Logistics Costs Alter Inventory Strategies

img src="/sites/default/files/images/articles/printeditiontag_new.gif" width=120 align=right>After years of trying to control distribution costs by negotiating ever-lower freight rates and cutting inventory levels, many shippers may be facing a new reality.

Logistics costs, measured against shippers' sales, have trended upward since 1998, according to some analysts. That's because shippers are placing new demands on trucking and logistics companies to move goods in an increasingly complex, constantly changing distribution environment.

Also, inventory has expanded, as many shippers stockpile more goods in response to competitive pressures and, ironically, attempt to shift from trucking to slower, lower-cost transportation alternatives.