FOR RELEASE: Tuesday, November 1st, 2022
Contact:
Zac Rogers, Ph.D.
Logistics Manager’s Index Analyst
Assistant Professor, Supply Chain Management
Department of Management
Colorado State University
Fort Collins, Colorado
(970) 491-0890
E-mail: Zac.Rogers@colostate.edu
http://www.logisticsindex.org
Twitter: @LogisticsIndex
Contact:
Zac Rogers, Ph.D.
Logistics Manager’s Index Analyst
Assistant Professor, Supply Chain Management
Department of Management
Colorado State University
Fort Collins, Colorado
(970) 491-0890
E-mail: Zac.Rogers@colostate.edu
http://www.logisticsindex.org
Twitter: @LogisticsIndex
October 2022 Logistics Manager’s Index Report®
LMI® at 57.5
Growth is INCREASING AT AN INCREASING RATE for: Inventory Costs, Warehousing Prices, and Transportation Capacity
Growth is INCREASING AT A DECREASING RATE for: Inventory Levels, Warehousing Utilization, and Transportation Utilization.
Warehousing Capacity and Transportation Prices
are CONTRACTING.
LMI® at 57.5
Growth is INCREASING AT AN INCREASING RATE for: Inventory Costs, Warehousing Prices, and Transportation Capacity
Growth is INCREASING AT A DECREASING RATE for: Inventory Levels, Warehousing Utilization, and Transportation Utilization.
Warehousing Capacity and Transportation Prices
are CONTRACTING.
(Fort Collins, Colorado) — The Logistics Managers’ Index reads in at 57.5 in October, down (-3.9) from September’s reading of 61.4. This is the second month out of the last three that the overall index has read in below 60.0. This month’s reading is the lowest since May of 2020 at the height of COVID-19 lockdowns, however, as the rating is over 50.0, we do still register growth.
In a continuation of what we have seen for the last six months, the engine of this growth are the warehousing and inventory metrics. While we do see some evidence that firms are finally winding down their inventories, the costs associated with holding them remain high, and we continue to see a lack of available Warehousing Capacity. We do not observe any capacity issues with transportation. Transportation Capacity read in at 73.1 in October, which is the highest rate of growth observed in the history of this index.
Similar to what we noted last month, inventory seems to be sitting idly (primarily downstream) clogging warehouses where retailers hope for a busy Q4. The flipside of that is that the normal peak season for carriers has not materialized, as there has been less to move than we would usually see during this time of year. Ecommerce is expected to be up 2.5% from last year, so some demand for transportation could still materialize, it is extremely unlikely though that even if sales reached the most optimistic predictions that it would be enough to keep the fleets of most carriers busy.
Researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, 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 October 2022. Overall, the LMI is down (-3.9) from September’s reading of 61.4. Like September, transportation metrics continue to be a drag on the logistics industry, while inventories remain high, warehouses remain full, and they both remain expensive.
The logistics industry continues to struggle to find its way through somewhat confusing economic conditions. On a macro-level, there were some positive economic signs in October, chief among them the announcement that U.S. GDP grew at a rate of 2.6% in Q3, exceeding expectations and breaking the two-quarter streak of contraction we had seen through the first half of 2022. Germany also grew in Q3, bucking expectations and providing a mild level of optimism for Europe’s economic future through the rest of the year[1]. China rebounded somewhat in Q3, but is still limited by low exports, the strong dollar increasing U.S. purchasing power, and issues with their housing market[2]. Conversely, consumer spending growth slowed slightly, growing 0.4% in Q3 after increasing at a rate of 0.5% in Q2. This is a 180 from Q1 when spending grew but overall GDP contracted[3]. We also saw U.S. unemployment dip, with initial jobless claims remaining very low in late October. While 263,000 jobs were added in September, positions in warehousing and transportation were down, suggesting that supply chains are continuing to “right size” ahead of Q4[4]. Despite this positive news, many dark clouds continue to hang over the economy. Core inflation reached its highest level in four decades (although when fuel and food are included the rate slows a bit)[5]. The Fed has signaled that it will increase interest rates by an additional 0.75% at their early November meeting (which will coincide with the release of this report)[6]. Some financial institutions and politicians have called for a pivot away from the rate expansion, but with compensation for civilians up 1.2% seasonally-adjusted in October, it is possible they will consider further increases going forward4. These competing factors are leading to significant uncertainty as to what the rest of 2022 will look like. Online sales are expected to increase by 2.5% year over year in Q4, a far cry from the explosive growth of the last two holidays, dampening expectations somewhat through the rest of the year[7], and making it unclear whether or not firms will be able to wind down the inventories sitting in their warehouses, and if demand for transportation will pick up or continue its slide.
