In spite of a slight move down, the November Logistics Managers' Index (LMI) maintained expansion for the twelfth straight month. The overall figure came in at 58.4, off 0.5 from October's two-year high, but still firmly expanding.
The biggest risers last month were Inventory Costs and Warehousing Prices, which came in with identical increases of 2.9 to maintain identical figures of 68.8 - the highest components of the index. Inversely, Inventory Levels fell 3.3 to 56.1, and Warehousing Utilization was off four points to 58.9.
Authors say these movements all tie together - showing inventory is healthily moving along supply chains from producers to retailers to consumers during the holiday shopping season. There is less inventory because it's being purchased, but that inventory costs more to store and stage because retailers are locating it ready to sell, closer to consumers.
Transportation Prices ticked slightly down 0.3 to 63.8, while Transportation Capacity grew 1.7 to 52.6. Those metrics still maintained a solid gap of 11.2, though it did narrow a bit. That follows authors' theory that some capacity is coming back online as prices rise. Notably, capacity rose only in the first half of the month, and actually was in contraction territory (below 50) for the final third of November.
Transportation Utilization deserves a spotlight as well. It was up a small amount (0.8), but that gain put it above 60 (at 60.5) for the first time since it reached its two-year high 13 months ago. The increased utilization - especially since downstream firms had a handy lead in the metric - again suggests inventory is moving heavily toward retailers for the season.
While study author Zac Rogers last month on our podcast told us the LMI pattern indicates we're in the midst of a healthy recovery, there are potential pitfalls including port labor issues on the East and Gulf Coasts and tariffs - plus the response to those potential tariffs by affected countries and companies.
Still, the future outlook among logistics pros responding to the survey remains optimistic - though a bit less so than last month. Respondents expect the index to read in at 63.6 a year from now, a solid figure above the LMI's all-time average of 61.7 - but down 2.1 from October's 12-month out prediction. Industry experts see high prices/costs in Warehousing, Transportation and Inventory, but also expanding capacity to handle all three areas.
See the summary of the November 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 November 2024.
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