<img alt="" src="https://secure.perk0mean.com/182585.png" style="display:none;">
Request a Quote



Transportation Prices Bounce Back in May Logistics Managers' Index

June 4, 2024 Kevin Baxter

LMI Cover Text

With plenty of signs to follow for freight market health, perhaps the one with the most interest among logistics pros is rates. And in a positive sign for the industry, May's Logistics Managers' Index (LMI) showed Transportation Prices making a significant jump. That metric - which had dropped into contraction the month prior - was up 13.7 and comfortably back into expansion at 57.8.

And in another positive for the market, prices actually jumped just ahead of Transportation Capacity, which fell four points to 57.3. Transportation Prices are at their highest mark since June 2022, and the lead over capacity suggests a move back toward supply and demand equilibrium. But LMI authors caution we've seen this story happen a couple times before in the past half year in a one-off scenario, and consistency is the key to the end of the freight recession.

Overall, the May LMI came in at 55.6, up 2.7 from April and keeping the index in expansion for the ninth time in the last 10 months (and six months straight). In fact, eight of nine metrics are currently expanding.

The other biggest positive mover last month was Warehousing Utilization, which rose 8.9 to 64. Warehousing Capacity (+1.5 to 55.6) and Warehousing Prices (+1.2 to 64.9) also ticked up - with Amazon cited as a contributor to May's warehousing strength. 

On the flip side, Inventory Levels were the one metric that moved into contraction, going down 4.5 to 46.5. LMI authors suggest that the drop is tied to both high interest rates and tariffs, as well as continued strict just-in-time inventory policies.

As we say every month it seems, the industry continues to watch the Fed for signs of interest rate cuts - something that authors say will likely benefit logistics business overall. However whether one or more cuts occurs this year is still up in the air.

The future looked bright for respondents in May, as the projected LMI a year from now went up 2.8 from April, with an anticipated reading of 65.5. That's the highest 12-month-out prediction since two years ago. Authors say it's fueled by expected significant growth in Inventory Levels which would in turn lead to high figures for Inventory Costs, Warehousing Utilization, Warehousing Prices and, the biggie, Transportation Prices (with Transportation Capacity trailing far behind).

By the Numbers

See the summary of the May 2024 Logistics Managers' Index, by the numbers:

LMI At a Glance May 24

LMI Chart May 24

View Logistics Managers' Index - May 24

About the Logistics Managers' Index (LMI)

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 May 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: 

Talk To Us We're Here to Help

Share This: