1. 21st Annual “State of Logistics Report®”
The Great Freight Recession
3PL Summit & Chief Supply Chain Officer Forum 2010
eyeforTransport
Atlanta, GA
June 22, 2010
Rosalyn Wilson
Delcan Corporation

2. US Business Logistics Costs
1.39
1.31 1.34
1.18
1.10
1.01 1.03
0.97 0.95
0.92
$ Trillions
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3. The US Business Logistics System Cost is the
Equivalent of 7.7 Percent of Current GDP in 2009
$ Billions
Carrying Costs - $1.851 Trillion All Business Inventory
Interest 5
Taxes, Obsolescence, Depreciation, Insurance 233
Warehousing 119 Down 14.1%
Subtotal 357
Transportation Costs
Motor Carriers
Truck – Intercity 368
Truck – Local 174
Subtotal 542
Other Carriers
Railroads 50 Down 20.2%
Water (International 25, Domestic 4) 29
Oil Pipelines 10
Air (International 14, Domestic 15) 29
Forwarders 28
Subtotal 146
Shipper Related Costs 9
Logistics Administration 42
TOTAL LOGISTICS COST 1,095 Down 18.2%
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4. Logistics Cost As A Percent of GDP
10.3
9.5 9.5 9.8 9.9
9.3
8.8 8.6 8.8
7.7
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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5. Total US Business Inventories
Billions of Dollars
2300
US Recessions
2100
1900
1700
1500
1300
Recession Dates: 3/1/2001 to 11/1/2001 and 12/1/07 to 7/1/09
Source: US Department of Commerce, Census Bureau
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6. The Inventory to Sales Ratio Has Returned to
Pre-Recession Levels
1.50
1.45
1.40
1.35
1.30
1.25
1.20
20 20 20 20 20 20 20 20 20 20
00 01 02 03 04 05 06 07 08 09
Source: US Department of Commerce, Census Bureau
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7. US Average Commercial Paper Rates
Continued to Fall in 2009
Billions of Dollars
7
6
5
4
Percent
3
2
1
0
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Source: Board of Governors of the Federal Reserve System
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8. The US Business Logistics System Cost is the
Equivalent of 7.7 Percent of Current GDP in 2009
$ Billions
Carrying Costs - $1.851 Trillion All Business Inventory
Interest 5
Taxes, Obsolescence, Depreciation, Insurance 233
Warehousing 119
Subtotal 357
Transportation Costs
Motor Carriers
Truck – Intercity 368
Truck – Local 174
Subtotal 542
Other Carriers
Railroads 50
Water (International 25, Domestic 4) 29
Oil Pipelines 10
Air (International 14, Domestic 15) 29
Forwarders 28
Subtotal 146
Shipper Related Costs 9
Logistics Administration 42
TOTAL LOGISTICS COST 1,095
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9. Number of Truck Drivers vs Freight Carried
Drivers Freight
115.0
110.0
105.0
100.0
95.0
90.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Bureau of Labor Statistics, Bureau of Transportation
Statistics, and author estimates
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10. US Ports Lose Ground in 2009
Ports 2009 2008 2007 2006
Los Angeles 5,028,998 5,670,897 5,740,261 5,743,400
Long Beach 3,765,560 4,611,671 4,994,949 4,798,617
New York 3,587,740 3,992,258 3,935,262 3,678,247
Savannah 1,914,751 2,115,986 2,041,521 1,609,131
Oakland 1,398,420 1,394,684 1,451,326 1,414,782
Norfolk 1,375,632 1,591,566 1,573,273 1,424,993
Houston 1,256,049 1,370,759 1,415,657 1,295,366
Seattle 1,072,838 1,082,573 1,289,364 1,222,596
Charleston,
954,836 1,330,919 1,408,434 1,517,311
SC
Tacoma 873,708 1,129,301 1,150,590 1,095,896
Source: Journal of Commerce PIERS Database, measured in TEUs
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11. Monthly Tonnage Indicator for Internal Waterways
55
2006
50 2007
2008
45 2009
40
35
30
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Source: US Army Corps of Engineers, Navigation Data Center
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12. Index of Logistics Costs as a Percent of GDP
1989 - 2009
Inventory Transportation Total
110
US Recessions
90
Index 1985 =100
70
50
30
1990 1995 2000 2005 2009
Recession Dates: 3/1/2001 to 11/1/2001 and 12/1/07 to 7/1/09
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13. GDP Growth and Logistics Cost Growth
GDP Logistics Costs
2005 2006 2007 2008 2009
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14. Looking Ahead
• Real GDP estimate for the first quarter of 2010 was revised
downward recently to 3 percent, following a fourth quarter
2009 estimate of 5.6 percent
• Inflation rate remains low at 2.2 percent in April 2010 and the
cost of living declined .1 percent in April as well
• Industrial Production has expanded every month in 2010
10
Industrial Production
5
0
-5
-10
-15
Jan 07 Jul 07 Jan 08 Jul 08 Jan 09 Jul 09 Jan 10
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15. Looking Ahead
• Unemployment rose again to 9.9 percent in April 2010, but is
expected to decline in May
• The pace of job creation is picking up in the second quarter of
2010 and initial jobless claims are tapering off
• The For-hire transportation industry has lost over 300,000 jobs
since the start of the recession, more than half of them in 2009.
Jobs Lost 2009 Total Jobs Lost
Air (includes passenger) 20,100 50,300
Rail 17,200 20,800
Water 400 9,800
Truck 109,000 216,500
Pipeline 1,800 2,000
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16. Looking Ahead
2010 Truck Tonnage 2010 Rail Carloadings
2.00 4.5
Percent Change
Percent Change
1.50 3.0
1.00 1.5
0.50 0.0
0.00 -1.5
Jan Feb Mar Apr Jan Feb Mar Apr
Source: ATA Truck Tonnage Index, SA Source: AAR RailTime Indicators, SA
2010 Rail Intermodal 2010 Container Traffic
3.0 1.10
Percent Change
Million TEUs
1.5
1.05
0.0
-1.5
1.00
-3.0
-4.5 0.95
Jan Feb Mar Apr Jan Feb Mar
Source: AAR RailTime Indicators, SA Source: Global Port Tracker
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17. Summary
• 2009 Logistics Costs fell to $1.1 trillion
• Logistics cost were equivalent to 7.7 percent of GDP in 2009 –
the lowest level recorded to date
• Transportation costs dropped 20.2 percent and now account
for 4.9 percent of nominal GDP – all modes dropped
substantially
• Inventory carrying costs declined 14.1 percent and now
account for 2.5 percent of nominal GDP – both decreased
inventories and lower interest rates contributed
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18. • Copies of the 21st Annual State of Logistics Report© are
available at http://cscmp.org/
• More information and related interviews and quotes are
available at http://state-of-logistics.presslift.com/2010
Rosalyn Wilson
Delcan Corporation
703-587-6213
R.Wilson@Delcan.com
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