FOR RELEASE: Tuesday, September 2nd, 2025
Contact:
Zac Rogers, Ph.D.
Logistics Manager’s Index Analyst
Associate Professor, Supply Chain Management
Department of Management
Colorado State University
Fort Collins, Colorado
(970) 491-0890
E-mail: [email protected]
http://www.the-lmi.com
Contact:
Zac Rogers, Ph.D.
Logistics Manager’s Index Analyst
Associate Professor, Supply Chain Management
Department of Management
Colorado State University
Fort Collins, Colorado
(970) 491-0890
E-mail: [email protected]
http://www.the-lmi.com
August 2025 Logistics Manager’s Index Report®
LMI® at 59.3
Growth is INCREASING AT AN INCREASING RATE for: Inventory Levels, Inventory Costs, Warehousing Utilization, Warehousing Prices, and Transportation Capacity
Growth is INCREASING AT A DECREASING RATE for: Warehousing Capacity, Transportation Utilization, and Transportation Prices.
LMI® at 59.3
Growth is INCREASING AT AN INCREASING RATE for: Inventory Levels, Inventory Costs, Warehousing Utilization, Warehousing Prices, and Transportation Capacity
Growth is INCREASING AT A DECREASING RATE for: Warehousing Capacity, Transportation Utilization, and Transportation Prices.
(Fort Collins, CO) — The August Logistics Manager’s Index reads in at 59.3, up very slightly (+0.1) from July’s reading of 59.2. The minimal overall movement is the product of counteracting forces at the sub-component level. The upward pressure comes from inventory and warehousing metrics. Inventory Level expansion is up (+2.7) to 58.2, which in turn is pushing up Inventory Costs (+7.3) to 79.2 and Warehousing Prices (+3.9) to 72.2. We also observe Warehousing Capacity expansion slowing (-0.6) to 50.5, which is just above the break-even of 50.0 and represents very marginal rates of expansion.
The downward pressure comes from our transportation metrics. We saw notable drops in both Transportation Prices (-6.9 to 56.1) and Transportation Utilization (-4.8 to 54.7). At the same time, available Transportation Capacity is up (+4.7) to 57.3. While these are not necessarily seismic shifts on their own, the fact that Transportation Capacity is now expanding faster than Transportation Prices is significant as it represents a mild negative freight inversion. This month’s inversion, along with movements in Transportation Capacity (blue line) and Transportation Prices (orange line) over the last nine years, are presented in the chart below:
The downward pressure comes from our transportation metrics. We saw notable drops in both Transportation Prices (-6.9 to 56.1) and Transportation Utilization (-4.8 to 54.7). At the same time, available Transportation Capacity is up (+4.7) to 57.3. While these are not necessarily seismic shifts on their own, the fact that Transportation Capacity is now expanding faster than Transportation Prices is significant as it represents a mild negative freight inversion. This month’s inversion, along with movements in Transportation Capacity (blue line) and Transportation Prices (orange line) over the last nine years, are presented in the chart below:
In the past, negative freight inversions have been associated with a move towards slowdowns in the transportation market. As is clear from the chart however, the August inversion is fairly mild (1.2-point difference) and it is only one reading. Traditionally, a move like this would need to go on for at least three months before we began to consider it an actual freight recession. It does however represent the continuation of a trend that we have been observing since January when Transportation Prices came in 17.7 points higher than available Transportation Capacity during the beginning of the big stock-up ahead of tariffs. Transportation Prices had been higher than Transportation Capacity in every reading since April of 2024, which marked the end of the previous freight recession. Up until January of this year, it seemed that freight metrics were trending up strongly, and that we might begin moving towards a strong expansionary period like those seen in 2017-2018 and 2020-2021. The fact that we have moved towards a negative inversion in August, at the start of what should normally be peak season, renders the chances of a boom market happening any time soon as fairly unlikely. Again, this does not mean that we will slide into a freight recession, and respondent future predictions actually point to that not happening. This is a marked shift however, and it will be critical to continue monitoring movements in these metrics as transportation often acts as a leading indicator for the overall economy.
Researchers at Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University, and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals (CSCMP) issued this report today.
Results Overview
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 August 2025.
The LMI read in at 59.3 in August, up marginally (+0.1) from July’s reading of 59.2. This is just below the all-time average of 61.5 for the overall index and represents a moderate rate of expansion. Continuing the trend we have observed over the last four months, logistics expansion is being disproportionately driven by smaller firms, who reported an overall index of 62.7, which is statistically significantly higher than the 58.2 that was reported by our larger respondents. This continued disparity is largely driven by higher inventories and tighter capacity for smaller firms. Interestingly however, the gulf that had existed between Upstream firms (60.1) and Downstream firms (62.7) in the overall index has disappeared, suggesting that more of the inventories that were built up in the first half of the year have begun matriculating down to the retail level in earnest.
However the inventories are allocated throughout the supply chain, it seems likely that most imports have arrived already. One potential signal that imports will slow down through the rest of the year is that Chinese factory output slowed in July. This comes despite their exports surging by 7.2% in the same month[1]. The read here seems to be that factories worked overtime to get goods out during the summer, but that orders have trailed off as we move into Q3. When combined with issues in real estate values and falling consumer spending, the world’s second-largest economy is expanding at a level far below their normal pace. Shipping analysts believe that, despite the uptick in inbound container volume in July, that overall U.S. container volumes will decline in the second half of the year, with the National Retail Federation predicting a 5.6% decrease in inbound volume for 2025. For this to come to pass, it would mean imports would need to be down by 17.5% through the last 5 months of the year[2].
This slowdown would be coming after what has been a roller coaster during the last few months. U.S. GDP growth was revised to 3.3% expansion in Q2 – up from the previous estimate of 3% growth. This shift is largely due to the “air pocket” in imports in April and early May. Imports were down by approximately $340 billion in Q2[3]. Other factors like consumer spending suggest that, if we remove the fluctuations in trade, there may be an underlying slowdown. These trade factors seem likely to change in Q3. The U.S. trade deficit for goods was up 22.1% to 103.6 billion in July. This effects of this spike could be seen in the Port of Los Angeles reported that July was the busiest month in their 117-year history[4]. That being said, imports through the Port of Los Angeles are clearly slowing down. The 89,311 TEUs schedule to come through the port in the first week of September represent an 18.81% dip from the same period a year before[5].
Recent analysis from Goldman Sachs suggests that U.S. businesses have borne the brunt of the tariffs, with only 22% being passed onto consumers through June. The report does warn that this could increase significantly (they specifically forecast 67%) by Q4 if trade policy does not soften[6]. The trade policy met further uncertainty at the end of the day on the last Friday of August (generally big tariff announcements seem to happen as we’re writing this report) when a federal appeals court ruled that President Trump have overstepped the authority of his office by labeling almost all of the new tariffs responses to national security emergencies. For the moment, this ruling is being held up until October 14th to give the Supreme Court a chance to hear an appeal. It is extremely unlikely that this ruling will eliminate all of the current tariffs, as well as unclear how it would impact trade deals the U.S. has already reached with places like the EU, Japan, or the Philippines[7]. Sector-specific tariffs on goods like steel, aluminum, or semiconductors are through to be more durables, as the authority to levy tariffs on specific industries comes from a different place than the ability to levy tariffs on specific countries[8].
The other big shift in trade policy in August was the closing of the de minimis exception. The de minimis exception that allowed imports under $800 to avoid tariffs and customs inspection was closed on the last Friday of August. The popularity of de minimis shipments had exploded in recent years, going from 139 million shipments in 2015 to 1.36 billion in 2024 (or approximately 4 million packages per day). This increase was largely driven by fast-fashion e-commerce platforms like Temu[9]. Unfortunately, it is also likely to impact small businesses that rely on international postal services. Due to the uncertainty surrounding the pullback of the de minimis exceptions, the national postal services of over 30 nations have temporarily suspended deliveries into the U.S. This list includes DHL the parcel arm of Germany’s post office and one of the largest LSPs in the world[10]. This will add cost and complexity to small and medium-sized businesses, with Marianne Rowden, CEO of the E-Merchants trade Council, estimating that SMEs will bear an additional $71 billion in costs due to this change[11]. It will be interesting to see the impact of this move on volumes coming through ports. In addition to tariffs, these packages will need to be inspected by customs agents. Even if de minimis shipments fall by 90%, there will still be an addition 136 million packages that customs agents must inspect and clear, potentially slowing operations at ports.
