Logistics Industry Managing the Downturn

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Logistics

The transportation market, like everything else,  is down at the moment. But how much down and for how long? Most of our clients keep tabs on truck costs but few of us find time to keep intimately up to date with developments day to day. Perhaps it would be useful to take a look at what is happening in today’s logistics market and where we think costs are likely to trend over this year.

Clearly haulage is directly impacted by business activity; as such it could be taken as one of a few general measures of business trends. It is interesting to see therefore how the following table illustrates the extent of the downturn and where the impact has been greatest.

After consistent years of growth since the early part of the decade averaging some 4%, the industry dropped back sharply over the last 6 months. Interestingly though these figures, courtesy of Logistics Mangement.com include the fuel costs which dropped dramatically in the second half. Consequently actual underlying rates have dropped very little. In addition, rates are still only a little below the benchmark figure twelve months ago although Q1 costs are expected to drop by a further 4.1%. The projection for 2009 is a 6.2% decline as reduced business activity continues to weigh on capacity.

–Stuart Burns

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