US Logistics Costs Top 10% of GDP

The 2007 numbers are in and, at $1.397 trillion, US logistics costs are now just above 10% of the country's gross domestic product (GDP). Rosalyn Wilson released the 19th Annual State of Logistics Report, sponsored by the Council of Supply Chain Management Professionals (CSCMP). In the report, she broke down the logistics costs incurred in the US during 2007. By mode, motor carriage still leads spending at $671 billion, 48% of the total and 79% of transport costs.

Carrying costs on business inventories reached $487 billion (based on $2.026 trillion in business inventories).

Taken together, the nearly $1.4 trillion in logistics spending accounted for 10.1% of the US GDP, up from 9.9% in 2006 and matching 1998. In the years between, only 2000 registered a figure above 10%. Total spending as a percentage of GDP showed a steady decline from 1998 to 2003 (except for the 2000 figure of 10.3%), reaching a low in the period of 8.6% before beginning to rise again.

Total business inventories rose 8.7% in 2007 and a further 3.7% in the first quarter of 2008, said Wilson. And though commercial paper rates (interest) were flat in 2007, their level was at a five-year high of just over 5% after touching 1% through part of 2003 and 2004.

On transport costs, Wilson pointed out that motor carriage costs for shippers rose 6.1% in 2007, slightly lower than other modes, which gained 6.7% in the period.

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