Wednesday, September 12, 2007

Industry Forecast

I just read some interesting transportation industry stats and forecasts that I thought you’d enjoy pondering. These figures came from the Midwest Transportation Consortium presenter Jay Thompson, president of Transportation Business Associates. Growth projection in our industry is 100% in the next 20 years. Great news but also a daunting future to manage so do all you can to be prepared.

Transportation Overview
• Overall market is about 20% of US economy
• Breakdown $$: Highway - 75%; Rail - 10%;
Water - 5%; Air - 5%; Pipeline - 3%
• Breakdown Tonnage: Rail - 35%; Highway -
30%; Pipeline - 20%; Water - 15%
• Growth projections very positive
--100% in next 20 yrs.
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What Will Drive Growth…
• Driven in part by commodities (food, manufacturing, housing…)
• Weakening dollar helps (exports…)
• Capacity is an on-going issue (revenue & customer focus)
• Logistics / JIT focus will continue
• Intermodal is a major growth area
• Functional integration is key (just like with IT)
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Top Transportation Issues
• Revenue (lanes, pricing, surcharge…)
• Productivity (biggest impact on profits) – 1 to 3+
• People (largest overall cost) – 30%
• Equipment (largest fixed cost) – 15%
• Fuel (largest operating cost) – 20% normalized
• Risk Mitigation (insurance, compliance…) – 10%
• Government (taxes, emissions, etc.) – implied ½
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Tomorrow I’ll share how successful companies will adjust and use cutting edge technology to profit in the future.

Moving forward,

Jeff Roach
www.brooketraining.com

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