Inventories grew in October, but at a reduced pace from what we have seen. The reading of 65.5 (down 6.4 from September’s reading of 71.9) is the slowest rate of growth we have observed since December of 2021, which is the month that unusually high inventories first began to accumulate. This slowing rate of growth comes as the result of concentrated efforts by many firms to run down the volume of goods being held within their supply chain. A recent example of these tactics is Amazon’s recent Prime Early Access sale in mid-October. While the sale brought in $1.8 billion less in revenue than July’s Prime Day, the company did report selling over 100 million items, significantly winding down inventories and helping to ease congestion throughout their network[8]. The volume moved during this second Prime Day is widely seen as evidence that consumers might once again spread out their holiday shopping across the last three months of the year.
Despite these efforts, inventory continues to clog supply chains. The rail backups at Chicago switching yards are so bad that BNSF has begun placing wood over some tracks so idle containers can be stored on top of them. Union Pacific continues its practice of capping the number of shipments it will accept as logistics firms sort through the pile of idle and empty boxes to free up the chassis and the space needed to move goods away from the ports and towards consumers[9]. The glut of inventory is a leading factor behind the slowdown in transportation all the way through supply chains. The volume coming in through U.S. seaports will be down 4% year over year in the last 6 months of 2022. This stands in stark contrast to the 5.5% growth we observed in the first half of the year. This disparity lends more credence to the anecdotal stories of firms pulling inventory forward ahead of time to avoid the congestion that flummoxed them in 2021[10]. This slowdown has been more pronounced in what should have been peak season for the ports in 2022. Containers in though the Southern California ports were down 18% year over year in September, a dip that came on the heels of a 12% decline in August. An even bigger decline can be seen in the cost of containers moving from Asia to the West Coast of the U.S. as they have dropped from $20,000 per box to lower than pre-pandemic levels at $2,700[11]. There is some hope that international orders are finally reaching equilibrium, as the cost of containers going from China to the west coast of the U.S. remained essentially flat in October, suggesting that we may have finally reached a “new normal”[12]. The end result of this is that Inventory Costs continue to grow at an elevated rate, up (+3.7) to 80.9 in October, indicating a significant rate of growth. This is the first time since June that this metric has been back over 80.0. It is good that inventories are starting to dwindle, but until they can be brought down further – possibly through increased consumer activity in November and December – inventories on hand will continue to add significant cost to supply chains.
As would be anticipated, these high costs are keenly felt in the warehousing sector. The growth rate for Warehousing Prices read in at 75.5, essentially unchanged (+0.05) from September’s reading, and is second only to Inventory costs in this month’s report. The high costs are a direct result of the ongoing contraction of Warehousing Capacity. Despite several hundreds of millions of square feet of space being brought online over the last two years, the available supply of storage space cannot keep up with demand. Warehousing Capacity read in at 44.7 up very slightly (+0.4) from September’s reading of 44.3. This is the 26th consecutive month of contraction in this space. Although the rate of inventory buildup has slowed, there is still not enough space. A continuing constraint on warehousing is staffing. A recent study by ProGlove finds that the majority of operators are having difficulty finding enough people to work, and that nearly half of those they do have are experiencing some sort of burnout or fatigue[13]. Automation has filled some of this labor gap. The number of industrial robots installed in 2021 was up 31% year over year and is expected to rise another 10% in 2022, bringing the estimation for the total number of bots currently deployed to around 3.5 million units[14]. Another factor shaping the labor issue is the ongoing push for unionization among warehouse and fulfillment workers. Amazon workers in Illinois and Georgia walked out on the Prime Day held on October 12th, joining workers who walked out earlier this year in Minnesota, New York, and California as they push for improved working conditions[15]. Some distributors have tried to improve working conditions by making them nicer places to spend the workday, taking a page from tech companies adding amenities like large windows and skylights, as well as fitness centers and nearby trails. This is in addition to pay increases seen throughout the industry[16]. Interestingly, the high level of jobs available, higher pay, better shift times, and increased amenities have led to high levels of job satisfaction. Approximately 65% of those surveyed by EmployBridge and Staffing Leadership Group report being “extremely or very optimistic about their financial future”[17].
Despite all of this, there is a glimmer of hope for easing capacity. The U.S. warehouse vacancy rate went from 3% to 3.2% in Q3. This is still well below the 5% vacancy rate of two years ago, but it represents the first easing of capacity in two years. However, the pace of growth may be finally starting to slow as firms continue to wind down their record levels of inventory[18]. Any easing in this market would be particularly welcomed by smaller retailers and distributors, who have been boxed out for much of the last two years by bigger players with their larger pools of resources[19]. Prologis is dealing with the potential slowdown by moving away from speculative production and towards deal-by-deal projects. That is not to say the market has taken a similar turn to transportation though, with third-quarter revenue up 48% year over year[20]. Some evidence of this still-busy-but-easing market can be found in the significantly reduced (-16.0) rate of growth for our Warehousing Utilization metric – down to 60.8 from September’s 76.8 rate of expansion. 60.8 still indicates growth, and that firms are struggling to find space for their goods, but the slowed expansion may mean that the struggle is not quite as sharp as it had previously been. Because the supply/demand mismatch is still severe, it remains unlikely that the warehousing industry will experience the same sort of overbuilding that we have seen with the transportation market.
That slowdown is perhaps best illustrated by this month’s reading of 73.1 (+1.3) for the Transportation Capacity metric. This is the highest reading for this metric in the history of the index, exceeding the freight recession of 2019 and marking a new nadir in the downturn being experienced in this market. The dip in transportation is at least somewhat evident in the significant slowdown in mergers and acquisitions in an industry where they had been red-hot over the last 18 months[21]. Adding to this, despite the significant number of jobs that have been added in recent months, the transportation sector has actually lost positions. It is not all doom and gloom however. While J.B. Hunt reported a boost in overall volumes during the third quarter their brokerage arm was down by 8% year over year, and profits were flat10. Similar to what has been predicted in this report throughout the Summer and Fall, they are not anticipating the usual Q4 increase[22]. Union Pacific reported a 13% year-over-year increase in net profits. They expect continued growth in Q4 and intro 2023 to be driven by automotive, coal, and renewable diesel. CEO Lance Fritz also reported on a recent earnings call that the container backlog at the ports has come down, but inventory levels will need to drop as well before they can get back to normal levels of efficiency. Unlike what we see in over-the-road trucking, Union Pacific is anticipating growth in 2022, with carloads up 3% in 2022 from 2021[23].
This lack of capacity has pushed Transportation Prices into their fourth consecutive month of contraction (which followed two years of expansion), with the metric falling (-2.3) to 42.2. This is the lowest reading for this metric since April 2020, suggesting that the last time Transportation Prices fell this quickly was when the world was essentially shut down. Despite this, UPS announced in October that it will match FedEx, increasing its annual tariff rates by 6.9% in 2023. This is a far cry from the general increase of 4.9%, or even 2022’s higher-than-usual 5.9% rate hike, as carriers increase prices to stay ahead of inflation. Interestingly, UPS also announced they would be dropping “peak” from their delivery surcharge pricing in what some are seeing as an indication that UPS expects “peak-level” volumes to become more of a year-round status quo[24]. This comes against the background of UPS reporting positive third-quarter results, with revenue up 4.2% year over year. This growth was driven primarily by package delivery, while B2C and B2B volumes were actually down slightly year over year. That being said, they expect a bump in the fourth quarter[25]. Finally, just as we observe with Warehousing Utilization, the rate of growth for Transportation Utilization is down significantly to 52.8 (-8.3) from September’s reading of 61.1. This is actually back in line with previous readings and suggests that the sudden increase seen in the utilization metrics in September was supply chains pushing goods downstream to position them closer to consumers ahead of Q4.
We noted in last month’s report that many of our metrics slowed down in the second half of September, which suggested that the overall index’s move back into the 60’s may have been fool’s gold. That theory seems to be borne out with this month’s lower numbers. Not only that, but we are seeing a repeat of this dynamics in the breakdown of responses from early October (the first to the seventeenth, represented by the gold bars) relative to late October (the eighteenth to thirty-first). Many of the metrics, including the overall index slowed in the second half of the month. Much like last month, we see a statistically significant increase in the availability of Transportation Capacity in the second half of the month. This suggests that more and more fleets are idling as we move deeper into Q4 – something that is highly unusual for this time of year.
In a continuation of what we have seen for the last six months, the engine of this growth are the warehousing and inventory metrics. While we do see some evidence that firms are finally winding down their inventories, the costs associated with holding them remain high, and we continue to see a lack of available Warehousing Capacity. We do not observe any capacity issues with transportation. Transportation Capacity read in at 73.1 in October, which is the highest rate of growth observed in the history of this index.
Similar to what we noted last month, inventory seems to be sitting idly (primarily downstream) clogging warehouses where retailers hope for a busy Q4. The flipside of that is that the normal peak season for carriers has not materialized, as there has been less to move than we would usually see during this time of year. Ecommerce is expected to be up 2.5% from last year, so some demand for transportation could still materialize, it is extremely unlikely though that even if sales reached the most optimistic predictions that it would be enough to keep the fleets of most carriers busy.
Researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, 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 October 2022. Overall, the LMI is down (-3.9) from September’s reading of 61.4. Like September, transportation metrics continue to be a drag on the logistics industry, while inventories remain high, warehouses remain full, and they both remain expensive.
