Logistics in the United States

The United States is not just one of the world’s largest countries. It is also considered the home of logistics. The huge territory is tightly linked by an extremely high-performance rail network - as well as being optimally connected by an excellent air-traffic system. The exceptionally well-developed logistics market in the United States has a variety of logistics centers located in strategically excellent places. The most important long-range trend in logistics is considered to be the constant advances being achieved in speed, service, flexibility and area development.

Transport hubs in the United States

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Geographic challenges in the United States

In terms of territory, the United States is one of the world’s largest countries. Its landscape is full of variety. It has low mountain ranges on the East Coast, mangrove forests in subtropical Florida, the Mississippi and Missouri rivers, and the towering Rocky Mountains. In addition, the Mid-West has sweeping plains, the Southwest deserts and the Northwest temperate rain forests. Added to this are the arctic tundra of Alaska and the tropical isles of Hawaii. The population is concentrated primarily on the West and East coasts and around the Great Lakes.

Core countries for trade

Logistics in the United States is characterized by the strong presence of international providers. Many major international companies are active in the market and operate local branches. The most important trade partners are Canada, China, Mexico, Japan and Germany [1].

U.S. infrastructure

The networking of regional markets in the United States is generally very good. One key contributor to this is the good condition of highway connections between rural and metropolitan areas: The trucking industry is key to the logistics success within the United States . The U.S. freight-train system is considered one of the world’s most capable. With considerably less density than Germany and Europe, the rail system in the United States transports four times the combined total of goods moved by all of western Europe’s rail companies. The United States is also the leader in air transport: No other region of the world moves so many passengers and so much freight. The international connections offered by American airports are exemplary with a number of them offering direct connections to global air hubs. The most important waterways include the Great Lakes and St. Lawrence seaway system and the Mississippi-Missouri rivers [2].

Logistic requirements and service areas

In recent years, the robust economy has given a long-term boost to the transport sector. In this context, the most important trends are constant advances in speed, service, flexibility and area development. Other long-range changes in U.S. logistics are related to the effort to cut transport costs.
In globalization Globalization , the container Container as a means of transport is playing an increasingly important role. At the same time, the significance of intermodal-goods transports, with which containers that have arrived by sea are distributed on land, is expanding. As a result, increasing numbers of multimodal connections and terminals are being set up - even away from metropolitan centers. Recently, though, logistics costs in the United States have begun to climb. The share of logistics costs in GDP has risen to 9.9 percent, the highest level since the turn of the millennium. The major cost drivers include increasing spending for transport and storage. These increases are being triggered by factors such as rising interest rates and higher storage by shippers Shipper . In addition, larger safety stocks are being created as a form of protection from uncertain delivery times Delivery time and supply disruptions. Large retailers are increasingly turning over the tasks of warehousing Warehousing and deliveries to retail outlets to suppliers instead of erecting large regional distribution centers. As a result, suppliers have to set up local warehouses and make deliveries to businesses more frequently. While storage in retailing rose by only 2.8 percent in 2005, it climbed 9.5 percent among wholesalers.
The significance of contract logistics Contract logistics in the United States is comparable to that of other highly developed industrial countries. Given the great distances and the high delivery demands of customers, extensive distribution know-how is needed. Warehouse processes and inbound transport chains Transport chain must be constantly optimized in order to cut costs and meet customers’ specific requirements. The aim of many companies in the United States is to lower costs and raise the service level for the end customer by outsourcing Outsourcing contract logistics. For instance, a contract logistics provider optimized the delivery of pay-TV receivers for a customer. As a result, delivery can be done anywhere in the country within 72 hours. This means the equipment reaches the customer faster than before.
The mail market in the United States is the world’s largest and was liberalized 30 years ago. Delivery remains in a single hand only for the last mile, a fact that distinguishes this market from the mail markets of other industrial countries.
The parcel market is also the world’s largest in terms of revenue volume. For this reason, it is highly competitive [2].

Logistics centers in the United States

One of the largest industry and transshipping centers in the United States is located in the strategically favorable city of Wilmington, Ohio. This is also the site of DHL Express’ main hub. It has excellent connections to Columbus, Cincinnati, Dayton und Toledo as well as to Chicago, Illinois; Indianapolis, Indiana; and the motor city of Detroit, Michigan.
Other important logistics centers are located on the coasts in Los Angeles and San Francisco as well as in New York and Savannah. In the county’s interior, the airports in Louisville and Memphis are particularly important, serving as the homes of major parcel service providers [2].

Important logistics service providers

The largest contract-service providers in the United States are DHL, UPS, BAX, Ryder System and Caterpillar Logistics Services. DHL is the leading contract-logistics provider in the United States, according to a ranking by Armstrong & Associates [2].

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References

[1] The World Fact Book | Central Intelligence Agency 2007
[2] USA | Gutzat 2007. In: Transport und Logistik | Bundesagentur für Außenwirtschaft (Hrsg.)