{"id":652,"date":"2015-07-16T05:20:06","date_gmt":"2015-07-16T05:20:06","guid":{"rendered":"http:\/\/quicktransportsolutions.com\/blog\/?p=652"},"modified":"2017-02-07T23:14:11","modified_gmt":"2017-02-07T23:14:11","slug":"the-state-of-logistics","status":"publish","type":"post","link":"https:\/\/quicktransportsolutions.com\/blog\/the-state-of-logistics\/","title":{"rendered":"The State of Logistics"},"content":{"rendered":"

It appears 2014 was the best year for the supply chain since the recession ended. The transportation sector grew by 3.6 percent over the course of the year.<\/p>\n

The primary growth driver was not higher rates, but rather stronger shipment volumes. Even so, the truck driver shortage continues to be a thorn in the side of the logistics sector.<\/p>\n

Data Sources<\/strong><\/p>\n

All of this information was contained in the Council of Supply Chain Management Professionals\u2019 26th<\/sup> Annual State of Logistics Report<\/em>. The report is designed to provide an overview of the economy\u2019s overall performance over the prior year. It also discloses total logistics costs for the prior year and discusses transport trends.<\/p>\n\n\n\n
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For 2014, the report shows that business logistics costs rose to $1.45 trillion. This represents a 3.1 increase over the prior year. The logistics cost growth was lower, however than the growth rate of nation\u2019s overall GDP.<\/p>\n

Overall, the report shows the U.S. economy was on much firmer ground last year. The sector saw consistent creation of new jobs, a slight increase in real net income and household net worth, low levels of inflation and reduced gasoline prices.<\/p>\n

Rising Tides<\/strong><\/p>\n

As they say, \u201cA rising tide lifts all boats.\u201d As consumer spending has increased, freight levels have climbed and retailers are replenishing inventories. Consumers \u2013 the vital missing piece since the recession \u2013 have been the missing link, until now.<\/p>\n

The general freight pattern in 2014 was quite obvious. According to the report, freight shipment volume has been following a similar trend, year-over-year. It looks like a bell curve, rising in the middle and falling back to prior year\u2019s levels towards the end of the year.<\/p>\n

February of 2014 saw the trend begin to climb upward. Things continued getting better throughout the second quarter, with freight payments in April hitting a 15 year high. April shipment volume also reached its highest point since June of 2011.<\/p>\n

High Utilization<\/strong><\/p>\n

It\u2019s also important to note that during this time, trucking got ever closer to the 100 percent utilization mark. In 2014, truck capacity was extremely tight. The demand for spot-market truck capacity also ran high over the same period.<\/p>\n

Even more telling, May of last year saw freight payments come in 11.2% higher than during the same period in 2013. They were a whopping 77 percent higher than at the end of the recession in 2009.<\/p>\n

In what may be a surprise to some, rates held steady despite the tightening capacity. Both the number of total shipments and the amount of freight reached a height in June, with summer shipments even reaching pre-recession November 2007 levels.<\/p>\n\n\n\n
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In fact, during the first half of 2014, the freight sector was quite a bit stronger than many other parts of the economy. The report found that trucking increased 3 percent over the year. The intercity segment rose 2.7 percent and local segment 3.7 percent. Although the number of trucks overall declined, total truck tonnage increased by 3.5 percent.<\/p>\n

Shippers Beware<\/strong><\/p>\n

The data supports what many have been saying: Loads are heavier and there are more trailers at or near full capacity. Total freight payments rose less than the number of shipments, meaning rates were competitive over the year.<\/p>\n

While spot market prices moved up and down, an indication of intermittent capacity problems, rates did not rise as the traditional supply-and-demand model would indicate. Even so, there was a 2.5 percent increase in the cost per ton-mile basis. Conversely, on a cost-per-mile basis, there was a 2.1 percent decline.<\/p>\n

Although rates remained relatively flat, this doesn\u2019t mean shippers shouldn\u2019t beware. Trucking shortages allow carriers to be very selective in who they choose to do business with. As they attempt to recruit and retain truck drivers, trucking companies are interested in maximizing driver pay and satisfaction.<\/p>\n

Shippers who hold drivers for extended durations as they wait to load or unload will fall to the bottom of the line. Carriers are looking for maximum equipment utilization, faster turnaround times, and fewer empty trailers. Shippers who are able to work with carriers to accomplish this task will fare better than those who don\u2019t.<\/p>\n","protected":false},"excerpt":{"rendered":"

It appears 2014 was the best year for the supply chain since the recession ended. The transportation sector grew by 3.6 percent over the course of the year. The primary growth driver was not higher rates, but rather stronger shipment volumes. Even so, the truck driver shortage continues to be a thorn in the side … Read moreThe State of Logistics<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"yoast_head":"\nThe State of Logistics - Quick Transport Solutions Trucking Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/quicktransportsolutions.com\/blog\/the-state-of-logistics\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The State of Logistics - Quick Transport Solutions Trucking Blog\" \/>\n<meta property=\"og:description\" content=\"It appears 2014 was the best year for the supply chain since the recession ended. 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