The logistics industry continues to struggle to find its way through somewhat confusing economic conditions. On a macro-level, there were some positive economic signs in October, chief among them the announcement that U.S. GDP grew at a rate of 2.6% in Q3, exceeding expectations and breaking the two-quarter streak of contraction we had seen through the first half of 2022. Germany also grew in Q3, bucking expectations and providing a mild level of optimism for Europe’s economic future through the rest of the year[1]. China rebounded somewhat in Q3, but is still limited by low exports, the strong dollar increasing U.S. purchasing power, and issues with their housing market[2]. Conversely, consumer spending growth slowed slightly, growing 0.4% in Q3 after increasing at a rate of 0.5% in Q2. This is a 180 from Q1 when spending grew but overall GDP contracted[3]. We also saw U.S. unemployment dip, with initial jobless claims remaining very low in late October. While 263,000 jobs were added in September, positions in warehousing and transportation were down, suggesting that supply chains are continuing to “right size” ahead of Q4[4]. Despite this positive news, many dark clouds continue to hang over the economy. Core inflation reached its highest level in four decades (although when fuel and food are included the rate slows a bit)[5]. The Fed has signaled that it will increase interest rates by an additional 0.75% at their early November meeting (which will coincide with the release of this report)[6]. Some financial institutions and politicians have called for a pivot away from the rate expansion, but with compensation for civilians up 1.2% seasonally-adjusted in October, it is possible they will consider further increases going forward4. These competing factors are leading to significant uncertainty as to what the rest of 2022 will look like. Online sales are expected to increase by 2.5% year over year in Q4, a far cry from the explosive growth of the last two holidays, dampening expectations somewhat through the rest of the year[7], and making it unclear whether or not firms will be able to wind down the inventories sitting in their warehouses, and if demand for transportation will pick up or continue its slide.
Inventories grew in October, but at a reduced pace from what we have seen. The reading of 65.5 (down 6.4 from September’s reading of 71.9) is the slowest rate of growth we have observed since December of 2021, which is the month that unusually high inventories first began to accumulate. This slowing rate of growth comes as the result of concentrated efforts by many firms to run down the volume of goods being held within their supply chain. A recent example of these tactics is Amazon’s recent Prime Early Access sale in mid-October. While the sale brought in $1.8 billion less in revenue than July’s Prime Day, the company did report selling over 100 million items, significantly winding down inventories and helping to ease congestion throughout their network[8]. The volume moved during this second Prime Day is widely seen as evidence that consumers might once again spread out their holiday shopping across the last three months of the year.
Despite these efforts, inventory continues to clog supply chains. The rail backups at Chicago switching yards are so bad that BNSF has begun placing wood over some tracks so idle containers can be stored on top of them. Union Pacific continues its practice of capping the number of shipments it will accept as logistics firms sort through the pile of idle and empty boxes to free up the chassis and the space needed to move goods away from the ports and towards consumers[9]. The glut of inventory is a leading factor behind the slowdown in transportation all the way through supply chains. The volume coming in through U.S. seaports will be down 4% year over year in the last 6 months of 2022. This stands in stark contrast to the 5.5% growth we observed in the first half of the year. This disparity lends more credence to the anecdotal stories of firms pulling inventory forward ahead of time to avoid the congestion that flummoxed them in 2021[10]. This slowdown has been more pronounced in what should have been peak season for the ports in 2022. Containers in though the Southern California ports were down 18% year over year in September, a dip that came on the heels of a 12% decline in August. An even bigger decline can be seen in the cost of containers moving from Asia to the West Coast of the U.S. as they have dropped from $20,000 per box to lower than pre-pandemic levels at $2,700[11]. There is some hope that international orders are finally reaching equilibrium, as the cost of containers going from China to the west coast of the U.S. remained essentially flat in October, suggesting that we may have finally reached a “new normal”[12]. The end result of this is that Inventory Costs continue to grow at an elevated rate, up (+3.7) to 80.9 in October, indicating a significant rate of growth. This is the first time since June that this metric has been back over 80.0. It is good that inventories are starting to dwindle, but until they can be brought down further – possibly through increased consumer activity in November and December – inventories on hand will continue to add significant cost to supply chains.
As would be anticipated, these high costs are keenly felt in the warehousing sector. The growth rate for Warehousing Prices read in at 75.5, essentially unchanged (+0.05) from September’s reading, and is second only to Inventory costs in this month’s report. The high costs are a direct result of the ongoing contraction of Warehousing Capacity. Despite several hundreds of millions of square feet of space being brought online over the last two years, the available supply of storage space cannot keep up with demand. Warehousing Capacity read in at 44.7 up very slightly (+0.4) from September’s reading of 44.3. This is the 26th consecutive month of contraction in this space. Although the rate of inventory buildup has slowed, there is still not enough space. A continuing constraint on warehousing is staffing. A recent study by ProGlove finds that the majority of operators are having difficulty finding enough people to work, and that nearly half of those they do have are experiencing some sort of burnout or fatigue[13]. Automation has filled some of this labor gap. The number of industrial robots installed in 2021 was up 31% year over year and is expected to rise another 10% in 2022, bringing the estimation for the total number of bots currently deployed to around 3.5 million units[14]. Another factor shaping the labor issue is the ongoing push for unionization among warehouse and fulfillment workers. Amazon workers in Illinois and Georgia walked out on the Prime Day held on October 12th, joining workers who walked out earlier this year in Minnesota, New York, and California as they push for improved working conditions[15]. Some distributors have tried to improve working conditions by making them nicer places to spend the workday, taking a page from tech companies adding amenities like large windows and skylights, as well as fitness centers and nearby trails. This is in addition to pay increases seen throughout the industry[16]. Interestingly, the high level of jobs available, higher pay, better shift times, and increased amenities have led to high levels of job satisfaction. Approximately 65% of those surveyed by EmployBridge and Staffing Leadership Group report being “extremely or very optimistic about their financial future”[17].
