newsworthy
Keeping costs under control
key focus for 2013
EXHIBIT 1
War on costs continues
AS SHIPPERS WRESTLE WITH TIGHT BUDGETS IN THE COMing year, they’ll most likely turn to shipment consolidation and rate
renegotiation to rein in costs, according to DC VELOCITY’S annual
Outlook survey.
Forty-two percent of the DC VELOCITY readers who took part in the
latest survey said they planned to consolidate more of their shipments into full truckloads, while 36 percent said they intended to
renegotiate rates this year. Also ranking high on the list of planned
cost-cutting moves were scaling back on express shipments ( 32 percent), automating more work processes ( 31 percent), and taking control of more inbound freight ( 26 percent). (See Exhibit 1.)
The annual survey asks readers about their outlook for the U.S.
economy as well as their plans for buying logistics services and material handling products in the year ahead. A total of 333 DC VELOCITY
readers responded to the online poll, which was conducted in
November following the presidential election.
Respondents were fairly evenly spread across industry sectors. The
majority, about 31 percent, came from manufacturing. Another 26
percent were distributors, 12 percent
were retailers, and
23 percent were service providers, such as third-party logistics compa-
nies. Eight percent fell into the “other” category.
Although they use a variety of cost-control techniques, DCV readers look first to shipment consolidation and carrier rate renegotiation.
Cost-cutting action of respondents*
Consolidate more shipments into truckloads 42
Renegotiate rates with carriers 36
Cut back on express shipments 32
Automate work processes 31
More inbound freight control 26
Redesign supply chain network 23
Cut back on shipping frequency to customers 19
Use fewer carriers 15
Use more rail in place of truck 13
Lay off workers 12
*Note: Survey respondents were allowed to select more than one response.
MARGINAL OPTIMISM
DC VELOCITY readers were divided in their opinions about the U.S. economy’s
2013 growth prospects. About 37 percent said they were optimistic, 34 percent
were pessimistic, and 29 percent were unsure.
About 79 percent of respondents said growth would be either weak or flat in
2013. Only 16 percent expected strong growth, while 5 percent had no
opinion. About 81 percent of respondents are concerned that oil
prices will rise in 2013.
As has been the case in past surveys, respondents held a
rosier view of their own companies’ prospects than they did
about business conditions at large. Thirty-five percent predicted their companies’ sales would rise in 2013, while 33
percent expected revenues to remain flat. Another 23 percent said company sales would be weak, and 9 percent said
they didn’t know what trajectory sales would take.
SPENDING PLANS FOR THE YEAR AHEAD
Respondents expect to maintain—or even increase—their
spending on logistics-related services and products in 2013. Forty-one percent said their spending on logistics services and material
handling equipment would be on par with 2012 levels, while 40
percent expect to spend more. Of those companies that p. 22
