Logistics growth holds steady in October, states new edition of LMI

Logistics sector growth remained intact in October, according to the new edition of the Logistics’ Managers Index (LMI), which was recently released.

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 October LMI reading came in at 57.4 (a reading above 50 indicates growth is occurring) for the second consecutive month, matching the September reading. This represents the eighth straight month the LMI has been below the all-time overall average of 61.4.

“The lack of movement in the overall index is the result of cross-pressures from downward movements in inventories and warehousing metrics, counteracted by upward pressures in transportation metrics,” the LMI stated.

Key sub-index readings in the October LMI included:

• Inventory Levels fell 5.6%, to 49.5;
• Warehousing Utilization fell 8.8%, to 56.5, which LMI called, “a much slower expansionary rate;’
• Transportation Prices increased 7.5%, to 61.7;
• Transportation Capacity was down 0.7%, to 54.5 (the report said the upward swing in Transportation Prices combined with the slight downtick in the expansion of available Transportation Capacity broke thew two-month trend of a negative freight inversion); and
• Transportation Utilization headed up 7.3%, to 57.3, with LMI saying that was a “marked shift from the reading of 50.0 and no movement” in September

“This is similar to the dynamics observed in the Fall of 2018, when Upstream B2B freight slowed down to U.S. tariffs on Chinese imports but B2C movements remained steady due to strong U.S. consumer activity,” the LMI noted. “The strong downstream activity led to steady growth in the freight market through the end of 2018. We did, however, eventually see a slowdown in early 2019, after holiday spending had concluded. It will be interesting to observe whether similar dynamics play out in 2026.

That being said, based on October’s readings it seems likely that the transportation market is likely to remain strong—at least Downstream—through 2025. Taken altogether it seems likely that inventories are dropping as holiday sales begin, easing the prior tightness in warehousing and leading to a greater utilization of transportation due to the increased movement of goods. Essentially, supply chains have gone from being somewhat static and weighted down by inventory, to moving in a more dynamic, seasonally consistent manner.”

Addressing the differences in inventories now compared to other years following the pandemic, the report said that in other years inventories often saw a peak in mid-October, followed by a gradual decline paced by holiday season consumer spending. But it was a different scenario this year, with inventories pulled ahead earlier to avoid tariffs and subsequently peaking earlier than usual.

“This month’s readings seem to show some return to normalcy however, as there is evidence that inventories are being moved toward retail consumers,” the report said. “The first point of evidence here is that Inventory Levels shifted (-5.6) to contraction at 49.5, suggesting that holiday shopping has commenced. Inventory Levels contracted early in the month at the robust rate of 39.1, which is likely indicative of what had been huge stores of goods finally being run down.”