For the second straight month, the Logistics Managers' Index (LMI) saw a small decline, but for the 13th month in a row, it also remained in expansion territory. The December LMI was down 1.1 from November, coming in at the still comfortably expanding mark of 57.3.
Behind the slowdown is largely holiday seasonality, as Inventory Levels dropped 6.1 to an even 50 - representing no growth or contraction. LMI authors say behind the overall number is a tale of upstream versus downstream, with upstream loading up on imports due to port strike and tariff concerns, and downstream retailers clearing up products thanks to holiday shoppers. Related to levels declining, Inventory Costs fell even more steeply (-7.1) to 61.6.
On the flipside, Transportation Prices rose three points to reach their fastest rate of expansion since April 2022 at 66.8 - a figure that is also above the all-time average of 65. Authors suggest strong consumer sales have been a contributor to greater demand for goods movement - especially with December's record levels of ecommerce sales necessitating more expensive delivery options. Transportation Capacity ticked up only slightly (0.6) to 53.2, remaining well behind prices. And Transportation Utilization was flat at 60.5.
Warehousing Utilization saw the only other significant gain, going up 2.8 to 61.7 - perhaps related to those upstream imports. Warehousing Prices dropped back 0.8 to 68, while Warehousing Capacity was up just 0.2 to 56.9.
Looking ahead, logistics pros continued to be bullish about the state of the market in 12 months. The future index was up 2.2 from November, to 65.8, well above the all-time LMI average of 61.7. Inventory and warehousing metrics are expected to lead the way to this overall gain, with Transportation Prices staying robust as well.
Study authors see inflation as a continuing concern moving forward, as well as uncertainty about tariffs and their impact on trade. Labor supply in the warehousing sector is also noted as a worry for 2025. But one uncertainty removed from the equation is a potential port strike, which was just averted yesterday.
See the summary of the December 2024 Logistics Managers' Index, by the numbers:
Researchers at 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) - issue the report. The LMI score is a combination of eight unique components that make up the logistics industry, including: inventory levels and costs, warehousing capacity, utilization, and prices, and transportation capacity, utilization, and prices. The LMI is calculated using a diffusion index, in which any reading above 50.0 indicates that logistics is expanding; a reading below 50.0 is indicative of a shrinking logistics industry. The latest results of the LMI summarize the responses of supply chain professionals collected in December 2024.
Need assistance with your shipping operations? Request a quote with us, and we'll get back to you to discuss your unique needs. Go to our Freight Guides to learn more about everything freight and logistics. Additionally, visit our blog for information and updates on the freight industry. Or start with these links below: