We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » 20th annual State of Logistics Report highlights weakness in '08, shaky outlook for '09
newsworthy

20th annual State of Logistics Report highlights weakness in '08, shaky outlook for '09

July 1, 2009
Mark B. Solomon
No Comments

The 20th Annual "State of Logistics Report" released June 17 by the Council of Supply Chain Management Professionals painted a picture of a shaky U.S. economy and a logistics industry that will require an economic rebound in the United States to regain its strength.

The eagerly awaited report found that total U.S. logistics costs in 2008 slid to $1.34 trillion from $1.4 trillion in 2007, the first decline since 2003. Logistics costs as a percentage of U.S. gross domestic product dropped to 9.4 percent from 10.1 percent in 2007. The 2008 results were attributable to a 13.0-percent plunge in inventory carrying costs as interest rates declined precipitously, the report found.

The drop in the cost of capital may have been the only bright spot in the 2008 report. The average investment in all business inventories fell by $45 billion in 2008 as the value of existing inventory declined and as companies struggling with weak demand in the year's second half liquidated stock on hand rather than replenish inventories.

The combined impact of falling inventories and declining interest rates led to a 54-percent drop in the interest component of the report's calculation of inventory carrying costs.

Warehousing costs rose 9.5 percent year over year, while warehousemen reported a significant decline in inventory turns as goods spent more time in warehouses, the report said. By the end of 2008, warehousing rates were declining for the first time in three years, while vacancy rates were rising due to slowing demand, the report said.

No bottom in sight
In an interview with DC VELOCITY prior to the report's release, Rosalyn Wilson, the report's author, said she doesn't believe the U.S. economy "has hit bottom yet." She added that supply chain activity won't return to its historic norms until employment and the housing market stabilize and consumers feel more confident about their financial situations.

Wilson said that "we are seeing a permanent change in ... spending and consumption patterns" as Americans become more frugal in their buying habits. This will result in a painfully slow economic rebound and have a profound impact on the supply chain for years to come, she said.

Demand for trucking, which moves nearly 80 percent of the nation's freight, remains very weak and may not pick up appreciably until well into 2010, Wilson said. Freight rates will initially remain stable as volumes improve, she said. However, the significant reductions in trucking capacity during the past two to three years will lead to an upward spike in rates once the recovery takes hold, she said.

Supply Chain Services
  • Related Articles

    Annual "State of Logistics Report" shows industry looking in cloudy rear-view mirror

    Logistics expenditures hit record lows in '09, report says; led by sharp fall in transport spending

    U.S. fastest-growing oil producer in '09, BP report finds

Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

Recent Articles by Mark Solomon

Coming together for road safety: interview with Joshua Girard

Off the rails

Freight rate spikes shaking up the C-suite

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Cold chain giant Lineage Logistics buys its own rail operator

  • Biden names dozens of senior leaders to DOT, including FMCSA and FRA

  • Outlook 2021: What’s in store for logistics supply chain?

  • Cushman & Wakefield Brokers Sale of 170 Acres plus Lease for 1MSF Build-to-Suit for Home Improvement Retailer in Commerce City, CO.

  • Thriving in the long haul: interview with Colin Yankee

Now Playing on DCV-TV

Sick agv demo thumbnail

Optimize Load Handling Tasks with Industrial Mobile Robots

DCV-TV 4: Viewer Contributed
Intelligent sensors detect the presence of goods, check for empty shelves, or the correct alignment on the mobile platform towards the freight. The solutions range from simple detection sensors, thorough measuring devices, and 2D LiDAR sensors.

FEATURED WHITE PAPERS

  • Proven Benefits: A Compendium of Slotting Optimization Success Snapshots

  • Bridging Information Gaps in Dock and Yard Operations

  • How Intelligent Sensor Solutions Turn Data Into Action

  • Order picking Solutions: Understanding Your Options

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing