Researchers from logistics and supply chain schools said the Logistics Manager’s Index report shows the logistics industry is continuing its slow, steady expansion as the overall index increases for its ninth consecutive month.
The Logistics Manager’s Index, an aggregate of logistics metrics, was released Tuesday and found that growth is increasing at an increasing rate for inventory levels, inventory costs, warehousing capacity, warehousing prices, transportation capacity and transportation utilization. However, the index found that growth is increasing at a decreasing rate for warehousing utilization and transportation prices. The Logistics Manager’s Index reads at 56.4, down slightly from July’s 56.5.
Overall the index has increased for nine consecutive months. Officials said the overall index has remained consistent for the past four months as the industry continues its slow, steady expansion.
The biggest mover in the index was inventory levels, which are up to 55.7, breaking its three month contraction streak. This shows that firms are building back up their inventories in anticipation of the fourth quarter of the year, a return to traditional seasonality patterns not seen since the COVID-19 pandemic.
The report, issued by researchers at Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University, and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals (CSCMP), also noted that warehousing capacity and transportation capacity were up. Transportation capacity is up as smaller carriers and owner-operators have gotten off the sidelines due to price increases in seven of the last eight months. Still those prices aren’t anywhere near the highs of 2020-2021, researchers said. Warehousing capacity increase at least in part because of downstream inventory levels continuing to decrease. As a result, downstream capacity is increase at a significantly faster rate than upstream. Warehousing prices are still up, the researchers said, with more of the cost increases coming from downstream respondents, the index showed.
A combination of eight unique components that make up the logistics industry the LMI is calculated to summarize growth or shrinkage in the logistics industry. Researchers said the slow steady growth of the LMI mirrors the overall growth in the U.S. economy in many ways. Researchers said the next 12 months is likely to see continued expansion.