployment. Logistics faces a bumpy road, although the economy is showing promising signs. The trucking industry has had capacity issues and even in this lower volume environment will have difficulty meeting demand. The railroad industry is well positioned to take up the slack with intermodal services. Inventory management techniques are improving and these are likely to be some of the major lessons learned coming out of a very trying recovery.