Analysis of Us Logistics Environment

Indian Institute of Management, Lucknow

Projetc

Report

on

Analysis of US Logistics Environment

Submitted by

Avichal Agarwal PGP21014

Kunal Tayal PGP21127

Manu Airan PGP22025

TABLE OF CONTENTS

US Economy Overview: 3

Industry Overview : 4

Industry Snapshot 5

Infrastructure Snapshot 5

Road 6

Rail 6

Air 6

Water 6

Industry in 2005: 7

Trucking 7

Ocean 8

Rail/Intermodal 8

Air 8

Market Analysis : 8

UPS: 9

CHRW : 11

EGL, Inc 15

FedEX: 18

Ryder : 20

DHL 23

BAX GLOBAL 25

CNF (Conway) 30

CATERPILLAR LOGISTICS LTD. 32

Schneider 33

PENSKE LOGISTICS 36

References: 38

US Economy Overview:

The US has the largest and most technologically powerful economy in the world, with a per capita GDP of $42,000. In this market-oriented economy, private individuals and business firms make most of the decisions, and the federal and state governments buy needed goods and services predominantly in the private marketplace. US business firms enjoy greater flexibility than their counterparts in Western Europe and Japan in decisions to expand capital plant, to lay off surplus workers, and to develop new products. At the same time, they face higher barriers to enter their rivals' home markets than foreign firms face entering US markets.

The onrush of technology largely explains the gradual development of a "two-tier labor market" in which those at the bottom lack the education and the professional/technical skills of those at the top and, more and more, fail to get comparable pay raises, health insurance coverage, and other benefits. Since 1975, practically all the gains in household income have gone to the top 20% of households. The rise in GDP in 2004 and 2005 was undergirded by substantial gains in labor productivity. Hurricane Katrina caused extensive damage in the Gulf Coast region in August 2005, but had a small impact on overall GDP growth for the year.

Soaring oil prices in 2005 and 2006 threatened inflation and unemployment, yet the economy continued to grow through mid-2006. Imported oil accounts for about two-thirds of US consumption. Long-term problems include inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging population, sizable trade and budget deficits, and stagnation of family income in the lower economic groups.

o GDP (purchasing power parity): $12.31 trillion (2005 est.)

o GDP - real growth rate: $3.2% (2005 est.)

o GDP - per capita (PPP): $41,600 (2005 est.)

o GDP - composition by setc

or:

­ agriculture: 1%

industry: 20.4%

services: 78.7%

o Industrial production growth rate: 3.2% (2005 est.)

o Exports: $927.5 billion f.o.b. (2005 est.)

o Imports: $1.727 trillion f.o.b. (2005