November Logistics Manager’s Index shows continued growth, reflecting consistent expansion

Logistics sector momentum continues to remain on the right path, with the November 2024 edition of the Logistics Manager’s Index (LMI) growing for the 12^th consecutive month.

The monthly LMI is a joint project among researchers from Arizona State University, Colorado State University, University of Nevada, Reno, Florida Atlantic University, and Rutgers University, and also receives support by Council of Supply Management Professionals (CSCMP). CSCMP. The LMI is written by Zac Rogers Ph.D., Steven Carnovale Ph.D., Shen Yeniyurt Ph.D., Ron Lembke Ph.D., and Dale Rogers Ph.D.

The report’s authors explained that the LMI score, or reading, is based on eight “unique components” within the logistics sector, including: inventory levels and costs, warehousing capacity, utilization and prices and transportation capacity, utilization, and prices.

The November LMI score came in at 58.4, which is off 0.5% from October’s 58.9, the fastest monthly rate of expansion going back to September 2022—and the 12^th month of expansion since a 49.4 reading in November 2023. The September LMI score was 58.6, with growth over the last three months viewed as “highly consistent,” the report stated.

Dale Rogers in the report:

“This consistency is further evidence for the thesis that the logistics industry has been expanding at a steady, sustainable pace. There is clearly some nervousness about the potential for tariffs and that is covered in this month’s report. Hopefully, the tariffs being threatened is just a negotiating tactic and not something that will be real. That could create damage to the U.S. economy.”

Key highlights in the November LMI, according to the report’s authors, focused on what they called the predicted slowdown in Inventory Levels, falling 3.3% to 56.1, which they said was in line with normal patterns of seasonality.

And they added that the slowdown in the build of inventory “trickled down to a slowing expansion” in Warehousing Utilization (-4.0 to 58.9) and Transportation Prices (-0.3 to 63.8), as well as increases in both Warehousing (+0.8 to 56.7) and Transportation (+1.7 to 52.6) Capacity. What’s more, the report cited increasing rates of expansion in Inventory Costs (+2.9 to 68.8) and Warehousing Prices (+0.8 to 68.8), the two fastest rates of expansion in the November LMI.

The report continues:

“Taken together this shows that inventory is moving through supply chains to retailers and onto customers. Overall Inventory Levels are lower because there is less inventory in the system than there was in October, but costs are higher because a greater percentage of the inventory that remains is being held by retailers where costs are often higher due to their location closer to consumers.”

The LMI also made the case that the steady growth it has seen reflects the dynamics in the U.S. economy, in terms of gains in consumer spending in October, U.S. wages growing faster than inflation for roughly two years and reflected in spending levels. It explained that this represents a continuation of overall growth the U.S. economy saw in the third quarter, with GDP at 2.8%, off from 3% in the second quarter, albeit still growing at a healthy level.

The difference in logistics market conditions, especially when compared to a year ago, highlights the growth thesis seen throughout 2024.

Stated the report:

“This year-over-year shift epitomizes what we have seen throughout 2024. Whereas in 2023 the logistics industry was still in the grips of the freight recession caused by a combination of high inflation and excess inventories, in 2024 we have seen a return to normal patterns of seasonality. This normalization has led to the most month-to-month predictability of any year in the 2020’s (a decade which is now nearly halfway over) which has in turn led to a pattern of slow and steady growth over the past 12 months.”