Despite all of this, there is a glimmer of hope for easing capacity. The U.S. warehouse vacancy rate went from 3% to 3.2% in Q3. This is still well below the 5% vacancy rate of two years ago, but it represents the first easing of capacity in two years. However, the pace of growth may be finally starting to slow as firms continue to wind down their record levels of inventory[18]. Any easing in this market would be particularly welcomed by smaller retailers and distributors, who have been boxed out for much of the last two years by bigger players with their larger pools of resources[19]. Prologis is dealing with the potential slowdown by moving away from speculative production and towards deal-by-deal projects. That is not to say the market has taken a similar turn to transportation though, with third-quarter revenue up 48% year over year[20]. Some evidence of this still-busy-but-easing market can be found in the significantly reduced (-16.0) rate of growth for our Warehousing Utilization metric – down to 60.8 from September’s 76.8 rate of expansion. 60.8 still indicates growth, and that firms are struggling to find space for their goods, but the slowed expansion may mean that the struggle is not quite as sharp as it had previously been. Because the supply/demand mismatch is still severe, it remains unlikely that the warehousing industry will experience the same sort of overbuilding that we have seen with the transportation market.
That slowdown is perhaps best illustrated by this month’s reading of 73.1 (+1.3) for the Transportation Capacity metric. This is the highest reading for this metric in the history of the index, exceeding the freight recession of 2019 and marking a new nadir in the downturn being experienced in this market. The dip in transportation is at least somewhat evident in the significant slowdown in mergers and acquisitions in an industry where they had been red-hot over the last 18 months[21]. Adding to this, despite the significant number of jobs that have been added in recent months, the transportation sector has actually lost positions. It is not all doom and gloom however. While J.B. Hunt reported a boost in overall volumes during the third quarter their brokerage arm was down by 8% year over year, and profits were flat10. Similar to what has been predicted in this report throughout the Summer and Fall, they are not anticipating the usual Q4 increase[22]. Union Pacific reported a 13% year-over-year increase in net profits. They expect continued growth in Q4 and intro 2023 to be driven by automotive, coal, and renewable diesel. CEO Lance Fritz also reported on a recent earnings call that the container backlog at the ports has come down, but inventory levels will need to drop as well before they can get back to normal levels of efficiency. Unlike what we see in over-the-road trucking, Union Pacific is anticipating growth in 2022, with carloads up 3% in 2022 from 2021[23].
This lack of capacity has pushed Transportation Prices into their fourth consecutive month of contraction (which followed two years of expansion), with the metric falling (-2.3) to 42.2. This is the lowest reading for this metric since April 2020, suggesting that the last time Transportation Prices fell this quickly was when the world was essentially shut down. Despite this, UPS announced in October that it will match FedEx, increasing its annual tariff rates by 6.9% in 2023. This is a far cry from the general increase of 4.9%, or even 2022’s higher-than-usual 5.9% rate hike, as carriers increase prices to stay ahead of inflation. Interestingly, UPS also announced they would be dropping “peak” from their delivery surcharge pricing in what some are seeing as an indication that UPS expects “peak-level” volumes to become more of a year-round status quo[24]. This comes against the background of UPS reporting positive third-quarter results, with revenue up 4.2% year over year. This growth was driven primarily by package delivery, while B2C and B2B volumes were actually down slightly year over year. That being said, they expect a bump in the fourth quarter[25]. Finally, just as we observe with Warehousing Utilization, the rate of growth for Transportation Utilization is down significantly to 52.8 (-8.3) from September’s reading of 61.1. This is actually back in line with previous readings and suggests that the sudden increase seen in the utilization metrics in September was supply chains pushing goods downstream to position them closer to consumers ahead of Q4.
We noted in last month’s report that many of our metrics slowed down in the second half of September, which suggested that the overall index’s move back into the 60’s may have been fool’s gold. That theory seems to be borne out with this month’s lower numbers. Not only that, but we are seeing a repeat of this dynamics in the breakdown of responses from early October (the first to the seventeenth, represented by the gold bars) relative to late October (the eighteenth to thirty-first). Many of the metrics, including the overall index slowed in the second half of the month. Much like last month, we see a statistically significant increase in the availability of Transportation Capacity in the second half of the month. This suggests that more and more fleets are idling as we move deeper into Q4 – something that is highly unusual for this time of year.
