(in)complete turnaround

The warehouse-logistics industry may be experiencing an uptick in business, but it apparently will take more than that to convince industry players that the economy has reversed course.

The annual Business Outlook published by the International Warehouse Logistics Associations (IWLA) finds that 66 percent of its mem ber companies (largely third-party logistics service providers) are in a growth mode and 60 percent intend to hire more employees in 2003. However, while 60 percent are either cautiously optimistic or very optimistic about the business climate for 2003, 40 percent are concerned or very concerned. Last year, only 29 percent described themselves as concerned.

"Business seems to have rebounded somewhat in 2003, but with the economy continuing to sputter, executives aren't ready to say that business has turned completely," says Joel Hoiland, IWLA's president and CEO."There still seems to be a fair amount of skepticism about what the future has in store."

The results were based on a 30-question survey sent to IWLA's 550 members in March. Aside from the good news concerning growth, the survey also reveals gains in space utilization for 2003. Just over half (51 percent) of the respondents expect to use more space this year than they did in 2002. The other bright spot is that 43 percent of IWLA members consider business to be better this year than it was last year,while 26 percent say business is the same.

Increasing costs continue to be a concern, especially when it comes to insurance. Sixty percent of the respondents expect health insurance costs to increase greatly, while another 37 percent expect s light increases. Almost all respondents (93 percent) expect some sort of increase in property insurance costs. Members also anticipate rate hikes for utilities and transportation.

The study shows that 36 percent of IWLA members are concerned with the financial status of their top 20 customers and that 85 percent expect pressure from customers to push down prices and increase services. Sixty-five percent plan to purchase technology in 2003. Forty-one percent plan a major equipment purchase this year, but half of those respondents expect their capital expenditures to be less than $250,000.