The index has been remarkably consistent, reading in at 55.6, 55.3, 56.5 and 56.4 over the last four months as the logistics industry has continued its slow, steady expansion, an official release from the agency said.

Researchers at Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University, University of Nevada, Reno, and the Council of Supply Chain Management Professionals (CSCMP) issued the LMI report recently.

August inventory levels, which were up by 6.1 points to 55.7, broke the streak of contraction that was observed over the previous three months. This suggests that after running inventories down, firms are building them back up again in anticipation of the fourth quarter (Q4) this year, the release noted.

This also suggests a return to traditional patterns of seasonality that have not been seen since pre-COVID times.

This build-up of inventories is somewhat tempered by increases in both warehousing capacity (plus 5 points) and transportation capacity (plus 5.8 points).

Transportation prices read in at 61.6, implying prices have increased in seven of the last eight months as well as in the last four consecutively. The prices are still nowhere near the highs of 2020-2021, but it is a marked shift from the 18 consecutive months of contraction from July 2022 till December 2023.

The signs of new life in the freight market, along with anticipation of the traditional jump in demand that follows the Labour Day holiday, are likely causing some of the capacity that had been sidelined over the past two years to re-enter the market, accounting for the mild increase in available capacity, the release said.

Warehousing capacity increased in the month, at least partly because downstream inventory levels were still decreasing at 46.3. Warehousing prices were still up (plus 2.8) to 63.1, with more of the cost increase coming from downstream respondents. 

Respondents continued to be largely optimistic about the future of the logistics industry, predicting an overall growth rate of 62.4 which is up slightly (plus 0.4) from July’s future prediction of 62 and is 7 points higher than the current reading of 55.4.

The LMI score is a combination of eight unique components that make up the logistics industry, including: inventory levels and costs, warehousing capacity, utilisation and prices, and transportation capacity, utilisation and prices. Any reading above 50 indicates that logistics is expanding; a reading below that is indicative of a shrinking logistics industry.

Fibre2Fashion News Desk (DS)