Transportation costs up, trucking lagging other modes, report finds

LOMBARD, Ill. — U.S. transportation costs in 2010 were up 10.3 percent over 2009 levels, according to the 22nd Annual State of Logistics Report.

The report, released this week by the U.S.-based Council of Supply Chain Management Professionals (CSCMP), also showed that trucking, which comprises 78 percent of the transportation component, continued to lag behind the performance of other modes, rising only 9.3 percent compared to an average of 15.4 percent for the other modes combined

This year’s report also revealed that the cost of the U.S. business logistics system jumped up 10.4 percent in 2010, making up for more than half of last year’s decline with costs rising to $1.2 trillion, an increase of $114 billion from 2009.

Authored by transportation consultant Rosalyn Wilson of Delcan, Inc., the report has tracked and measured all costs associated with moving goods through the U.S. supply chain since 1988.

This year’s report presents an overview of the 2010 economy, the industry’s key trends, and the total U.S. logistics costs for 2010 and their percentage of the U.S. GDP.

The cost of the U.S. business logistics system jumped up 10.4 percent in 2010, making up for more than half of last year’s decline. Business logistics costs rose to $1.2 trillion, an increase of $114 billion from 2009. Inventory carrying costs increased 10.3 percent last year due to higher costs for taxes, obsolescence, depreciation, and insurance, which were offset by a further drop in the inventory carrying rate and warehousing costs.

Manufacturing and business spending were the bright spots during much of 2010, while consumer goods production was almost flat. Industrial production was up 5.3 percent in 2010, after declining 11.2 percent the year before. The recovery from the recession has been elusive and more prolonged than any other in U.S. history, with the slow growth presenting another year of challenges for the logistics industry.

“As the economy recovers, those companies that use the statistics and industry insight contained in this report will be better prepared for their business activities ahead,” said Rick Blasgen, CSCMP president and CEO.

“This research is a key source of information that not only identifies macro trends and how the logistics discipline is impacted, but also details ways that company leaders can capitalize on the recovery as it occurs,” Blasgen said. “Having this knowledge helps supply chain leaders move forward in a more proactive and fact-driven way.

 


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