When the Market Recovers, Will You Have Logistics Capacity?

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A recent article in Industry Week, which noted that logistics [is] on a bumpy road to recovery, had a scary statistic: 7% of the available capacity on US highways was eliminated last year as more than 3,000 trucking companies went out of business. And many more have went belly up since the year began. While the stats are not yet known, I’d estimate that over 10% of 2007 capacity has disappeared. When you consider that the capacity was almost fully utilized, this is not a good thing, as rail only gets you to a rail yard, not to your DC or the store.

And while you should definitely be using more rail, as this could significantly lower your (domestic) fuel usage and shipping costs, you still need the trucks for the “last mile”. Thus, you should be analyzing the state of your carriers now, their capacities, and locking in guarantees before they become scarce when the economy turns around again. Otherwise, you might see a large spike in your logistics costs again which would hurt your chances of a quick recovery.