Uncertainty around tariffs continues to effect U.S. consumer sentiment, which was was down (-5.7%) in August to 58.2. This is down 14.3% from the same time a year ago. The decline was driven by a decrease in consumer demand for durable goods and more uncertainty around personal finances – both of which were driven by tariff news. It is also notable that consumers are expecting year-ahead of inflation of 4.8%, which is up from their prediction of a 4.5% increase in July[12]. Consumers note that they are likely to spend less on big-ticket items such as vacations or fancy dinners. It remains to be seen how spending will hold up on smaller, day-to-day items[13]. One challenge to that day-to-day spending is the ongoing trend of retailers – such as Best Buy, Walmart, Target, and Ace Hardware – that have recently announced that their prices will increase due to tariff costs[14].
Tariff-inspired price increases likely underlie the U.S. Personal Consumption Index (PCE) moving up 2.6% year-over-year in July, consistent with the increase in June. Costs have increased the most for goods such as furniture, appliances, and footwear, that are more exposed to tariffs[15]. It is possible that more increases are coming, as the Producer Price Index (PPI) which looks at costs at the wholesale level, were up 0.9% in July – up significantly from the predicted 0.2%. Those who played the Beer Game in their undergraduate supply chain classes will remember that wholesale costs are often forerunners of retail costs, so an increase in PPI in July could foreshadow further increases in the Consumer Price Index (CPI) in the second half of the year. This is the first time the PPI has been this high since the run of 10 readings above 0.9% from January 2021 to May of 2022[16], a period which in hindsight primed the pump for the inflation supply chains and consumers dealt with for most of 2022 and 2023. A single PPI reading above 0.9% is not an indicator of inflation on its own, but if this marks a shift towards an environment like we saw in 2021 and early 2022, it could be a different story.
Continued upstream and downstream inflation complicate matters for the Federal Reserve. When taken together with recent revisions to jobs reporting, the news that Americans applying for unemployment benefits was down in the last week of August suggests that the U.S. remains in what is being called a “no hire, no fire” economy. This is important for supply chains because slowness employment is the thing that is most likely to get the Fed to consider cutting interest rates – something that Chairman Jerome Powell hinted at during his speech in Jackson Hole this month[17]. It remains to be seen however whether or not continued inflation in the PPI and PCE could temper any potential rate cuts.
As mentioned above, it appears that inventories are now moving towards the downstream supply chain. After reporting contraction over the last few months, Downstream retailers reported Inventory Level expansion at 57.1, which is nearly level with the Upstream expansion of 58.1, and suggests that the high levels of inventory that entered the country over the course of the year are now more balanced throughout supply networks. This is reflected in overall Inventory Level expansion increasing (+2.7) to 58.2. It has been interesting to observe the different tactics that retailers are taking to navigate the tariffs while still meeting consumer demand. Retail sales were up 0.5% in July, which was double the increase from June[18]. In an effort to mitigate tariff-related increases, Walmart has announced plans to rationalize their product mix, bringing in higher volumes for sure-sellers and taking less risks with goods that consumers might not buy in bulk. This allows them to place orders earlier and also achieve quantity discounts. While Walmart and their supply chain partners have absorbed some of the price increases associated with tariffs, that is not a sustainable strategy. This inventory strategy shift may help them to avoid increasing prices for consumers too significantly (although they have stated that some price increases are coming)[19]. For the moment, large retailers like Walmart, Amazon, and other large retailers are taking market share from smaller rivals. They are able to do this by offering deals and lower prices. This is the outcome of the moves that larger firms made earlier in the year when they brought over large stocks of inventory ahead of tariff implementation. Smaller firms, which were largely unable to compete with larger[20] firms and therefore had difficulty executing this strategy, may not be able to offer competitive prices, since many of their goods came in after April 2nd. This is likely reflected in the higher Inventory Cost expansion reported by smaller firms, which at 83.7 is statistically significantly higher than the (still high) 72.2 reported by larger firms. It is worth noting that the difference that had existed between large and small firms on Inventory Level movements have evaporated, with large firms reporting expansion (55.6) only slightly lower than smaller firms (59.3). On the other end of the spectrum, discount retailers like TJ Maxx and Five Below have also performed well. Five Below reported that sales in the quarter ending in August were up 24% year-over-year. These increases were largely driven by the discount retailer’s focus on cheap back-to-school items aimed at families attempting to cut costs[21].
Virtually all of these tactics have been aimed at navigating increased costs. Inventory Costs were up (+7.3) in August to 79.2. Other than June’s reading of 80.2, this is the highest rate of expansion since October of 2022. Inventory Costs are up across the supply chain, coming in very high for Upstream (77.9) and Downstream (81.5) firms, for small (83.7) and larger (72.2) firms, and in both early (76.2) and late (81.4) August. Inventory Costs near 80.0 indicate extreme levels of expansion. As noted above, it is likely that some of these costs will be passed along to consumers in the near future. What the impact of that might be on retail sales in Q4, and then into 2026, remains to be seen.
Some of these costs come from the elevated costs of storage. Warehousing Capacity was down (-0.6) to 50.5, which is just above the breakeven level of 50.0. Warehousing Capacity actually contracted (49.1) later in August and contracted (48.7) for larger respondents as well. This has had the effect of driving Warehousing Utilization back up (+2.6) above 60.0 to 62.1. Some of this utilization and tightness in capacity is likely due to the shift we have seen towards certain types of facilities. The changes in trade policy are leading importers to lean more heavily on bonded warehouses and FTZs. Shipping directly to these facilities allow firms to delay paying tariffs on goods until they are sold to a customer[22]. This has been a particularly useful strategy for the goods that were pulled forward early, as tariff fees are generally due within 45 days of the official import. This allows firms to significantly improve their cash-to-cash cycle, generating free cashflow that can be utilized in more productive ways than holding onto inventories for six months. The availability of space has been a somewhat limiting factor. While there are 2,240 FTZs across all 50 states in the U.S., the space is not unlimited. This count includes the FTZs operated by automakers like Ford and GM, which they use to produce automobiles while delaying payment on tariffed components[23]. Automakers are also delaying payments through supply chain financing arrangements which allow them to extend payment terms. Wells Fargo reported that supply chain financing activity for auto parts is up 20% year-over-year, and up 10% overall[24]. BlackRock and Flexport will double their supply chain financing pool to $250 million to give importers more flexibility on when they pay off their tariffs (fees are generally due within 45 days of import)[25]. Additional financing options are made even more important due to the continued expansion of Warehousing Prices, which are up (+3.9) to 72.2. Prices are expanding back over 70.0 for the fourth time in 2025, which is notable because it never happened even once in 2024.
Of course, the other major source of expansion in the industrial real estate space are data centers. Capital goods orders were up in July, which suggests that some firms – such as Boeing – are looking to increase their U.S. manufacturing operations[26]. It is also likely that some of these capital expenditures are in the service of the ongoing buildout of data centers, which will total $600 billion in the U.S. in 2025 and could eventually result in $7 trillion of new buildouts by the end of the decade[27]. In what might be a pivotal shift, spending on data center construction exceeded spending on office construction for the first time in 2025[28]. This building frenzy is providing a significant boost to the industrial real estate and construction industries. It might also be behind the 101.4% year-over-year increase in flatbed load to truck ratio, as the movement of construction materials soaks up capacity[29].
Transportation has been in an interesting place throughout 2025. As mentioned above, freight seemed to be on an upswing in the second half of 2024 and into January of this year. It then settled into a state of consistent, if unspectacular growth through the next six months, averaging expansion of 62.1, with every reading from April to July falling somewhere between 62.0 and 63.1. This streak of consistence changed in August as Transportation Prices dropped (-6.9) to 56.1. This drop was driven by Upstream firms, who reported very anemic expansion at 51.5. Downstream firms, who began the process of moving holiday inventories down the supply chain in earnest this month, buoyed that number somewhat with a reading of 66.1. The drop came despite this is U.S. diesel prices reading in at $3.708 per gallon in the last week of August, which is almost even (+$0.057) from last week[30].
It seems unlikely that Upstream transportation will pick up in any significant way in the last few months of 2025 as Orders for containers inbound to the U.S. are down 20% over the past six weeks. This corroborates the idea put forth in last month’s report that July represented peak season for imports. Intermodal demand has been strong in 2025 – especially compared to trucking where tender volumes are down 15% year-over-year. Demand for intermodal freight could soften in the fall if inbound containers decline as much as is being predicted[31]. In fact, According to FreightWaves, just over 3,000 freight-related jobs were cut between July 18th and August 21st. The cuts come from a diverse array of LSPs spanning across several states (Mahoney, 2025). These cuts come as Transportation Capacity softens (+4.7) to 57.3, which is the highest rate of expansion for this metric since May of 2024, when the market was transitioning out of the 2022-2023 freight recession. As mentioned above, this is the first time that Transportation Capacity has grown faster than Transportation Prices – marking a negative freight inversion – since April of 2024. Transportation Utilization dropped (-4.8) as well, coming in at 54.7. This decline was driven by responses later in the month. Transportation Utilization read in at 61.5 early in the month, before dropping to 50.0 and no movement in the second part of August.
Respondents were asked to predict movement in the overall LMI and individual metrics 12 months from now. Respondent predictions for the overall index are 63.9, up (+1.3) from July’s future prediction of 62.6. This would represent a faster rate of growth than the all-time average of 61.5. A primary reason for this slowed down prediction are softer (--1.7) predictions regarding Inventory Level expansion, which came in at 55.0. Despite this, future predictions for Inventory Costs are up (+4.2) to 79.5. This may be partially explained by predictions of contraction for Warehousing Capacity (49.4), which will in turn lead to higher Warehousing Prices (75.3). Respondents are also predicting elevated freight activity, with Transportation Capacity (-4.7) expected to contract very mildly at 49.0, and Transportation Prices (-3.6) reading in at 71.9. It is also worth noting that cumulative costs are predicted to come in at 226.7, which could be slightly inflationary.
Researchers at Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University, and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals (CSCMP) issued this report today.
Results Overview
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 August 2025.
The LMI read in at 59.3 in August, up marginally (+0.1) from July’s reading of 59.2. This is just below the all-time average of 61.5 for the overall index and represents a moderate rate of expansion. Continuing the trend we have observed over the last four months, logistics expansion is being disproportionately driven by smaller firms, who reported an overall index of 62.7, which is statistically significantly higher than the 58.2 that was reported by our larger respondents. This continued disparity is largely driven by higher inventories and tighter capacity for smaller firms. Interestingly however, the gulf that had existed between Upstream firms (60.1) and Downstream firms (62.7) in the overall index has disappeared, suggesting that more of the inventories that were built up in the first half of the year have begun matriculating down to the retail level in earnest.
However the inventories are allocated throughout the supply chain, it seems likely that most imports have arrived already. One potential signal that imports will slow down through the rest of the year is that Chinese factory output slowed in July. This comes despite their exports surging by 7.2% in the same month[1]. The read here seems to be that factories worked overtime to get goods out during the summer, but that orders have trailed off as we move into Q3. When combined with issues in real estate values and falling consumer spending, the world’s second-largest economy is expanding at a level far below their normal pace. Shipping analysts believe that, despite the uptick in inbound container volume in July, that overall U.S. container volumes will decline in the second half of the year, with the National Retail Federation predicting a 5.6% decrease in inbound volume for 2025. For this to come to pass, it would mean imports would need to be down by 17.5% through the last 5 months of the year[2].
This slowdown would be coming after what has been a roller coaster during the last few months. U.S. GDP growth was revised to 3.3% expansion in Q2 – up from the previous estimate of 3% growth. This shift is largely due to the “air pocket” in imports in April and early May. Imports were down by approximately $340 billion in Q2[3]. Other factors like consumer spending suggest that, if we remove the fluctuations in trade, there may be an underlying slowdown. These trade factors seem likely to change in Q3. The U.S. trade deficit for goods was up 22.1% to 103.6 billion in July. This effects of this spike could be seen in the Port of Los Angeles reported that July was the busiest month in their 117-year history[4]. That being said, imports through the Port of Los Angeles are clearly slowing down. The 89,311 TEUs schedule to come through the port in the first week of September represent an 18.81% dip from the same period a year before[5].
Recent analysis from Goldman Sachs suggests that U.S. businesses have borne the brunt of the tariffs, with only 22% being passed onto consumers through June. The report does warn that this could increase significantly (they specifically forecast 67%) by Q4 if trade policy does not soften[6]. The trade policy met further uncertainty at the end of the day on the last Friday of August (generally big tariff announcements seem to happen as we’re writing this report) when a federal appeals court ruled that President Trump have overstepped the authority of his office by labeling almost all of the new tariffs responses to national security emergencies. For the moment, this ruling is being held up until October 14th to give the Supreme Court a chance to hear an appeal. It is extremely unlikely that this ruling will eliminate all of the current tariffs, as well as unclear how it would impact trade deals the U.S. has already reached with places like the EU, Japan, or the Philippines[7]. Sector-specific tariffs on goods like steel, aluminum, or semiconductors are through to be more durables, as the authority to levy tariffs on specific industries comes from a different place than the ability to levy tariffs on specific countries[8].
The other big shift in trade policy in August was the closing of the de minimis exception. The de minimis exception that allowed imports under $800 to avoid tariffs and customs inspection was closed on the last Friday of August. The popularity of de minimis shipments had exploded in recent years, going from 139 million shipments in 2015 to 1.36 billion in 2024 (or approximately 4 million packages per day). This increase was largely driven by fast-fashion e-commerce platforms like Temu[9]. Unfortunately, it is also likely to impact small businesses that rely on international postal services. Due to the uncertainty surrounding the pullback of the de minimis exceptions, the national postal services of over 30 nations have temporarily suspended deliveries into the U.S. This list includes DHL the parcel arm of Germany’s post office and one of the largest LSPs in the world[10]. This will add cost and complexity to small and medium-sized businesses, with Marianne Rowden, CEO of the E-Merchants trade Council, estimating that SMEs will bear an additional $71 billion in costs due to this change[11]. It will be interesting to see the impact of this move on volumes coming through ports. In addition to tariffs, these packages will need to be inspected by customs agents. Even if de minimis shipments fall by 90%, there will still be an addition 136 million packages that customs agents must inspect and clear, potentially slowing operations at ports.
Uncertainty around tariffs continues to effect U.S. consumer sentiment, which was was down (-5.7%) in August to 58.2. This is down 14.3% from the same time a year ago. The decline was driven by a decrease in consumer demand for durable goods and more uncertainty around personal finances – both of which were driven by tariff news. It is also notable that consumers are expecting year-ahead of inflation of 4.8%, which is up from their prediction of a 4.5% increase in July[12]. Consumers note that they are likely to spend less on big-ticket items such as vacations or fancy dinners. It remains to be seen how spending will hold up on smaller, day-to-day items[13]. One challenge to that day-to-day spending is the ongoing trend of retailers – such as Best Buy, Walmart, Target, and Ace Hardware – that have recently announced that their prices will increase due to tariff costs[14].
Tariff-inspired price increases likely underlie the U.S. Personal Consumption Index (PCE) moving up 2.6% year-over-year in July, consistent with the increase in June. Costs have increased the most for goods such as furniture, appliances, and footwear, that are more exposed to tariffs[15]. It is possible that more increases are coming, as the Producer Price Index (PPI) which looks at costs at the wholesale level, were up 0.9% in July – up significantly from the predicted 0.2%. Those who played the Beer Game in their undergraduate supply chain classes will remember that wholesale costs are often forerunners of retail costs, so an increase in PPI in July could foreshadow further increases in the Consumer Price Index (CPI) in the second half of the year. This is the first time the PPI has been this high since the run of 10 readings above 0.9% from January 2021 to May of 2022[16], a period which in hindsight primed the pump for the inflation supply chains and consumers dealt with for most of 2022 and 2023. A single PPI reading above 0.9% is not an indicator of inflation on its own, but if this marks a shift towards an environment like we saw in 2021 and early 2022, it could be a different story.
Continued upstream and downstream inflation complicate matters for the Federal Reserve. When taken together with recent revisions to jobs reporting, the news that Americans applying for unemployment benefits was down in the last week of August suggests that the U.S. remains in what is being called a “no hire, no fire” economy. This is important for supply chains because slowness employment is the thing that is most likely to get the Fed to consider cutting interest rates – something that Chairman Jerome Powell hinted at during his speech in Jackson Hole this month[17]. It remains to be seen however whether or not continued inflation in the PPI and PCE could temper any potential rate cuts.
As mentioned above, it appears that inventories are now moving towards the downstream supply chain. After reporting contraction over the last few months, Downstream retailers reported Inventory Level expansion at 57.1, which is nearly level with the Upstream expansion of 58.1, and suggests that the high levels of inventory that entered the country over the course of the year are now more balanced throughout supply networks. This is reflected in overall Inventory Level expansion increasing (+2.7) to 58.2. It has been interesting to observe the different tactics that retailers are taking to navigate the tariffs while still meeting consumer demand. Retail sales were up 0.5% in July, which was double the increase from June[18]. In an effort to mitigate tariff-related increases, Walmart has announced plans to rationalize their product mix, bringing in higher volumes for sure-sellers and taking less risks with goods that consumers might not buy in bulk. This allows them to place orders earlier and also achieve quantity discounts. While Walmart and their supply chain partners have absorbed some of the price increases associated with tariffs, that is not a sustainable strategy. This inventory strategy shift may help them to avoid increasing prices for consumers too significantly (although they have stated that some price increases are coming)[19]. For the moment, large retailers like Walmart, Amazon, and other large retailers are taking market share from smaller rivals. They are able to do this by offering deals and lower prices. This is the outcome of the moves that larger firms made earlier in the year when they brought over large stocks of inventory ahead of tariff implementation. Smaller firms, which were largely unable to compete with larger[20] firms and therefore had difficulty executing this strategy, may not be able to offer competitive prices, since many of their goods came in after April 2nd. This is likely reflected in the higher Inventory Cost expansion reported by smaller firms, which at 83.7 is statistically significantly higher than the (still high) 72.2 reported by larger firms. It is worth noting that the difference that had existed between large and small firms on Inventory Level movements have evaporated, with large firms reporting expansion (55.6) only slightly lower than smaller firms (59.3). On the other end of the spectrum, discount retailers like TJ Maxx and Five Below have also performed well. Five Below reported that sales in the quarter ending in August were up 24% year-over-year. These increases were largely driven by the discount retailer’s focus on cheap back-to-school items aimed at families attempting to cut costs[21].
Virtually all of these tactics have been aimed at navigating increased costs. Inventory Costs were up (+7.3) in August to 79.2. Other than June’s reading of 80.2, this is the highest rate of expansion since October of 2022. Inventory Costs are up across the supply chain, coming in very high for Upstream (77.9) and Downstream (81.5) firms, for small (83.7) and larger (72.2) firms, and in both early (76.2) and late (81.4) August. Inventory Costs near 80.0 indicate extreme levels of expansion. As noted above, it is likely that some of these costs will be passed along to consumers in the near future. What the impact of that might be on retail sales in Q4, and then into 2026, remains to be seen.
Some of these costs come from the elevated costs of storage. Warehousing Capacity was down (-0.6) to 50.5, which is just above the breakeven level of 50.0. Warehousing Capacity actually contracted (49.1) later in August and contracted (48.7) for larger respondents as well. This has had the effect of driving Warehousing Utilization back up (+2.6) above 60.0 to 62.1. Some of this utilization and tightness in capacity is likely due to the shift we have seen towards certain types of facilities. The changes in trade policy are leading importers to lean more heavily on bonded warehouses and FTZs. Shipping directly to these facilities allow firms to delay paying tariffs on goods until they are sold to a customer[22]. This has been a particularly useful strategy for the goods that were pulled forward early, as tariff fees are generally due within 45 days of the official import. This allows firms to significantly improve their cash-to-cash cycle, generating free cashflow that can be utilized in more productive ways than holding onto inventories for six months. The availability of space has been a somewhat limiting factor. While there are 2,240 FTZs across all 50 states in the U.S., the space is not unlimited. This count includes the FTZs operated by automakers like Ford and GM, which they use to produce automobiles while delaying payment on tariffed components[23]. Automakers are also delaying payments through supply chain financing arrangements which allow them to extend payment terms. Wells Fargo reported that supply chain financing activity for auto parts is up 20% year-over-year, and up 10% overall[24]. BlackRock and Flexport will double their supply chain financing pool to $250 million to give importers more flexibility on when they pay off their tariffs (fees are generally due within 45 days of import)[25]. Additional financing options are made even more important due to the continued expansion of Warehousing Prices, which are up (+3.9) to 72.2. Prices are expanding back over 70.0 for the fourth time in 2025, which is notable because it never happened even once in 2024.
Of course, the other major source of expansion in the industrial real estate space are data centers. Capital goods orders were up in July, which suggests that some firms – such as Boeing – are looking to increase their U.S. manufacturing operations[26]. It is also likely that some of these capital expenditures are in the service of the ongoing buildout of data centers, which will total $600 billion in the U.S. in 2025 and could eventually result in $7 trillion of new buildouts by the end of the decade[27]. In what might be a pivotal shift, spending on data center construction exceeded spending on office construction for the first time in 2025[28]. This building frenzy is providing a significant boost to the industrial real estate and construction industries. It might also be behind the 101.4% year-over-year increase in flatbed load to truck ratio, as the movement of construction materials soaks up capacity[29].
Transportation has been in an interesting place throughout 2025. As mentioned above, freight seemed to be on an upswing in the second half of 2024 and into January of this year. It then settled into a state of consistent, if unspectacular growth through the next six months, averaging expansion of 62.1, with every reading from April to July falling somewhere between 62.0 and 63.1. This streak of consistence changed in August as Transportation Prices dropped (-6.9) to 56.1. This drop was driven by Upstream firms, who reported very anemic expansion at 51.5. Downstream firms, who began the process of moving holiday inventories down the supply chain in earnest this month, buoyed that number somewhat with a reading of 66.1. The drop came despite this is U.S. diesel prices reading in at $3.708 per gallon in the last week of August, which is almost even (+$0.057) from last week[30].
It seems unlikely that Upstream transportation will pick up in any significant way in the last few months of 2025 as Orders for containers inbound to the U.S. are down 20% over the past six weeks. This corroborates the idea put forth in last month’s report that July represented peak season for imports. Intermodal demand has been strong in 2025 – especially compared to trucking where tender volumes are down 15% year-over-year. Demand for intermodal freight could soften in the fall if inbound containers decline as much as is being predicted[31]. In fact, According to FreightWaves, just over 3,000 freight-related jobs were cut between July 18th and August 21st. The cuts come from a diverse array of LSPs spanning across several states (Mahoney, 2025). These cuts come as Transportation Capacity softens (+4.7) to 57.3, which is the highest rate of expansion for this metric since May of 2024, when the market was transitioning out of the 2022-2023 freight recession. As mentioned above, this is the first time that Transportation Capacity has grown faster than Transportation Prices – marking a negative freight inversion – since April of 2024. Transportation Utilization dropped (-4.8) as well, coming in at 54.7. This decline was driven by responses later in the month. Transportation Utilization read in at 61.5 early in the month, before dropping to 50.0 and no movement in the second part of August.
Respondents were asked to predict movement in the overall LMI and individual metrics 12 months from now. Respondent predictions for the overall index are 63.9, up (+1.3) from July’s future prediction of 62.6. This would represent a faster rate of growth than the all-time average of 61.5. A primary reason for this slowed down prediction are softer (--1.7) predictions regarding Inventory Level expansion, which came in at 55.0. Despite this, future predictions for Inventory Costs are up (+4.2) to 79.5. This may be partially explained by predictions of contraction for Warehousing Capacity (49.4), which will in turn lead to higher Warehousing Prices (75.3). Respondents are also predicting elevated freight activity, with Transportation Capacity (-4.7) expected to contract very mildly at 49.0, and Transportation Prices (-3.6) reading in at 71.9. It is also worth noting that cumulative costs are predicted to come in at 226.7, which could be slightly inflationary.
We observe some differences when comparing feedback from Upstream (blue bars) and Downstream (orange bars) respondents in August. The most notable move however may be a lack of differences. For the past three readings Downstream Inventory Levels had contracted. That shifted in August, as Downstream retailers began stocking up at a rate of 57.1, only 0.9-points lower than Upstream’s expansion of 58.1. Warehousing Capacity is tight across the supply chain, but at 49.2 is contracting Upstream. Both Warehousing and Transportation Utilization showed significant differences in July, with Downstream firms reporting contraction (47.6) for the former and no movement (50.0) for the latter. That has shifted to expansion (59.3 for Warehousing Utilization and 51.8 for Transportation Utilization) in August and the statistical significance has disappeared. We also see that Transportation Prices are significantly higher Downstream (66.1) while they are on the verge of no movement (51.5) Upstream. Taken together this suggests that the long-anticipated shift of inventories from Upstream to Downstream has commenced, but it appears that the spread-out nature of this year’s peak season has left the freight market with and excess of capacity and lowered pricing.
We also split future predictions by Downstream respondents (purple bars) and Upstream respondents (green bars). Interestingly, there are no statistically significant differences between the two groups, which is a marked shift from July when 5 of our 8 metrics showed significant differences. Both sides of the supply chain are predicting modest expansion in Inventory Levels (53.3 Upstream and 57.1 Downstream) but intense increases in Inventory Costs (77.5 and 85.2) and Warehousing Prices (75.4 and 75.9). This seems to be a continuation of the potential signal that tariffs will make goods more expensive across the board, so inventories will come in more slowly than they have this year. That being said, both sides are predicting a positive freight inversion with contracting Transportation Capacity (48.5 Upstream, 46.4 Downstream) and robust Transportation Price expansion (72.8 Upstream, 69.8 Downstream). This suggests that one of the ways firms will fight increased costs is to turn inventories over quickly, which could lead to a higher utilization of the freight market.
Continuing the trend from July, we observe no significant statistical differences between responses that were collected early (gold bars) and late (green bars) in the month. The most notable difference in August is Warehousing Capacity moving from mild expansion (52.8) to mild contraction (49.1) in the second half of the month. The inventories that are soaking up that capacity seem to be relatively static, as Transportation Utilization dropped from expansion at 61.5 in early August, to no movement at 50.0 in the second half of the month.
Continuing the trend from July, we observe no significant statistical differences between responses that were collected early (gold bars) and late (green bars) in the month. The most notable difference in August is Warehousing Capacity moving from mild expansion (52.8) to mild contraction (49.1) in the second half of the month. The inventories that are soaking up that capacity seem to be relatively static, as Transportation Utilization dropped from expansion at 61.5 in early August, to no movement at 50.0 in the second half of the month.
We also compare smaller firms (those with 0-999 employees, represented by maroon lines) to larger firms (those with 1,000 employees or more, represented by gold lines) in August. Similar to what we have seen in 3 of the last 4 months, smaller respondents are reporting significantly more activity this month than their larger counterparts. However unlike those reports, there was no significant difference in Inventory Levels, as large firms have now moved into expansionary territory (55.6) after contracting in July (49.0). The movements of inventories to larger firms may explain the statistically higher rate of expansion for Warehousing Utilization for large respondents (67.1) compared to their smaller counterparts (57.7). Despite this shift, smaller firms show significantly higher Inventory Costs (83.7) than larger firms (72.2), although both as still up significantly. Taken together, smaller firms report marginally a higher overall index (62.7 to 58.2), continuing the trend we have seen through much of 2025 with smaller firms reporting more supply chain activity across the board
The index scores for each of the eight components of the Logistics Managers’ Index, as well as the overall index score, are presented in the table below. The rate of expansion for the overall index is 59.3, which is up slightly (+0.1) from July’s reading of 59.2. Inventory Costs are back up (+7.3) to 79.2, putting pressure on Warehousing Capacity (-0.6 to 50.5) and Warehousing Costs (+3.9 to 72.2). This inventory doesn’t seem to be moving much though, and Transportation Capacity is up (+4.7) to 57.3, this is slightly above Transportation Prices, which are down (-6.9) to 56.1, signaling a very slight negative freight inversion. The inversion is driven Upstream, where Transportation Prices are significantly lowers (51.5 to 66.1).
The index scores for each of the eight components of the Logistics Managers’ Index, as well as the overall index score, are presented in the table below. The rate of expansion for the overall index is 59.3, which is up slightly (+0.1) from July’s reading of 59.2. Inventory Costs are back up (+7.3) to 79.2, putting pressure on Warehousing Capacity (-0.6 to 50.5) and Warehousing Costs (+3.9 to 72.2). This inventory doesn’t seem to be moving much though, and Transportation Capacity is up (+4.7) to 57.3, this is slightly above Transportation Prices, which are down (-6.9) to 56.1, signaling a very slight negative freight inversion. The inversion is driven Upstream, where Transportation Prices are significantly lowers (51.5 to 66.1).
Historic Logistics Managers’ Index Scores
This period’s along with prior readings from the last two years of the LMI are presented table below:
This period’s along with prior readings from the last two years of the LMI are presented table below:
LMI®
The overall index reads in at 59.3 in August, up very slightly (+0.1) from July’s reading of 59.2. This is up (+2.8) from last July and significantly up (+8.1) from the reading of 51.2 two years ago. Speaking in overall terms, this reading within less than half of a standard deviation from the all-time average of 61.5, so this represents an only slightly lower than average rate of expansion. This was driven by increasing Inventory Costs (79.2) but tempered by a softening freight market. We observe a significant difference between smaller (62.7) and larger (58.2) respondents, reflecting the higher levels of inventory and strain on storage capacity at the middle-mile of the supply chain.
When asked to predict what conditions will be over the next 12 months, respondents foresee a rate of expansion of 63.9, which is up (+1.3) from July’s future prediction of 62.6and just above (+2.4) the all-time average. Respondents expect activity to be fairly even across the supply chain, with Upstream respondents predicting overall expansion of 64.0, and Downstream respondents predicting expansion at 64.9.
The overall index reads in at 59.3 in August, up very slightly (+0.1) from July’s reading of 59.2. This is up (+2.8) from last July and significantly up (+8.1) from the reading of 51.2 two years ago. Speaking in overall terms, this reading within less than half of a standard deviation from the all-time average of 61.5, so this represents an only slightly lower than average rate of expansion. This was driven by increasing Inventory Costs (79.2) but tempered by a softening freight market. We observe a significant difference between smaller (62.7) and larger (58.2) respondents, reflecting the higher levels of inventory and strain on storage capacity at the middle-mile of the supply chain.
When asked to predict what conditions will be over the next 12 months, respondents foresee a rate of expansion of 63.9, which is up (+1.3) from July’s future prediction of 62.6and just above (+2.4) the all-time average. Respondents expect activity to be fairly even across the supply chain, with Upstream respondents predicting overall expansion of 64.0, and Downstream respondents predicting expansion at 64.9.
Inventory Levels
The Inventory Level index is 58.2, up (+2.6) from July’s reading of 55.6. Inventory Levels are 2.5 points higher than a year ago, and 10.3 points higher than two years ago at this time. This month, both Upstream (58.1) and Downstream (57.1) are reporting increases, at very similar levels. In the previous two months, Upstream was reporting increases very similar to this, while Downstream was reporting negligible increases or slight decreases. It seems that the Upstream increases have now made their way to Downstream firms, perhaps as retailers prepared for back-to-school shopping. Small firms returned 59.3, while large returned 55.6, so both large and small are seeing small increases. This is quite a change from last month, when small firms had significant increases, at 64.8, while large firms returned 49.0, a value 15.8 points lower.
Predictions for future Inventory Level growth is 55.0, down (-1.2) from July’s future prediction of 56.2. Both Upstream and Downstream firms expect small increases in Inventory Levels, over the next year. This is quite a change from last month, when Upstream firms returned a value of 62.0, and Downstream returned 45.2. Upstream firms were expecting Inventory Levels to continue to increase, and Downstream is expecting a small decrease. The current numbers represent much more of a return to business as usual.
The Inventory Level index is 58.2, up (+2.6) from July’s reading of 55.6. Inventory Levels are 2.5 points higher than a year ago, and 10.3 points higher than two years ago at this time. This month, both Upstream (58.1) and Downstream (57.1) are reporting increases, at very similar levels. In the previous two months, Upstream was reporting increases very similar to this, while Downstream was reporting negligible increases or slight decreases. It seems that the Upstream increases have now made their way to Downstream firms, perhaps as retailers prepared for back-to-school shopping. Small firms returned 59.3, while large returned 55.6, so both large and small are seeing small increases. This is quite a change from last month, when small firms had significant increases, at 64.8, while large firms returned 49.0, a value 15.8 points lower.
Predictions for future Inventory Level growth is 55.0, down (-1.2) from July’s future prediction of 56.2. Both Upstream and Downstream firms expect small increases in Inventory Levels, over the next year. This is quite a change from last month, when Upstream firms returned a value of 62.0, and Downstream returned 45.2. Upstream firms were expecting Inventory Levels to continue to increase, and Downstream is expecting a small decrease. The current numbers represent much more of a return to business as usual.
Inventory Costs
Inventory Costs are 79.2, up (+7.3) from July’s reading of 71.9 and indicating very significantly increasing costs. The current value is 10.2 points higher than last year at this time, and 10.1 points higher than two years ago, so compared to the last two years, this month is significantly higher than we have come to expect for August. The current value is only 1.7 points lower than the June reading, which was the highest of the last two years. Other than that, it is the highest August reading since 2022, when supply chains were still recovering from the effects of the pandemic. By any standards, these inventory increases are literally among the highest we have seen in recent years. Upstream returned a value of 77.9, and Downstream returned a slightly larger value, at 81.5. It is a little bit surprising that Downstream reported higher Inventory Costs, by 3.6 points, because Upstream reported slightly higher Inventory Levels, by 1.0 points. Downstream firms would again appear to be bearing higher Inventory Costs to a greater extent than Upstream firms. We also saw this phenomenon last month.
Predictions for future Inventory Cost growth is 79.5, up (+4.2) from July’s future prediction of 75.3 and suggesting that even if inventories do remain lean – that they will be expensive. Upstream returned 77.5, and Downstream returned 85.2. This is not surprising, because Downstream firms expect higher inventories, by 3.9 points, and also expect higher costs, by 7.7 points.
Inventory Costs are 79.2, up (+7.3) from July’s reading of 71.9 and indicating very significantly increasing costs. The current value is 10.2 points higher than last year at this time, and 10.1 points higher than two years ago, so compared to the last two years, this month is significantly higher than we have come to expect for August. The current value is only 1.7 points lower than the June reading, which was the highest of the last two years. Other than that, it is the highest August reading since 2022, when supply chains were still recovering from the effects of the pandemic. By any standards, these inventory increases are literally among the highest we have seen in recent years. Upstream returned a value of 77.9, and Downstream returned a slightly larger value, at 81.5. It is a little bit surprising that Downstream reported higher Inventory Costs, by 3.6 points, because Upstream reported slightly higher Inventory Levels, by 1.0 points. Downstream firms would again appear to be bearing higher Inventory Costs to a greater extent than Upstream firms. We also saw this phenomenon last month.
Predictions for future Inventory Cost growth is 79.5, up (+4.2) from July’s future prediction of 75.3 and suggesting that even if inventories do remain lean – that they will be expensive. Upstream returned 77.5, and Downstream returned 85.2. This is not surprising, because Downstream firms expect higher inventories, by 3.9 points, and also expect higher costs, by 7.7 points.
Warehousing Capacity
Nearly reverting to the point of neutrality, this month we see Warehouse Capacity tick down .6-points and just barely remaining into expansionary territory where the reading for August Warehousing Capacity index comes in at 50.5. This reading is down 9 points from the reading one year ago and is also down by 10.3-points from the reading two years ago. In addition there was a 3.8 -point split between Upstream (49.2 and up less than one-point from last month) and Downstream (51.9 largely unchanged from the month prior) which was not statistically significant (p>.1), this three month contraction in the Upstream market whereas Downstream appears to be still expanding is notable, and likely the source of the continued upward price pressure in the warehousing space. Comparing the differences between small (<999 employees) and large (>999) employees we see that these values are 51.0 and 48.7 (previously 45.3 and 55.0, respectively), where the previous contraction:expansion relationship has reversed (small firms are now in expansionary territory whereas large firms are contracting). This 2.3-point split was not statistically significant (p >.1).
Exploring the future predictions for this value we see that Warehouse Capacity is expected to contract slightly at 49.4, down (-2.8) from July’s future prediction of 52.2. Downstream is expected to shift from the contraction rating of last month and revert to contraction territory (46.8) and Upstream is expected to continue to expand one year out with a value of 53.8 (a slight decrease from last month). This 7.1-point increase was not statistically significant (p>.1).
Nearly reverting to the point of neutrality, this month we see Warehouse Capacity tick down .6-points and just barely remaining into expansionary territory where the reading for August Warehousing Capacity index comes in at 50.5. This reading is down 9 points from the reading one year ago and is also down by 10.3-points from the reading two years ago. In addition there was a 3.8 -point split between Upstream (49.2 and up less than one-point from last month) and Downstream (51.9 largely unchanged from the month prior) which was not statistically significant (p>.1), this three month contraction in the Upstream market whereas Downstream appears to be still expanding is notable, and likely the source of the continued upward price pressure in the warehousing space. Comparing the differences between small (<999 employees) and large (>999) employees we see that these values are 51.0 and 48.7 (previously 45.3 and 55.0, respectively), where the previous contraction:expansion relationship has reversed (small firms are now in expansionary territory whereas large firms are contracting). This 2.3-point split was not statistically significant (p >.1).
Exploring the future predictions for this value we see that Warehouse Capacity is expected to contract slightly at 49.4, down (-2.8) from July’s future prediction of 52.2. Downstream is expected to shift from the contraction rating of last month and revert to contraction territory (46.8) and Upstream is expected to continue to expand one year out with a value of 53.8 (a slight decrease from last month). This 7.1-point increase was not statistically significant (p>.1).
Warehousing Utilization
The Warehousing Utilization index registered in at 62.1-points for the month of August 2025, reflecting a modest 2.7-point increase from the month prior, breaking the three-month downward trend. This reading is up 4.5 points from the reading one year ago, and also up 4.3-points from the reading two years ago. In addition there was a 3.4-point split between Upstream (62.7 up less than one-point from the month prior) and Downstream (59.3 up over 13 points from the month prior) which was marginally statistically significant (p<.1) and notable due to the Downstream space entering back into expansion, and showing a reverting trend “see-saw” trend for three months in a row. Comparing the differences between small (<999 employees) and large (>999) employees we see that these values are 57.7 and 67.7 (previously 61.6 and 58.0, respectively), with small firms remaining in expansionary territory and growth in both market sizes strengthening from last month. This 9.4-point split was marginally statistically significant (p <.1).
Finally, exploring the future predictions for this value we see that Warehouse Utilization is expected to continue to stay in expansionary territory one year out at 65.2, up (+4.8) from July’s future prediction of 60.4, suggesting that utilization could expand robustly over the next 12 months. Future Upstream expectations (75.4 down nearly 4 points from the reading one-month prior) are predicted to be increasing, at approximately the same rate as Downstream expectations (75.9). This month's .04 (vs last month’s 11)-point difference was not statistically significant (p>.1).
The Warehousing Utilization index registered in at 62.1-points for the month of August 2025, reflecting a modest 2.7-point increase from the month prior, breaking the three-month downward trend. This reading is up 4.5 points from the reading one year ago, and also up 4.3-points from the reading two years ago. In addition there was a 3.4-point split between Upstream (62.7 up less than one-point from the month prior) and Downstream (59.3 up over 13 points from the month prior) which was marginally statistically significant (p<.1) and notable due to the Downstream space entering back into expansion, and showing a reverting trend “see-saw” trend for three months in a row. Comparing the differences between small (<999 employees) and large (>999) employees we see that these values are 57.7 and 67.7 (previously 61.6 and 58.0, respectively), with small firms remaining in expansionary territory and growth in both market sizes strengthening from last month. This 9.4-point split was marginally statistically significant (p <.1).
Finally, exploring the future predictions for this value we see that Warehouse Utilization is expected to continue to stay in expansionary territory one year out at 65.2, up (+4.8) from July’s future prediction of 60.4, suggesting that utilization could expand robustly over the next 12 months. Future Upstream expectations (75.4 down nearly 4 points from the reading one-month prior) are predicted to be increasing, at approximately the same rate as Downstream expectations (75.9). This month's .04 (vs last month’s 11)-point difference was not statistically significant (p>.1).
Warehousing Prices
The Warehousing Pricing index registered up 3.9-points at 72.2 -points for the month of August 2025, likely reflecting the decrease in utilization as well as the decrease in capacity (though in a more sensitive and responsive fashion than previous months). This reading is up 8.4 points from the reading one year ago, and also up 8.8 points from the reading two years ago. In addition, there was a 4.9 -point split between Upstream (71.0) and Downstream (75.9) which was not statistically significant (p>.1). Comparing the differences between small (<999 employees) and large (>999) employers we see that these values are 73.1 and 70.3 (previously 71.7 and 64.9) reflecting a 2.8-point difference between the two which was not statistically significant (p >.1).
Finally, exploring the future predictions for this value we see that Warehouse Prices are expected to continue to stay in expansionary territory one year out at 75.3, up slightly (+0.6) from Jul’s future prediction of 74.7. Future Upstream expectations (75.4 down nearly 4 points from the reading one-month prior) are predicted to increase at approximately the same rate as Downstream expectations (75.9). This month's .04 (vs last month’s 11)-point difference was not statistically significant (p>.1).
The Warehousing Pricing index registered up 3.9-points at 72.2 -points for the month of August 2025, likely reflecting the decrease in utilization as well as the decrease in capacity (though in a more sensitive and responsive fashion than previous months). This reading is up 8.4 points from the reading one year ago, and also up 8.8 points from the reading two years ago. In addition, there was a 4.9 -point split between Upstream (71.0) and Downstream (75.9) which was not statistically significant (p>.1). Comparing the differences between small (<999 employees) and large (>999) employers we see that these values are 73.1 and 70.3 (previously 71.7 and 64.9) reflecting a 2.8-point difference between the two which was not statistically significant (p >.1).
Finally, exploring the future predictions for this value we see that Warehouse Prices are expected to continue to stay in expansionary territory one year out at 75.3, up slightly (+0.6) from Jul’s future prediction of 74.7. Future Upstream expectations (75.4 down nearly 4 points from the reading one-month prior) are predicted to increase at approximately the same rate as Downstream expectations (75.9). This month's .04 (vs last month’s 11)-point difference was not statistically significant (p>.1).
Transportation Capacity
The Transportation Capacity Index increased 4.7 points to 57.3 percent in August 2025. With this jump, the Transportation Capacity index achieves a level not seen Since May of 2024, which marked the positive freight inversion than began the current cycle of expansion. It is therefore fitting that we hit this level again on the first month since then with a negative freight inversion.
While the Upstream Transportation Capacity index is at 57.6, the Downstream index is slightly lower at 55.4 but the difference is not statistically significant. The future Transportation Capacity index moved back below the critical threshold, and it is now at 49.0, indicating slight contraction for the next 12 months. While the future Upstream index is at 48.5, the Downstream Transportation Capacity index is at 46.4, both indicating slight contraction, but the difference is not statistically significant.
The Transportation Capacity Index increased 4.7 points to 57.3 percent in August 2025. With this jump, the Transportation Capacity index achieves a level not seen Since May of 2024, which marked the positive freight inversion than began the current cycle of expansion. It is therefore fitting that we hit this level again on the first month since then with a negative freight inversion.
While the Upstream Transportation Capacity index is at 57.6, the Downstream index is slightly lower at 55.4 but the difference is not statistically significant. The future Transportation Capacity index moved back below the critical threshold, and it is now at 49.0, indicating slight contraction for the next 12 months. While the future Upstream index is at 48.5, the Downstream Transportation Capacity index is at 46.4, both indicating slight contraction, but the difference is not statistically significant.
Transportation Utilization
The Transportation Utilization Index dropped 4.8 points, indicating 54.7 in August 2025. With this drop the Transportation Utilization returns to levels seen earlier this year, while still indicating slight expansion. This was driven by movements throughout August, as Transportation Utilization dropped from expansion at 61.5 in early August to no change at 50.0 later in the month. The Downstream Transportation Utilization Index is now at 51.8, while the Upstream index indicates 55.3, but the difference is not statistically significant. So it can be concluded that the slight expansion in Transportation Utilization is prevalent up and down supply chains.
The future Transportation Utilization Index drops 1.8 points from last month, indicating 62.4 points for the next 12 months. As such, Transportation Utilization is still expected to increase in the near future. The future Upstream Transportation Utilization index at 62.0 and the Downstream index at 51.8 but the difference is not statistically significant.
The Transportation Utilization Index dropped 4.8 points, indicating 54.7 in August 2025. With this drop the Transportation Utilization returns to levels seen earlier this year, while still indicating slight expansion. This was driven by movements throughout August, as Transportation Utilization dropped from expansion at 61.5 in early August to no change at 50.0 later in the month. The Downstream Transportation Utilization Index is now at 51.8, while the Upstream index indicates 55.3, but the difference is not statistically significant. So it can be concluded that the slight expansion in Transportation Utilization is prevalent up and down supply chains.
The future Transportation Utilization Index drops 1.8 points from last month, indicating 62.4 points for the next 12 months. As such, Transportation Utilization is still expected to increase in the near future. The future Upstream Transportation Utilization index at 62.0 and the Downstream index at 51.8 but the difference is not statistically significant.
Transportation Prices
The Transportation Prices Index dropped 6.9 points from the previous reading and recorded 56.1 in August 2025. This is the lowest reading for this metric since April of 2024, which was the end of the 2022-2023 freight recession. This is driven by the Upstream Transportation Prices Index which is at 51.5, and the Downstream index is at 66.1 and the difference is statistically significant. As such, it can be concluded that the price increases that we see in transportation are felt stronger Downstream than Upstream.
