An economic recovery is taking hold in the logistics industry but some long-standing issues – like the Panama Canal – linger.

By Joel Kranc

By all accounts and economic indicators, the U.S. economy grew more than expected in the second quarter with higher GDP and private employers maintaining an increased pace of hiring. A recovery with some momentum has been building and this can be seen in the logistics and supply chain industries as well.

A recent “Logistics Market Snapshot” produced by the Georgia Center for Innovation and Logistics, shows that growth is occurring in all sectors. For example, orders for capital goods increased 1.5 percent in May – a third consecutive increase; intermodal rail is expected to grow an average of 5.1 percent a year until 2018 and slow moderately to 4.8 percent through 2024; trucking companies may have to hire 60,000 additional drivers in the second half of 2013 and import volume through major U.S. container ports is expected to rise.

“You see growth in all sectors because they are all connected,” says Page Siplon, executive director of the Georgia Center. “When I think about supply chain and logistics, I think of them as an ecosystem and everyone is interconnected. So as we see growth in supply chain and logistics, it is relatively uniform,” he explains.

The numbers do not reflect a “blip” and show a somewhat sustained recovery says Siplon. “When looking at the numbers, we see logistics and supply chain at a higher level and as a pretty good leading indicator.” As a result, adds Siplon, companies are using the data to predict inventory levels more broadly. While the recovery itself has momentum it is still a bit slow due to the extreme nature of how bad the past recession was, he says.

Specific logistics areas such as intermodal, for example, have been particular bright spots for the industry. Siplon says companies are starting to realize that moving product takes more than just one method. “Companies realize that they just can’t use trucks to get the best service and delivery logistics model supply chain that works for their customers. They need to have a mixed mode,” he says.

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