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March’s reading was a departure from this trend, as this is the lowest overall reading for the index since August of 2024, an official release said.
The contraction in the overall index was driven by a sharp decline in all three of the price/cost metrics.
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.
The LMI score is a combination of eight unique components that make up the US logistics industry: inventory levels and costs; warehousing capacity, utilisation and prices; and transportation capacity, utilisation and prices.
The score is calculated using a diffusion index, in which any reading above 50 indicates that logistics is expanding; a reading below 50 is indicative of a shrinking logistics industry.
In January, all three metrics were up significantly, with all three of them reading in above 70 for the first time since 2022. This trajectory continued into February for inventory costs and warehousing prices.
Many of those shifts reversed in March, with inventory costs (minus 6.7 to 70.6), warehousing prices (minus 16 to 61) and transportation prices (minus 9 to 56.4) all down significantly.
This suggests that supply chains revved up in February and early March to bring goods in, but have slowed in more recent weeks as more trade controls have been implemented.
Logistics costs in February were high, so if the inventory costs and warehousing prices stay where they are now and don’t go down it may represent stabilisation, further contraction could be an issue though.
It is a different story for transportation prices, which fell significantly in the second half of the month from 60.5 in early March to 51.1 (close to no expansion) later in the month.
This reading of 51.1 was lower than transportation capacity’s late-March reading of 54.9, indicating a slight freight inversion at the end of the month.
Fibre2Fashion News Desk (DS)