November Logistics Managers' Index: Holiday Shopping Still Strong, Freight Prices Stay Low

Freight prices are at an all-time Logistics Managers' Index low while inventory levels have moderated thanks to continued holiday shopping by consumers according to the November LMI. The overall Logistics Managers' Index reading is 53.6 for last month, dropping 3.9 from October and only higher than the LMI's all-time low recorded in April 2020 during pandemic-related lockdowns. Maintaining a level above 50 does indicate continued moderate growth, which is still largely supported by the Warehousing and Inventory components of the measurement. Speaking of Inventory levels, they had been soaring this year but dropped significantly to 54.8 last month - from 65.5 in October. The reason according to this month's report is likely holiday shopping, as more goods are positioned downstream for Christmas - products which are still being purchased despite some questions heading into the season. Case in point: the National Retail Federation is predicting holiday sales will jump 6-8% from last year's season. Inventory Costs & Levels as well as Warehousing Prices & Utilization components are all growing - though at a decreasing rate - again largely accounting for the LMI's moderate growth. Diving further into the freight market, Transportation Capacity continues to grow as well, though its index figure dropped 1.7 to 71.4 off of last month's all time high. That combined with now flat Transportation Utilization - the first non-growth month since May 2020 - means there's a clear slowdown in activity. In turn, Transportation Prices have contracted to their lowest level ever measured by the Index, at 37.4 in November (down 4.8 from the previous month). Finally, Warehouse Capacity is also continuing to contract meaning space continues to be scarce. This metric has contracted for 27 straight months.

By the Numbers

See the summary of the November 2022 Logistics Managers' Index, by the numbers:

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 November 2022.

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