Sluggish but steady growth – which in turn should flatten out demand for transportation and logistics services – will continue to be the dominant pattern for both the global and U.S. economies for the foreseeable future, according to the findings of the 24th annual State of Logistics report released this week.

“Last year continued many of the same trends we have been experiencing since 2010: slow economic growth; unemployment levels remaining high; job creation weak and focused on lower quality jobs; plus freight volumes and rates that are inconsistent and rarely move in the same direction for more than a couple of months,” noted Rosalyn “Roz” Wilson, senior business analyst with Delcan Corp. and the report’s primary author.

“I believe that we are experiencing a ‘new order’ that is translating into the new way of life for the economy and the logistics and supply chain sectors for the foreseeable future,” Wilson stressed during a media event at the National Press Club this week. [To view photos from this event, click here.]

“The ‘new normal’ is characterized by slow [economic] growth with GDP [gross domestic product] growth hovering between 2.5% to 4%; higher unemployment levels and slower job creation,” she added.

Wilson’s outlook also includes higher healthcare costs for businesses that will in turn encourage extremely lean full-time staffs and a higher reliance on part-time workers who do not receive benefits. It also translates into less reliable or predictable freight service as volumes rise, with capacity not increasing fast enough to fully meet demand.

She also noted that 2013 is following a pattern similar to last two years: mixed economic signals and unbalanced performance.

“On the positive side, consumer confidence has been very high, with housing showing signs of stronger recovery with sales of new and existing homes picking up,” Wilson said. “More importantly, building permits – an indicator of future construction – increased to the highest level in four years. Automobile and small truck sales have also been strong for three years running, fueling strong import and export movements, with the Institute for Supply Management’s purchasing managers index (PMI) for manufacturing activity accelerating at its fastest pace in two years.”

Yet on the negative side, she said the sequester – resulting in government spending cuts and personnel furloughs – is dragging on economic growth, with growth also being held back this year by: the hike in payroll taxes; weak retail sales; high fuel prices; continued global economic decline; weak job growth and high unemployment; and rising operating costs for logistics providers.

The State of Logistics report – sponsored by the Council of Supply Chain Management Professionals (CSCMP) and presented by Penske Logistics – also revealed that total U.S. business logistics costs in 2012 jumped to $1.33 trillion, a 3.4% increase from the previous year, remaining at 8.5% of U.S. GDP.

Trucking, the largest component of transportation costs, posted a 2.9% increase, with the intercity truck segment rising 3.2% and the local delivery segment up 2.1%. Overall truck tonnage increased 2.3% percent in 2012, Wilson said, but noted that “uneven performance” is still the main pattern.

“The trucking sector has been in a delicate balance for several years now, just on the breach of experiencing capacity problems,” she explained. “Utilization rates are at all time highs with load volumes on the rise but new regulations are expected to take a bite out of industry productivity, especially the new hours of service (HOS) rules from the Federal Motor Carrier Safety Administration (FMCSA).”

Wilson said the new HOS rules – due to go into effect July 1 – represent a theoretical 17% reduction in a standard work week for truck drivers and estimates on their actual impact fall somewhere between a 2% to 10% productivity decrease.

She added that carriers are still reporting difficulty finding enough drivers, with the industry right now short about 30,000. “The HOS changes could have the effect of a net 2% to 5% reduction in driver capacity, so projecting that out arrives at the need for another 100,000 drivers,” Wilson warned. “That is without an increase in volume.”

However, truck drivers represent a job category with the fewest potential workers trained to fill them, she stressed, with only about 17% of the current driver population under age 35 and a far larger portion of the driver population reaching retirement age.

Still, despite all of those issues, panelist discussing the report’s findings proved more optimistic than not concerning the report’s findings.

“The U.S. is one of the few economies actually growing in the world,” stressed Kevin Smith, president and CEO of Sustainable Supply Chain Consulting and chairman of the panel. “Maybe it’s slow growth, but that’s preferable to a precipitous decline that’s a prelude to falling off a cliff.”

“We’re definitely seeing an increase in third party logistics activity this year,” added Marc Althen, president of Penske Logistics. “We saw reluctance on the part of shippers in 2012 but this year they are now making decisions, especially around transportation management services.”

Beth Ford, executive VP and chief supply chain officer for Land O’ Lakes, noted that her company witnessed a doubling of its food product and agricultural businesses over the last five years and expects that demand to only increase. “We echo the concerns expressed in the report about the domestic market, but we are seeing growth so we’re optimistic,” she said.

Paul Svindland, COO for Pacer International, added that even with the current weakness, the economy is still growing. “My feeling is one of cautious optimism; we're seeing positive economic signs,” he said.

Yet Stevan Bobb, executive VP and chief marketing officer for BNSF Railway, stressed that his optimism is being tempered by unequal performance within the various segments of the U.S. economy.

“Some segments of the U.S. economy are seeing growth, but the rest are muddling through,” he warned. “We see no real sustainable trends so our concern is to make sure we’ve got the right capacity at the right time for service; we have to stay in front of this.”

Delcan’s Wilson concluded, though, that if transportation and logistics providers adjust their business expectations to the economic conditions, they should do fine.

“I’m pretty satisfied with where we are but we must get our expectations in line with the conditions,” she said. “If you plan for slow, sustainable growth, you’ll be happy. But if you expect ‘gangbuster’ growth and demand, you’ll be disappointed.”