Fast Facts on the Global Supply Chain

A huge industry

• The cost of logistics in the US was $1.183 billion in 2005; 9.5% of gross domestic product (GDP), according to CSCMP’s 2005 Annual State of Logistics Report.
• US expenditures on logistics are larger than the national GDP of all but 10 countries. (For example, US logistics expenditures are larger than the GDP of Russia.)
• US expenditures on freight transportation alone ($583 billion) are larger than the GDPs of all but 16 countries.
• Transportation-related workforce numbers add up to 11.3 million people (8.6% of the total US labor force), according to United States Department of Labor statistics.
• Total domestic business inventories are valued at $1.76 trillion, according to CSCMP’s 2006 Annual State of Logistics Report

The global trading village according to World Trade Organization statistics through 2004

• World merchandise exports have risen from $157 billion in 1963 to $8.907 trillion in 2004.
• The nations of the European Union lead the world in merchandise exports, accounting for $3.714 trillion in 2004 and representing 42% of all global merchandise exports. The US accounted for $819 billion, representing 9.2% of all global exports; China accounted for $593 billion, representing 6.7%; Japan accounted for $566 billion, representing 6.4% of all global exports.

US trade with China according to US-China Business Council Forecast 2006 Conference, January 25, 2006

• US trade with China in 1981 was $5.7 billion. In 2005, US/China trade was estimated at $286 billion, more than 50 times greater than in 1981.
• China has grown from the 15 th largest to the 4 th largest US goods export market, trailing only Canada, Mexico, and Japan. China is now the second largest supplier of US imports, trailing Canada. 
• The US trade deficit with China is likely to continue to grow because of long-term economic benefits to the US.

China on trade according to statistics from the Ministry of Commerce of the People's Republic of China

• In 2005, China imported $660 billion from its world neighbors, an increase of 17.6% over 2004, and exported $762 billion, an increase of 28.4% over 2004.
• Other Asian nations account for 66.9% of China's imports, and 48.1% of China's exports.
• China reported a 2005 trade surplus of $114 billion with the US and $70 billion with the European Union. (Note: US sources report the US trade deficit with China to be double that amount.)
• Significant investments are needed in China 's infrastructure and in its logistics industry. According to Professor Ju Songdong of Beijing Jiatong University, logistics services will have to grow 2.8% for every 1% increase in China 's GDP.

• In 1980, logistics represented 17.9% of US GDP. Today, it is 9.5%.
• By comparison, estimated logistics costs represent 22.3% of China 's GDP and 17% of India 's.
• Logistics costs in Europe are significantly lower due to a combination of less geography and long-established transportation infrastructure, including rail, rivers, and highways. Logistics costs represent 7.15% of European GDP on average.
• It is estimated that the total logistics costs associated with delivering a $3.60 box of cereal from the field to the consumer's table is about $.37 in the US. The net retail profit is about $.05.

US Logistics Infrastructure (2002/2003) according to the US Government Bureau of Transportation Statistics

Highways 3.97 million miles	Interstate motor carriers 674,000
Rail (Class I) 99,000 miles	Pipeline operators 2,000
Navigable channels 25,000 miles	Marine vessel companies 798
Pipelines 187,000 miles	Air carriers (major) 14
	Railroads (Class I) 7



• Approximately $1.5 billion of containerized shipments pass through US ports each day.
• 20% of all inbound US container shipments pass through the Port of Long Beach . All of which must pass through one traffic signal. When the light is red, up to 20% of all US container shipments come to a halt.

Supply chain's impact on company valuation

• According to a Georgia Tech study, a company's stock price can drop as much as 8% on the day a supply chain glitch is announced.
• A study by Dr. Thomas Speh of Miami University of Ohio showed that when a company adopts a new distribution or logistics innovation, the company's stock price increases.
• A study by Bain & Company showed that companies employing sophisticated supply chain methods enjoyed 12 times greater profit than companies with unsophisticated methods.
• Every organization is impacted by the supply chain. Every organization has one.

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