specialreport
BY JAMES A. COOKE, EDITOR AT LARGE
ready for recovery
Respondents to our 2010 Outlook Survey are guardedly optimistic about the economy.
MANY ECONOMISTS ARE TELLING US THE RECESSION IS OVER, AND WALL STREET SEEMS TO
concur. But what about those in the trenches? What do the nation’s distribution professionals see for the
U.S. economy in 2010?
Although the results of DC VELOCITY’S 2010 Outlook survey were somewhat mixed, the poll revealed a
generally upbeat attitude among readers. A narrow majority of the respondents— 56 percent—said they
were optimistic the economy would pick up steam. Another 24 percent said they remained pessimistic, and
20 percent indicated they were unsure which direction the economy would take.
The online poll was conducted in the second half of October, as the Dow Jones industrial average flirted
with the 10,000 mark. A total of 267 readers filled out the questionnaire. The majority of the respondents
worked for manufacturers ( 31 percent) or distributors ( 30 percent). The remainder worked for logistics
service providers ( 19 percent), retailers ( 10 percent), or other types of businesses ( 10 percent).
Despite the generally upbeat mood, few of the survey respondents expect the economy to come roaring
back. Only 15 percent said that overall U.S. economic growth would be strong in 2010. Another 47 percent
predicted weak growth, while 36 percent said business would be flat. Two percent declined to speculate.
When the respondents were asked about their own company’s revenue projections for 2010, the outlook
was a bit better. A full 25 percent foresaw strong sales growth, and 29 percent said they expected at least weak
growth. Another 39 percent predicted that sales would be flat, while 7 percent said they were unsure about
their company’s revenue projections.
Pickup in spending
Given concerns about tepid sales, it’s probably no surprise that companies are being conservative in their
budgeting. When asked about their spending plans for 2010, only 30 percent of the survey
respondents said they expected to spend more on logistics products and services than they
did in 2009. Most of the respondents— 44 percent—projected that their expenditures
would stay the same, while 16 percent anticipated a drop. Ten percent said they weren’t
sure how their 2010 spending would stack up against 2009’s.
Judging from the survey responses, any increases in logistics-related spending are
likely to be modest. Of those respondents who plan to up their spending in 2010, the
majority— 56 percent—said they expected their expenditures to increase by 3 to 5
percent over 2009 levels. About 16 percent said their spending would grow by just 1
or 2 percent, while 12 percent said they planned to increase their outlays by 5 to 9
percent. A few of the respondents were more bullish, however. Sixteen percent projected that their spending would jump by more than 10 percent.
When asked specifically about their plans for buying transportation services, 35 percent
of all respondents said their 2010 expenditures would increase over 2009 levels. About 39 per-
cent said their spending would remain the same, and 13 percent expected a decrease. Another 13 per-
cent said they weren’t sure.
As for what kinds of transportation services they plan to buy in 2010, the biggest share of the respon-
dents— 69 percent—said they expected to purchase less-than-truckload (LTL) freight service. That was
followed by small-package service ( 65 percent) and truckload service ( 57 percent). (See Exhibit 1.)
