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Trends in US logistics: will Australia follow?

Michael Barrett

As part of the Logistics Association of Australia Ltd. (LAA) Logistics Development Award, I recently attended the U.S. Council of Supply Chain Management Professionals (CSCMP) annual conference in Philadelphia USA. During the conference, much discussion by participants, various industry research papers and a number of seminars revolved around the issue of emerging US logistics trends and their future impact on the US logistics industry. After CSCMP, I travelled throughout the USA, interviewing a number of major importers, transport companies, transport brokers, shipping lines and US government agencies to further discuss these emerging US logistics trends.

The purpose of this article is to examine these emerging logistics trends and examine their effect or otherwise on the Australian logistics market in coming years. In every logistics segment, the major US logistics trends in the last two years have been significant and are described on the following pages.

Warehousing and transport

US inventory holdings amounted to 1.9 trillion in 2006, an all-time high. The ratio of inventory-to-sales stocks had been declining since 1992, however, this ratio is now beginning to reverse. Companies have begun holding increasing buffer stocks of inventory, seeking to maintain deliveries in the face of transport delays and segments of the US distribution system being at full capacity.

Large retailers like Wal-Mart, COSTCO, Best Buy etc., in an effort to increase profitability, have been pushing inventory back onto suppliers, requesting that greater stock levels be held by suppliers and the stock be held closer to the retailers

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