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U.S. logistics has best year since Great Recession

CHICAGO: The Council of Supply Chain Management Professionals (CSCMP) says total U.S. logistics costs rose to US$1.45 trillion in 2014, a 3.1 percent increase from the previous year.

According to its 26th annual "State of Logistics" report, underwritten by Penske Logistics, shipper costs were lower than the U.S. gross domestic product (GDP) last year, resulting in a slight decline in logistics as a percent of GDP from 8.4 percent to 8.3 percent.

Penske LogisticsThe CSCMP says the U.S. supply chain industry experienced its best year since the Great Recession as the transportation sector grew by 3.6 percent due to stronger shipment volumes rather than higher rates.

The report says the U.S. economy was on "solid ground" in 2014 with consistent new job creation, a small rise in real net income and household net worth, low-to-moderate inflation and lower gas prices.

Noting the truck driver shortage remains a key concern for the logistics sector, the American Trucking Associations estimates the industry needs 35,000 to 40,000 more drivers as the annualized turnover rate remains above 95 percent.

The report says air cargo costs declined 1.2 percent in 2014 as competition from other modes kept rates down. However a record US$968 billion of high value merchandise was moved by air last year - US$443.8 billion in U.S. exports and US$543.3 in imports.

Railroad sector costs grew 6.5 percent as a 4.5 percent increase in traffic volume brought the rail industry close to pre-recession volumes. Intermodal volume increased 5.2 percent, surpassing the 2013 record total as freight forwarder costs rose 5.4 percent overall due to an increase of 7.4 percent in the 3PL sector.

Marc Althen, president of Penske Logistics commented: "While demand for logistics is increasing, the industry faces a talent shortage and needs more logistics engineers, technology professionals, warehouse workers, and truck drivers to meet the needs of current and evolving freight fulfillment models businesses and consumers rely on for their goods and services."

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