Viewpoint: Freight moves the economy

If you’re looking for a good summer read to slip into your beach bag, look no further than the issue of Logistics Management (LM) that you’re currently holding—especially if you’re a fan of “feel-good” bestsellers.

By ·

If you’re looking for a good summer read to slip into your beach bag, look no further than the issue of Logistics Management (LM) that you’re currently holding—especially if you’re a fan of “feel-good” bestsellers.

As we have for the past 25 years, LM has devoted a significant portion of our July issue to putting the Annual State of Logistics Report into context for logistics professionals. The report, which encapsulates the cost of the U.S. business logistics system during the previous year, represents the clearest snapshot available of how economic conditions will mold the future logistics and transportation landscape.

The release of the report—which took place on June 23 at the National Press Club in Washington, D.C.—sparks our team’s annual investigation into the details of the findings and sends our entire editorial staff on a quest to summarize where each transportation mode stands in terms of service, capacity, and rates.

This year’s event marked the 26th year that the report has been released. It also marks the 12th year it has been authored by Rosalyn Wilson, a 33-year industry veteran who’s now a senior business analyst with Parsons Corporation where she focuses on the progress of the overall supply chain industry. Wilson has been working on the report since 1994 and assumed full responsibility in 2004 following the passing of the report’s creator, Robert Delaney.

Beginning on page 24, Contributing Editor John Schulz—who was in attendance at the Press Club last month—kicks off our comprehensive coverage with his high-level analysis of the report. So, what is the state of logistics coming out of 2014?

“There’s good news on all sides of the logistics and transportation equation,” says Schulz. “Transportation costs rose by 3.6 percent last year due to stronger shipment volumes, signaling growth in all modes except air.”

At the same time, overall logistics cost as a percentage of GDP dropped to 8.3 percent—a near historic low. “The percentage of GDP number indicates that logistics managers were able to hold costs in check despite fluctuating volumes and tight capacity due to infrastructure constraints and labor issues on the West Coast—and that’s pretty damn impressive.”

And according to Wilson, when you roll up all of the numbers—inventory carrying costs as well as transport costs—along with the cost management performance by logistics professionals, “2014 was the best year for the overall supply chain industry since the Great Recession.”

At the foundation of this industry “feel-good” story is the fact that U.S. consumers have stepped back up to the plate and are swinging for the fences.

“It’s quite simple,” says Schulz. “Consumer confidence was clearly the missing element over the previous three or four post-recession reports. All of a sudden consumers started to spend, ratcheting up shipments and pressure on a burdened freight network—and that network was equal to the task despite the many challenges.”

Let’s keep in mind that while consumers play a large part in driving freight volumes, it’s the efficient delivery of that freight that moves the overall economy. “All logistics managers should take some pride in this report,” adds Schulz.

About the Author

Michael Levans, Group Editorial Director
Michael Levans is Group Editorial Director of American Truck Media’s Supply Chain Group of publications and websites including Logistics Management, Supply Chain Management Review, Modern Materials Handling, and Material Handling Product News. He’s a 23-year publishing veteran who started out at the Pittsburgh Press as a business reporter and has spent the last 17 years in the business-to-business press. He’s been covering the logistics and supply chain markets for the past seven years. You can reach him at [ protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.

Latest Whitepaper
2019 Top 5 Trends of Enterprise Labeling
This year’s sixth annual Top 5 Trends in Enterprise Labeling report outlines significant shifts in labeling that are impacting businesses and global supply chains at an unprecedented level.
Download Today!
From the April 2019 Logistics Management Magazine Issue
This month we roll out the findings of Logistics Management’s 35th Annual Salary Survey, a research project conducted by American Truck Research Group (PRG) that serves as the foundation of our best-read editorial feature of our publishing year. And it’s no surprise that the full study is also the most downloaded PRG report.
Next-Generation Data Capture Emerges
2019 Air Cargo Roundtable: Volumes and pricing gathering speed
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly newsletter!
Latest Webcast
Case Study: Enabling the Autonomous Supply Chain
During this webinar Nucleus Research and One Network will dissect a global company's strategy to leverage a multi-party network to enable the autonomous supply chain.
Register Today!
35th Annual Salary Survey: Compensation matters more than ever
While job satisfaction remains the primary reason for today’s logistics managers to stay with one...
2019 Rate Outlook: Pressure Builds
In 2019, the world economy will enter a third straight year of broad-based growth, but many...

2019 Transportation Management Systems (TMS) Market Update: Keeping pace with the times
The transportation management systems market is growing right along with the number of challenges...
The Logistics News that Shaped 2018
Every year at this time, group news editor Jeff Berman combs through the mountain of news that was...

узнать больше