Logistics execs say worst of recession is behind us
UPS, FedEx execs paint rosier economic picture
Dave Hannon -- Purchasing, 6/26/2009 9:39:12 AM
If major logistics firms are in fact an economic bellwether for the U.S., as many suggest, then there are better days on the road ahead.
The heads of the two largest U.S. logistics firms-UPS and FedEx-both said this week they feel the worst of the economic recession is behind us and growth is just around the corner.
"I think the biggest declines are behind us and we should see a return to growth by the end of 2009," said Scott Davis, CEO of United Parcel Service at the National Summit last week in Detroit. "It will just take some time to work our way through this thing."
Davis also used his address
at the National Summit, which drew executives from a host of companies and
industrie
s to the Detroit Economic Club, to argue against protectionism as a
strategy to drive the U.S.
recovery and lobby for more investment in logistics infrastructure.
Davis described global trade as a "positive force" at a time when "we are operating without a map and without precedent. As many as 57 million Americans are working for companies engaged in global trade," Davis added. "One in every five manufacturing jobs is linked to exports of goods and services."
At the same time, Davis also said the "infrastructure of trading partners must be up to the demands that a new era of country cooperation and company connectivity will place on it. The U.S. is falling behind, and we're already paying a price. Our ports aren't deep enough; our inland waterway locks are functionally obsolete; our highways are jammed, and declining rail capacity is causing choke points across the country."
FedEx CEO Fred Smith took a similarly optimistic tone in the logistics giant's latest earnings call last week.
"While the severe global recession continues to throttle somewhat FedEx's growth we do see signs of stability as the rate of decline appears to have leveled off," Smith said. "We believe however the worst of the recession is likely behind us. We remain optimistic about a turnaround beginning later in calendar 2009 though corporate caution in managing inventory and spending could be a limiting factor and push it out a little bit later."
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