Economic activity in the logistics industry expanded in July, marking the eighth straight month of moderate growth across warehousing and transportation markets, according to the latest monthly Logistics Managers Index (LMI) report, released this week.
The July LMI was 56.5, up 1.2 points from June’s reading and in line with growth levels reported since January. The LMI is a monthly report that measures economic activity across warehousing and transportation markets; a reading above 50 indicates expansion across the industry and a reading below 50 indicates contraction. July’s reading was well above year-ago levels, when the index reached its lowest point in eight years, but well below the high growth levels experienced in 2021 and 2022. The LMI contracted for the first time in its eight-year history last year—in May, June, July, and November—indicating softer demand for warehousing and transportation services overall. Since December 2023, however, the index has rebounded to more subdued growth levels. LMI researchers credited a recovery in transportation markets alongside mixed conditions in warehousing for the results. “This is the eleventh of twelve and [the] eighth consecutive reading of expansion for the overall index,” the LMI researchers wrote in the monthly report, published August 6. “Like last month, this reading was largely a function of positive movements in the transportation market contrasting with a moderate contraction in inventories and slowing rates of expansion in the warehousing market.” Inventory levels contracted for the third straight month in July, while transportation capacity, utilization, and pricing all expanded at increasing rates. In particular, the transportation prices index exceeded transportation capacity for the third straight month, suggesting that the end of the freight recession may be in sight. “We have now had a full quarter of Transportation Prices coming in above Transportation Capacity. It is highly likely that the freight recession has ended,” the researchers wrote. “There could be potential headwinds from a slowdown in imports or a black swan event; but absent those, and if current trends continue and seasonality holds, it is likely that the recession that has gripped the freight industry is moving toward its conclusion.” The LMI is a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
