Logistics, truck firms fret over economy, fuel

By Nick Carey

CHICAGO (Reuters) - High fuel costs and uncertainty over the U.S. economy's outlook are among the top concerns of logistics and U.S. trucking companies, according to two surveys released on Monday.

In a survey of chief executives from 39 of the world's top third-party logistics providers sponsored by Penske Logistics, CEOs said their biggest concerns in the U.S. market include a tough pricing environment, the slowing economy, pressure from customers to cut costs, and high fuel prices.

"The financial crisis is clearly having an impact on the sectors where these companies do business," said Robert Lieb, professor of supply chain management at Northeastern University, who has been compiling this survey since 1990.

The economy and fuel costs did not figure in the surveys as a concern for either 2006 or 2007. Survey respondents included the logistics units of United Parcel Service Inc (UPS.N: Quote, Profile, Research, Stock Buzz), Ryder System Inc (R.N: Quote, Profile, Research, Stock Buzz), Landstar System Inc (LSTR.O: Quote, Profile, Research, Stock Buzz), Con-way Inc (CNW.N: Quote, Profile, Research, Stock Buzz) and YRC Worldwide Inc (YRCW.O: Quote, Profile, Research, Stock Buzz).

Lieb said that the retail, automotive and electronics sectors provide the majority of the business for third-party logistics companies.

Auto sales in the United States have dipped this year to 15-year lows, while according to the U.S. Commerce Department, consumer spending was flat in August and few if any economists are expecting a happy holiday shopping season.

"If those sectors don't see any improvement soon, this will have a significant impact on logistics providers," Lieb said.

Lieb added that survey respondents said CEOs of third-party logistics companies -- to whom large corporations outsource their transportation and logistics operations -- reported that customers are becoming more interested in lower costs than quality of service.

"There is not much value placed on value being delivered rather than cost reduction," Lieb said.

In a separate survey of more than 5,000 trucking sector executives from the American Transportation Research Institute (ATRI) -- a non-profit group funded by the trucking industry -- ranked fuel as most critical issue facing trucking companies.

Executives said the state of the U.S. economy was the second most critical issue facing the industry.