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Less Consumer Spending Equals Uneven Economic Landscape

Less Consumer Spending Equals Uneven Economic Landscape

Consumers are not leading the charge as they have in other recoveries, because of the fragile state of the economy and their personal wealth.

That is according to the Council of Supply Chain Management Professionals (CSCMP) 22nd Annual State of Logistics Report® update that was presented today at the logistics industry trade association’s global conference being held in Philadelphia. The report is underwritten by Penske Logistics.

The report revealed that manufacturing and business spending were the bright spots during much of 2010, while consumer goods production was flat. Industrial production was up 5.3 percent in 2010, after declining 11.2 percent the year before.

The report also found that total logistics industry capacity has suffered during the economic downturn, with more than 16 percent of truck capacity permanently removed since 2006.

More than 3,000 trucking firms have declared bankruptcy in the last three years, a loss of 13 percent of industry capacity, according to Donald Broughton of Avondale Partners.

The report forecasts that driver pay will rise as companies work to attract and retain drivers. The truck freight volume is now rising faster than new drivers are being added to fleets.

The report concludes that the economy has hit a wall and the trucking industry continues to be one of the hardest hit segments and has been adapting.

“It has been close to two years since the recession was pronounced over and for many Americans and businesses things have not improved,” stated Rosalyn Wilson, report author and senior business analyst at Delcan Corporation.

“We could enter a recession again by early next year but with leaner inventories and no credit crises, we will not find ourselves in the same dire predicament as the previous recession,” she noted.

Wilson predicts that the longer the economic challenges last, the more it will strain the logistics industry.

To view the news release of the report that was originally issued in June, please click here.

By Sabrina Michaeli, Porter Novelli