Logistics Costs Drop First Time in Six Years

(John D. Schultz — Supply Chain Management Review)

An annual benchmark released today [Wednesday] shows the impact of the recession on the U.S. logistics industry. The 20th Annual “State of Logistics Report” released by the Council of Supply Chain Management Professionals (CSCMP) reveals that, after rising over 50% during the previous five years, business logistics costs fell to 9.4% of U.S. Gross Domestic Product (GDP) in 2008. This number is down from 10.1% in 2007. For consumers, the new numbers indicate that the final, delivered cost of goods in the U.S. may have declined slightly.

Total U.S. logistics costs dropped to $1.3 trillion last year, a decrease of $49 billion from 2007. Interest rates plummeted to over 50% lower in 2008 than they were the prior year.

Since 1988, the report has tracked and measured all costs associated with moving goods through the U.S. supply chain. The report benchmarks key metrics in U.S. logistics such as transportation and inventory-carrying costs, freight volumes, and revenues, giving practitioners a big-picture view of the performance of the U.S. supply chain process. Read more here.