While everyone keeps looking for some positive sign that the U.S. economy has turned the curve and is heading for better times, findings in the 23rd annual State of Logistics Report, compiled by the Council of Supply Chain Management Professionals (CSCMP), depict a more somber environment. Released at the National Press Club in Washington, DC on June 15, the report states that the fast paced recovery everyone has been waiting for has failed to materialize and most economists feel the country is in for a slow recover for the long haul. It further points out that Congress has failed to pass a transportation budget bill, as the industry operated under another continuing resolution. “It looks unlikely that anything will happen before the election,” stated Rosalyn Wilson, author of CSCMP’s logistics report, before a full room of attendees. “No matter when or what form the budget is agreed to, expect lower expenditures from the federal government for transportation infrastructure. That’s because if you read any of the bills, none offer any dramatic increase.” The report summarizes that the U.S. recovery is dependent on our trading partners. It states: “Their immediate prognosis is not good. Our exports have slowed in the last several months and probably will not pick up again soon.” Of course, the European Union debt crisis remains tenuous, and China’s hot economy is now slowing down. Of particular note, the report warns that capacity issues are on the horizon. “I urge everyone to begin making contingency plans for the day you cannot get a truck,” Wilson states. “The railroads are standing by with a great offer and have the capacity to take up the slack.” The bottom line: shippers will increasingly face problems on how to move freight. That’s because the trucking industry is compressing. There will be fewer trucks, fewer drivers, and more trucking companies operating leaner fleets. “Furthermore, the owner-operator trucking industry is going away,” she states. Increasingly an issue with trucking firms is the issue of finding qualified drivers. The American Trucking Association reports that for 2011 the driver turnover rate at large truckload companies was 83 percent, the highest it had been since 2007 when it was 117 percent. Unremarkable Year While the CSCMP report refers to 2011 as a rather “unremarkable year”, it does add that the economy improved in more areas than it retreated in over the year. However, the manufacturing sector of the economy has been in expansion mode for over 27 consecutive months but just barely as measured by Institute of Supply Management. Still excess capacity remains a major issue for the ocean shipping sector and load factors, due to unused capacity, have been unfavorable for the air cargo sector. While 2010 indicated a strong recovery for ocean shipping, 2011 saw the segment erode. Peak season did not materialize because a lagging mid-year economy did not support stocking up for holiday sales. Lack of business and lower rates led several carriers in the Transpacific trade to suspend some services during the slack winter months or leave a market entirely. By late 2011, the number of idled container ships worldwide roughly doubled to 246, or 4 percent of global container ship fleet capacity. Consequently, U.S. ports did not experience the robust expansion in cargo volumes they experienced in 2010. Air freight revenue declined 2 percent in 2011 with over capacity leading to bad load factors. This dropped domestic air freight revenue ton-miles by over 3 percent. International air freight cargo, however, was a record $400 billion dollars in export goods transported by air. But this was not enough to prevent a decline in international ton-miles, which fell just under 1 percent in 2011. A bright spot, freight forwarders recorded the second largest increase of 9 percent over 2010 levels, primarily on the strength of third party logistics providers (3PLs). “The 3PL.sector has complet