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Lombard, IL — The logistics industry took a particularly hard hit over the past year, according to the 2009 State of Logistics Report released by the Council of Supply Chain Management Professionals (CSCMP). The recession has wreaked havoc with many of the companies that provide transportation and warehousing services to manufacturers, with more than 3,000 trucking companies alone going out of business in 2008, eliminating 7% of the available capacity on U.S. highways. The only bright spot to this decline, at least for manufacturers, is that after rising more than 50% during the previous five years, the cost of logistics actually dropped 3.5% in 2008. The unfortunate reason for this decline is the simple fact that industrial production fell 7.8% in 2008, and thus manufacturers had less freight in the supply chain.

"The fallout from the bankruptcies of Chrysler and General Motors will reverberate through the economy for the remainder of this year," says transportation consultant Rosalyn Wilson, author of the report. The immediate impact of auto plant closures began this summer, and the trickledown effect is now spreading throughout the entire supply chain, she notes. "Even when consumer and industrial spending start to rebound, there is considerable slack in the system that will need to be used up before new production and orders are placed." The eventual good news, though, is that "supply chains are being redefined and processes changed so that the industry will emerge more efficient and resilient."

Read the full story at IndustryWeek.com.

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