Supply Chain Management: Analyst Says Ocean Shippers Will Not See Softer Rates

Rosalyn Wilson, a transportation consultant for Delcan Corporation, provided SCMR with an exclusive interview on the eve of the release of The 21st Annual "State of Logistics Report," noting that disruptions in ocean carrier deployments has had dire consequences for shippers.

"The past couple of years have been very hard for vessel operators," she said. "Given the weak demand for goods, they canceled orders for new buildings, and scrapped a lot of existing capacity. Now that the global economy is improving, there are too few boxes for shippers to find in every regional market."

The annual benchmark report released yesterday shows the continued impact of the economic slowdown on the U.S. logistics industry. Released by the Council of Supply Chain Management Professionals (CSCMP) and presented by Penske Logistics, it reveals that total U.S. logistics costs dropped again last year showing a significant decrease from 2008.

"While this trend is likely to continue," warned Wilson,  "shippers should not expect to see ocean rates coming down. They are about as low as they can go now for carrier’s to conduct sustainable levels of service."

The report, authored by Wilson, shows the continued impact of the economic slowdown on the U.S. logistics industry. Overall, indicators show improvements in the fourth quarter with a focus on future direction.

"The economy is beginning to recover, and although time will tell how the logistics sector deals with the recovery, those companies that use the statistics and industry insight contained in this report will be better prepared for the business activity ahead," said Rick Blasgen, CSCMP President and CEO.

"This research presents data for company leaders to be able capitalize to on the recovery as it occurs, such as restructuring their distribution networks to maximize efficiency and minimize miles, investing in technologies to facilitate ‘green’ transportation, and improving real-time data flows to increase visibility and enhance productivity."

SC
MR