The future index for Transportation Prices also decreased from last month, indicating 3.6 points lower at 71.9. The Upstream future Transportation Prices index is at 72.8 while the Downstream Transportation Prices index is at 69.6, but the difference is not significant. As such, it can be concluded that expectations of higher Transportation Prices remain prevalent across the economy, both Upstream and Downstream supply chains.
The Transportation Prices Index dropped 6.9 points from the previous reading and recorded 56.1 in August 2025. This is the lowest reading for this metric since April of 2024, which was the end of the 2022-2023 freight recession. This is driven by the Upstream Transportation Prices Index which is at 51.5, and the Downstream index is at 66.1 and the difference is statistically significant. As such, it can be concluded that the price increases that we see in transportation are felt stronger Downstream than Upstream.
The future index for Transportation Prices also decreased from last month, indicating 3.6 points lower at 71.9. The Upstream future Transportation Prices index is at 72.8 while the Downstream Transportation Prices index is at 69.6, but the difference is not significant. As such, it can be concluded that expectations of higher Transportation Prices remain prevalent across the economy, both Upstream and Downstream supply chains.
About This Report
The data presented herein are obtained from a survey of logistics supply executives based on information they have collected within their respective organizations. LMI® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.
Data and Method of Presentation
Data for the Logistics Manager’s Index is collected in a monthly survey of leading logistics professionals. The respondents are CSCMP members working at the director-level or above. Upper-level managers are preferable as they are more likely to have macro-level information on trends in Inventory, Warehousing and Transportation trends within their firm. Data is also collected from subscribers to both DC Velocity and Supply Chain Quarterly as well. Respondents hail from firms working on all six continents, with the majority of them working at firms with annual revenues over a billion dollars. The industries represented in this respondent pool include, but are not limited to: Apparel, Automotive, Consumer Goods, Electronics, Food & Drug, Home Furnishings, Logistics, Shipping & Transportation, and Warehousing.
Respondents are asked to identify the monthly change across each of the eight metrics collected in this survey (Inventory Levels, Inventory Costs, Warehousing Capacity, Warehousing Utilization, Warehousing Prices, Transportation Capacity, Transportation Utilization, and Transportation Prices). In addition, they also forecast future trends for each metric ranging over the next 12 months. The raw data is then analyzed using a diffusion index. Diffusion Indexes measure how widely something is diffused or spread across a group. The Bureau of Labor Statistics has been using a diffusion index for the Current Employment Statics program since 1974, and the Institute for Supply Management (ISM) has been using a diffusion index to compute the Purchasing Managers Index since 1948. The ISM Index of New Orders is considered a Leading Economic Indicator.
We compute the Diffusion Index as follows:
PD = Percentage of respondents saying the category is Declining,
PU = Percentage of respondents saying the category is Unchanged,
PI = Percentage of respondents saying the category is Increasing,
Diffusion Index = 0.0 * PD + 0.5 * PU + 1.0 * PI
For example, if 25 say the category is declining, 38 say it is unchanged, and 37 say it is increasing, we would calculate an index value of 0*0.25 + 0.5*0.38 + 1.0*0.37 = 0 + 0.19 + 0.37 = 0.56, and the index is increasing overall. For an index value above 0.5 indicates the category is increasing, a value below 0.5 indicates it is decreasing, and a value of 0.5 means the category is unchanged. When a full year’s worth of data has been collected, adjustments will be made for seasonal factors as well.
Logistics Managers Index
Requests for permission to reproduce or distribute Logistics Managers Index Content can be made by contacting in writing at: Dale S. Rogers, WP Carey School of Business, Tempe, Arizona 85287, or by emailing [email protected] Subject: Content Request.
The authors of the Logistics Managers Index shall not have any liability, duty, or obligation for or relating to the Logistics Managers Index Content or other information contained herein, any errors, inaccuracies, omissions, or delays in providing any Logistics Managers Index Content, or for any actions taken in reliance thereon. In no event shall the authors of the Logistics Managers Index be liable for any special, incidental, or consequential damages, arising out of the use of the Logistics Managers Index. Logistics Managers Index, and LMI® are registered trademarks.
About The Logistics Manager’s Index®
The Logistics Manager’s Index (LMI) is a joint project between researchers from Arizona State University, Colorado State University, University of Nevada, Reno, Florida Atlantic University, and Rutgers University, supported by CSCMP. It is authored by Zac Rogers Ph.D., Steven Carnovale Ph.D., Shen Yeniyurt Ph.D., Ron Lembke Ph.D., and Dale Rogers Ph.D.
The data presented herein are obtained from a survey of logistics supply executives based on information they have collected within their respective organizations. LMI® makes no representation, other than that stated within this release, regarding the individual company data collection procedures. The data should be compared to all other economic data sources when used in decision-making.
Data and Method of Presentation
Data for the Logistics Manager’s Index is collected in a monthly survey of leading logistics professionals. The respondents are CSCMP members working at the director-level or above. Upper-level managers are preferable as they are more likely to have macro-level information on trends in Inventory, Warehousing and Transportation trends within their firm. Data is also collected from subscribers to both DC Velocity and Supply Chain Quarterly as well. Respondents hail from firms working on all six continents, with the majority of them working at firms with annual revenues over a billion dollars. The industries represented in this respondent pool include, but are not limited to: Apparel, Automotive, Consumer Goods, Electronics, Food & Drug, Home Furnishings, Logistics, Shipping & Transportation, and Warehousing.
Respondents are asked to identify the monthly change across each of the eight metrics collected in this survey (Inventory Levels, Inventory Costs, Warehousing Capacity, Warehousing Utilization, Warehousing Prices, Transportation Capacity, Transportation Utilization, and Transportation Prices). In addition, they also forecast future trends for each metric ranging over the next 12 months. The raw data is then analyzed using a diffusion index. Diffusion Indexes measure how widely something is diffused or spread across a group. The Bureau of Labor Statistics has been using a diffusion index for the Current Employment Statics program since 1974, and the Institute for Supply Management (ISM) has been using a diffusion index to compute the Purchasing Managers Index since 1948. The ISM Index of New Orders is considered a Leading Economic Indicator.
We compute the Diffusion Index as follows:
PD = Percentage of respondents saying the category is Declining,
PU = Percentage of respondents saying the category is Unchanged,
PI = Percentage of respondents saying the category is Increasing,
Diffusion Index = 0.0 * PD + 0.5 * PU + 1.0 * PI
For example, if 25 say the category is declining, 38 say it is unchanged, and 37 say it is increasing, we would calculate an index value of 0*0.25 + 0.5*0.38 + 1.0*0.37 = 0 + 0.19 + 0.37 = 0.56, and the index is increasing overall. For an index value above 0.5 indicates the category is increasing, a value below 0.5 indicates it is decreasing, and a value of 0.5 means the category is unchanged. When a full year’s worth of data has been collected, adjustments will be made for seasonal factors as well.
Logistics Managers Index
Requests for permission to reproduce or distribute Logistics Managers Index Content can be made by contacting in writing at: Dale S. Rogers, WP Carey School of Business, Tempe, Arizona 85287, or by emailing [email protected] Subject: Content Request.
The authors of the Logistics Managers Index shall not have any liability, duty, or obligation for or relating to the Logistics Managers Index Content or other information contained herein, any errors, inaccuracies, omissions, or delays in providing any Logistics Managers Index Content, or for any actions taken in reliance thereon. In no event shall the authors of the Logistics Managers Index be liable for any special, incidental, or consequential damages, arising out of the use of the Logistics Managers Index. Logistics Managers Index, and LMI® are registered trademarks.
About The Logistics Manager’s Index®
The Logistics Manager’s Index (LMI) is a joint project between researchers from Arizona State University, Colorado State University, University of Nevada, Reno, Florida Atlantic University, and Rutgers University, supported by CSCMP. It is authored by Zac Rogers Ph.D., Steven Carnovale Ph.D., Shen Yeniyurt Ph.D., Ron Lembke Ph.D., and Dale Rogers Ph.D.
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