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. Six of the eight metrics show signs of growth. Warehousing Capacity has now tightened for 26 consecutive months, and Transportation Prices are down for the fourth consecutive month. Utilization growth rates have dipped as Inventory Levels slow their rates of growth and are positioned downstream in anticipation of Q4 sales. We should also note once again that this is the fastest rate of growth ever observed for our Transportation Capacity metric, highlighting the extreme downshift we have seen in transportation demand over the last few months. If there is to be an increase in consumer activity sometime this year we would expect this to change in November and December. At the moment however, that change – while still possible – is far from a certainty.
This month, Downstream firms (orange bars) reported significantly faster rates of Inventory Level growth than their Upstream counterparts (blue bars). While there is no statistical significance, we should also note that Inventory Costs and Warehousing Prices are higher, and available Warehousing Capacity is lower for Downstream firms. This is likely reflective of the high amount of inventories currently being held by retailers in anticipation of consumer activity in Q4. We have observed the inventory slowly trickling down from Upstream suppliers to Downstream retailers over the last few months, and now much of it finally appears to be within the downstream systems. Downstream firms seem to be the locus of much of the logistics activity in October, as all three Transportation metrics, while still slow, show a bit more life at the Downstream level. Retailers are clearly bursting with inventory and have prepared themselves for Q4 spending, whether or not that spending will show up remains an open question.
Respondents were asked to predict movement in the overall LMI and individual metrics 12 months from now. Their predictions for future ratings are presented below. Similar to what we observed in August, September’s future predictions hint at normalization and a return to business as usual over the next year. Respondents are predicting a greater level of relief in Warehousing Capacity (58.3) than they have in months. While we see hints of moderation across all cost/price metrics, Warehousing Prices are predicted to remain in the 70’s, indicating significant growth, while Transportation Prices are predicted to just barely increase at 50.4. Transportation Capacity may remain elevated (65.3) as carriers look to fill the millions of truckloads of excess capacity currently on hand. Finally, respondents have finally grown optimistic regarding moderations Inventory Levels, hoping to work through the backlog and come out with a future growth rate of 60.4 – which would be within only a few points of the all-time average for the metric, representing a return to “normal” after the roller coaster of the last three years.
The exact nature of the future predictions varies by supply chain position[26]. In October we observe significant difference in anticipated Inventory Costs and Transportation Utilization over the next year. In a reverse from what we often see, Upstream firms are anticipating a faster rate of growth for Inventory Costs over the next 12 months, whether this is a symptom of costs not being able to raise more than the high levels we already see downstream, or a prediction replenishment once Upstream inventories have finally run down remains to be seen. While it is not statistically significant, we see that Warehousing Prices are also higher for Upstream firms, which goes along with what we see with inventories. For future Transportation Capacity, it is Downstream respondents leading the charge. Their prediction for a significantly higher rate of growth in this metric may be indicative of continued faith in consumer demand, and the ever-expanding role of transportation-intensive ecommerce in overall retail spending.
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®
After one month back above 60.0 the overall LMI has dropped back into the 50’s again, reading in at 57.5 (-3.9) in October. Along with the continuing softness in the transportation market, this decline is due to a dip in Inventory Levels, and a large decline in Warehousing Utilization – particularly Upstream – as goods are filtered Downstream towards retailers in anticipation, or perhaps just hope, of Q4 consumer spending. Casting shadows over any potential spending increase is the all-time high level of Transportation Capacity growth observed in October. It is possible that goods are simply already in place and did not need to be moved, but it is still highly unusual to see so much unused capacity in what is usually the busiest time of the year.
Respondents seem to expect a muted rate of expansion over the next 12 months, predicting a growth rate of 55.2, down (-1.0) from September’s prediction of 56.2. All future components other than Transportation Prices (which at 49.5 are predicted to essentially remain flat) are predicted to grow over the next year, with the cost of inventories and warehousing leading the way. This rate of growth would be down significantly from what we have seen since the start of 2020 and might suggest a “return to normal” for the logistics industry.
After one month back above 60.0 the overall LMI has dropped back into the 50’s again, reading in at 57.5 (-3.9) in October. Along with the continuing softness in the transportation market, this decline is due to a dip in Inventory Levels, and a large decline in Warehousing Utilization – particularly Upstream – as goods are filtered Downstream towards retailers in anticipation, or perhaps just hope, of Q4 consumer spending. Casting shadows over any potential spending increase is the all-time high level of Transportation Capacity growth observed in October. It is possible that goods are simply already in place and did not need to be moved, but it is still highly unusual to see so much unused capacity in what is usually the busiest time of the year.
Respondents seem to expect a muted rate of expansion over the next 12 months, predicting a growth rate of 55.2, down (-1.0) from September’s prediction of 56.2. All future components other than Transportation Prices (which at 49.5 are predicted to essentially remain flat) are predicted to grow over the next year, with the cost of inventories and warehousing leading the way. This rate of growth would be down significantly from what we have seen since the start of 2020 and might suggest a “return to normal” for the logistics industry.
