U.S. logistics costs outgrow GDP in 2010

By Freddie Pierce
Companies like UPS and FedEx continue to offer solutions to the logistics world as companies try to tame increasingly complex supply chains. You might...

Companies like UPS and FedEx continue to offer solutions to the logistics world as companies try to tame increasingly complex supply chains.

You might be surprised to know that U.S. logistics spending reached a record low in 2009 when compared to GDP. The lull in spending was quickly ended, however, when it was reported yesterday that logistics costs are expected to grow faster than the economy.

The United States spent 7.8 percent of its total GDP on logistics expenses in 2009, but that number rose to 8.3 percent in 2010 to $1.2 trillion, a $114 billion increase from 2009. The State and Logistics Report, issued by the Council of Supply Chain Management Professionals, said that rising transportation and inventory costs contributed to the spending increase.

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Where will the logistics world take us from here? According to Rosalyn Wilson, the author of the benchmark report, trucking volumes have returned to levels that are roughly half of recession losses, while industry capacity in trucking and air freight is “close to being fully engaged.”

Any increase in freight transport over the next few years then may be seen by rail, as Wilson said railroads can handle volume increases of 10 to 15 percent easily.

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