This more subdued level of growth is attributable to the third consecutive month of contraction in inventory levels at 49.5.

This is a far cry from July 2023, when the overall index read in at 45.4—its lowest score in the eight-year history of the LMI, an official release noted.

In June, inventory levels actually increased upstream (54.7), but contracted downstream (40). This suggests that retailers are keeping inventories lean at the start of the third quarter (Q3) this year, while manufacturers, wholesalers and distributors are building up goods in anticipation of increased demand later in the year.

Despite the dip in overall inventories, transportation continued its recovery, with transportation prices up by 2.8 points to 63.8—the highest reading since May 2022.

Transportation capacity did expand slightly at 50.9—up by 0.9 points from June’s reading of no change.

Transportation prices read in 12.9 points higher than transportation capacity, which is the biggest gap since April 2022. It also marks three consecutive months the prices have exceeded capacity. This has happened due to a combination of excess capacity contraction and increasing demand due to imports and growth in manufacturing.

Respondents’ responses suggest the freight recession is potentially ending, the release said.

Warehousing also remained strong in July. Warehousing utilisation was up by 5.3 points to a more robust expansion of 57.9, and warehousing prices read in at 60.9, extending its run of readings above 60.0 to 56 consecutive months. 

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) issued this LMI report.

Fibre2Fashion News Desk (DS)