Inventory Levels
The Inventory Level value is 65.5, down (-6.4) from September’s reading of 71.9, and significantly below (-14.1) the all-time high value of 80.2 recorded in February. This is however the lowest rate of growth recorded since December of 2021, when the inventory issues that have plagued firms through 2022 first began to crop up. Even with the decline, the current reading is above the all-time average value for this metric of 62.8, suggesting that while the inventory issues may be improving, they are certainly not over. A potential reason for this dip is that wholesalers and distributors are pushing goods down to retailers. This month, Downstream respondents reported greater inventory growth by 9.8 pts, (72.1 vs 62.3). The same thing was observed last month, when downstream respondents reported greater inventory growth by 6.7 pts, (75.5 vs 68.8).
When asked to predict what conditions will be like 12 months from now, the average value is 57.8, down (-2.6) form September’s future prediction of 60.4. This month, Downstream predictions are slightly higher (60.3 vs 56.6). In recent months, we have said it seemed likely the index value may remain high, but will likely continue to decline towards the long-term average. The same prediction would also seem prudent this month. Respondents feel Inventory Levels will continue to grow, but the growth levels will decline in the future. However, if additional increases are made to interest rates, it would not be surprising if inventory levels would decline, at least temporarily.
The Inventory Level value is 65.5, down (-6.4) from September’s reading of 71.9, and significantly below (-14.1) the all-time high value of 80.2 recorded in February. This is however the lowest rate of growth recorded since December of 2021, when the inventory issues that have plagued firms through 2022 first began to crop up. Even with the decline, the current reading is above the all-time average value for this metric of 62.8, suggesting that while the inventory issues may be improving, they are certainly not over. A potential reason for this dip is that wholesalers and distributors are pushing goods down to retailers. This month, Downstream respondents reported greater inventory growth by 9.8 pts, (72.1 vs 62.3). The same thing was observed last month, when downstream respondents reported greater inventory growth by 6.7 pts, (75.5 vs 68.8).
When asked to predict what conditions will be like 12 months from now, the average value is 57.8, down (-2.6) form September’s future prediction of 60.4. This month, Downstream predictions are slightly higher (60.3 vs 56.6). In recent months, we have said it seemed likely the index value may remain high, but will likely continue to decline towards the long-term average. The same prediction would also seem prudent this month. Respondents feel Inventory Levels will continue to grow, but the growth levels will decline in the future. However, if additional increases are made to interest rates, it would not be surprising if inventory levels would decline, at least temporarily.
Inventory Costs
The current Inventory Costs index value represents a slight increase after a recent downward trend. The value of 80.9 is up (+3.7) from September’s reading of 77.2. Recent months were a steady decline from the record high value in March, and remain above the long-term average of 74.9. Given the high Inventory Levels index value, it is not surprising that Inventory Costs remain high. The value is down 5.0 points from the value last year, but up 7.4 points compared to two years ago.
Given the high inventory levels seen above, it seems quite likely that Inventory Costs will continue to rise, but at a lower rate. Responses from participants are consistent with this prediction, and predict strong increases in inventory costs. Last month, Downstream respondents were a slight 0.9 points higher than upstream (65.3 vs 66.2), giving an average value of 66.1. This month, however, Upstream respondents expect much higher Inventory Cost growth, by 12.5 points, (72.8 vs 60.3). Downstream respondents expect inventory cost growth exactly in line with their expectations of Inventory Level growth, but Upstream respondents expect Inventory Cost growth 16.2 points higher than the Inventory Level growth. Perhaps Upstream respondents have more dire concerns about the impact of interest rates. Downstream respondents certainly seem less concerned about costs, potentially indicating they believe levels will continue coming down post-Q4
The current Inventory Costs index value represents a slight increase after a recent downward trend. The value of 80.9 is up (+3.7) from September’s reading of 77.2. Recent months were a steady decline from the record high value in March, and remain above the long-term average of 74.9. Given the high Inventory Levels index value, it is not surprising that Inventory Costs remain high. The value is down 5.0 points from the value last year, but up 7.4 points compared to two years ago.
