New BlueGrace Logistics Index highlights industry sentiment for Q3 inventories, revenues, and orders

The new edition of the BlueGrace Logistics Confidence Index, which was recently released by Tampa, Fla.-based non-asset-based 3PL BlueGrace Logistics, pointed to variation across some key metrics, including revenue, inventory levels, and order levels, with a forward-looking slant.

BlueGrace described this report as an important tool in measuring expected expansion or contraction within the logistics space. And it added that by analyzing revenue forecasts, inventory levels, and order volumes, it provides industry stakeholders with valuable insights into what to expect next quarter and how that reflects the freight market.

Data for the BlueGrace Logistics Confidence Index is aggregated through a survey of shippers and reflects all freight transportation modes, while correlating growth or shrinkage to overall industry volume of shipments and price of products, according to BlueGrace.  

One of the key findings in the Logistics Confidence Index highlighted how 62% of shipper respondents indicated that they expected revenue growth in the third quarter, down 4% from the second quarter reading, with 12% expecting neutral third quarter revenue growth, in line with the second quarter’s 13% reading, and 21% calling for negative revenue growth, which was 6% below 21% in the second quarter.

“Revenue growth projections for Q4 from our Q3 survey are likely to improve going into retail season,” Jason Lockard, SVP of Managed Logistics at BlueGrace, told LM. “Markets could be driven by increased consumer demand or increased sales/promotions to clear stagnant inventory, or both.”  

Looking at inventories, BlueGrace found that positive inventory sentiment stumbled from 57% in the second quarter to an anticipated 33% for the third quarter, with neutral inventory sentiment increasing from 30% to 53%, which it said indicates “a growing uncertainty.” And it found that negative inventory sentiment was flat, at 13%.

Lockard explained that sentiment and confidence indicate inventories are still high going into the third quarter, adding that the cost to get that product into customer networks was higher than normal.

“It’s likely to expect more of a conservative approach to inventory management for the remainder of 2023,” he said.

With inventory sentiment on the decline, BlueGrace said that positive order sentiment saw a slight rise, from 40% in the second quarter to 45% in the third quarter, with neutral order sentiment falling from 53% to 43%, for the same period, and negative order sentiment going from 7% to 11%.

When asked if these order sentiment readings are indicating that carriers and logistics services providers are still dealing with a low-demand environment, Lockard said that truckload volumes and rates are at or near the anticipated “bottom” however less-than-truckload (LTL), despite volumes being down year-over-year are not at critical levels and have held pricing and commodity standards in place.  

“There was a shift from truckload (TL) to LTL as overall over shipment size decreased in many supply chains,” he said.