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The state of logistics in 2008


December 19, 2008
by Deborah Aarts

Toronto—Canadian supply chain managers have a new set of benchmarks for the way they do business. In November, SCL Canada, Industry Canada and Canadian Manufacturers and Exporters (CME) formally released “State of Logistics: The Canadian Report 2008,” a document drafted to help shippers understand the current state of their industry and to present data to better forecast the future.

The authors drew on Statistics Canada data and applied unique economic models developed by Industry Canada. SCL president Bob Armstrong told a capacity crowd at the report’s launch in Toronto—the first of several such events across the country—that the methodology of the report truly sets it apart. “This is a much deeper report than just a questionnaire that went out to people,” Armstrong said.

According to the report, Canadian companies have increased their spending on distribution facilities by more than 60 per cent since 2001. The results also reveal some surprising habits that set Canadian companies apart from those in the US.

Across the board, Canuck shippers spend more on supply chain and logistics than Americans. Canada’s total supply chain management and logistics costs, as a percentage of sales, are 12 per cent higher than those of their US counterparts, according to the report. In the retail sector, the split difference is 30 per cent.

On the outsourcing front, shippers in the US use third-party logistics providers (3PLs) 50 per cent more than they do in Canada. According to Armstrong, the report gives Canadian supply chain managers a means to measure how they compare to their colleagues, both south of the border and domestic.

“We’re very proud of the fact that this is the first assessment of Canada’s state of logistics and supply chain management because as Canadians, we’ve always read the American one every year,” he said. “We felt it was time to have one of our own. Times have changed, and we need to be controlling our own destiny here in Canada.”

The report also highlighted milestones and significant achievements in the Canadian supply chain field.

For example, between 2005 and 2007, manufacturers were able to contain higher logistics and supply chain management costs, despite the increase in oil prices and the burgeoning trend to rely on low cost country sourcing.