CSCMP's Supply Chain Quarterly
December 14, 2019
Forward Thinking

Logistics sector growth slows in August

Comment
Business activity remains strong, though researchers point to slowing freight markets as transportation prices continue to fall.

Business activity in the logistics sector grew in August, although at a slower pace compared with July, according to the latest Logistics Manager's Index (LMI) Report, released this week.

Researchers said the LMI registered 56.6 during the month, down slightly from July's reading of 57.2, but still above the 50-point mark indicating growth in the sector. 

The group's transportation metrics continued to signal a shift in the market, researchers said. Transportation prices declined for the third time in four months and remained well below year-ago levels, registering 48.9 compared with a reading of 92.7 a year ago. Combined with an increase in transportation capacity—which was up more than 26 points compared to year-ago levels—the findings point to a continued slowdown in freight markets, the researchers said.

The August LMI also showed an increase in warehouse prices which, although up sequentially, are still down sharply form year-ago levels. Warehouse capacity remained steady during the month. Inventory levels were down nearly 8% compared to July—to a reading of 59.6, indicating that although companies are still adding inventory, they are doing so at a slower pace than in July and historically, the researchers said.

The LMI tracks logistics industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released each month by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.


Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter : Logistics sector growth slows in August"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.