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Report: Logistics Industry Shows Signs of Recovery

A graphic of a freight truck

Transportation prices and warehouse utilization rose in the latest supply chain management report, signaling that the logistics industry could be making a comeback, according to researchers at 左爱视频 and four other schools.


By amber bonefont | 6/11/2024

Transportation prices and warehouse utilization rose in the latest supply chain management report, signaling that the logistics industry could be making a comeback, according to researchers at 左爱视频 and four other schools.

(LMI) was 55.6 in May, up 2.7 points from April鈥檚 score of 52.9. Seven out of the eight key metrics used to calculate the score saw expansion, while one of the metrics lagged, according to the report.听

鈥淭he growth in various segments of the logistics industry bodes well for availability and access to goods for consumers, consumers鈥 availability, and access to goods. This growth has been partially driven by an easing of congestion in the Panama Canal and along Red Sea shipping routes,鈥 said , Ph.D., an associate professor of supply chain management in the in the College of Business. 鈥淗owever, heightened transportation pricing could signal increased pricing in a few months鈥 time as retailers and manufacturers will likely pass these added costs downstream to consumers.鈥

The Logistics Managers鈥 Index Report, a survey of director-level and above supply chain executives, measures the expansion or contraction of the logistics industry using eight unique components: inventory levels, inventory costs, warehousing capacity, warehousing utilization, warehousing prices, transportation capacity, transportation utilization and transportation prices.

Along with 左爱视频, researchers at , , 听 and the calculate the LMI using a diffusion index. A score above 50 indicates that the logistics industry is expanding, while a score below 50 indicates that the industry is shrinking.

An uptick in warehouse utilization and transportation prices drove growth in May鈥檚 LMI score. Transportation prices increased 13.7 points from 44.1 to 57.8, the highest level since June 2022, while warehouse utilization scored a 64 in May, an 8.9-point increase. Researchers attributed this growth to confidence from downstream retailers looking to expand on their capabilities and demand.

鈥淭ransportation pricing is up along with increased warehousing capacity levels, signaling continued high levels of demand from retailers and on the consumer side. As the summer season starts, the increased capacity should allow for retailers to stock more inventory to maintain products on shelves for consumers when demand levels are at their highest outside of the pre-holiday rush,鈥 Carnovale said.

While the logistics industry has been struggling for the past two years, researchers noted that May鈥檚 growth suggests that the industry is on a gradual recovery.

鈥淲e are not quite ready to call an end to the freight recession that has been ongoing for the past two years,鈥 said , Ph.D., associate professor of supply chain management at Colorado State University. 鈥淏ut the past few readings suggest that the logistics industry is moving back toward growth, which would be a positive sign for the overall economy.鈥

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