Given the high inventory levels seen above, it seems quite likely that Inventory Costs will continue to rise, but at a lower rate. Responses from participants are consistent with this prediction, and predict strong increases in inventory costs. Last month, Downstream respondents were a slight 0.9 points higher than upstream (65.3 vs 66.2), giving an average value of 66.1. This month, however, Upstream respondents expect much higher Inventory Cost growth, by 12.5 points, (72.8 vs 60.3). Downstream respondents expect inventory cost growth exactly in line with their expectations of Inventory Level growth, but Upstream respondents expect Inventory Cost growth 16.2 points higher than the Inventory Level growth. Perhaps Upstream respondents have more dire concerns about the impact of interest rates. Downstream respondents certainly seem less concerned about costs, potentially indicating they believe levels will continue coming down post-Q4
Warehousing Capacity
The October 2021 Warehousing Capacity index of the LMI came in at 44.7, reflecting a negligible 0.36-point change from September’s reading of 44.3. This reflects a nearly 3-point decrease from the reading one year ago, and an increase of 4.5 points from the reading from 2 years ago. Consistent with previous versions of the report, the Upstream average capacity is higher than the Downstream (a difference of XYZ), potentially reflecting a rebalancing of inventory to retail shelves from further up points in the supply chain. This, however, is at odds with utilization rates (more on this below). In addition, the increasingly punishing inflationary environment, coupled with the head winds the U.S. and global economy are facing could be forcing caution into the warehousing market, such that new capacity is not likely to come online
Looking forward at the next 12 months, respondents continue to expect moderate rates of growth, predicting an expansionary rate 62.0, which is up (+3.7) from September’s future prediction of 58.3. Despite the optimism that some capacity may come online, respondents are still seem to be expecting cost increases (as we will see below).
The October 2021 Warehousing Capacity index of the LMI came in at 44.7, reflecting a negligible 0.36-point change from September’s reading of 44.3. This reflects a nearly 3-point decrease from the reading one year ago, and an increase of 4.5 points from the reading from 2 years ago. Consistent with previous versions of the report, the Upstream average capacity is higher than the Downstream (a difference of XYZ), potentially reflecting a rebalancing of inventory to retail shelves from further up points in the supply chain. This, however, is at odds with utilization rates (more on this below). In addition, the increasingly punishing inflationary environment, coupled with the head winds the U.S. and global economy are facing could be forcing caution into the warehousing market, such that new capacity is not likely to come online
Looking forward at the next 12 months, respondents continue to expect moderate rates of growth, predicting an expansionary rate 62.0, which is up (+3.7) from September’s future prediction of 58.3. Despite the optimism that some capacity may come online, respondents are still seem to be expecting cost increases (as we will see below).
Warehousing Utilization
The Warehousing Utilization Index registered in at 60.8 for October 2022 reflecting a 16-point decrease from the month prior, a 10.6-point decrease from the reading from one year ago, and an 11.1 point decrease from the reading two years ago. This may be indicative of inventories finally beginning to run down as retailers offload goods through early Q4 sales and events such as Amazon’s second Prime Day. When comparing the Upstream vs. Downstream values on this measure, it seems that utilization is virtually identical (a difference of 2.9 points).
Looking forward at the next 12 months, the predicted Warehousing Utilization index is 63.7, down (-3.3) from September’s future prediction of 67.0. This still represents a health rate of growth and gives further credence to the theory that the continuing high prices will incent firms to continue looking for as many efficiencies as they can with regards to storage space.
The Warehousing Utilization Index registered in at 60.8 for October 2022 reflecting a 16-point decrease from the month prior, a 10.6-point decrease from the reading from one year ago, and an 11.1 point decrease from the reading two years ago. This may be indicative of inventories finally beginning to run down as retailers offload goods through early Q4 sales and events such as Amazon’s second Prime Day. When comparing the Upstream vs. Downstream values on this measure, it seems that utilization is virtually identical (a difference of 2.9 points).
Looking forward at the next 12 months, the predicted Warehousing Utilization index is 63.7, down (-3.3) from September’s future prediction of 67.0. This still represents a health rate of growth and gives further credence to the theory that the continuing high prices will incent firms to continue looking for as many efficiencies as they can with regards to storage space.
Warehousing Prices
Warehousing Prices Index registered 75.5 in October 2022, reflecting a relatively minor 1.1-point increase from the reading last month, a 10.3-point decrease from the reading one year ago, and 3.7 point decrease from the reading two years ago. The Upstream vs Downstream pricing dynamics are virtually identical, with Downstream price increases only 1.5 points higher. The increasing rate at which prices are increasing trend logically with demand, reflected in this report by continued capacity numbers being below the 50-point mark. This month’s decrease in utilization, however, and though still above the 50-point mark, could be a harbinger of things to come. In previous iterations of this report, we’ve noted the 2-3 month lag in the relationship between softening (increasing) and price decreases (increases). That utilization is down, could mean that there is more space coming online, or that demand is beginning to soften. In addition, retailers could be exercising caution with respect to inventory holdings, preparing for a retail holiday season that could be colored with a recessionary economy.
Future predictions suggest that respondents are expecting prices to continue to grow at a rate of 74.0, up (+3.4) from September’s future prediction of 70.6. This is far and away the metric that is predicted to have the greatest rate of growth over the next 12 months, suggesting that even if some warehousing space comes online, the cost of holding inventory close to consumers will continue to be an issue.
Warehousing Prices Index registered 75.5 in October 2022, reflecting a relatively minor 1.1-point increase from the reading last month, a 10.3-point decrease from the reading one year ago, and 3.7 point decrease from the reading two years ago. The Upstream vs Downstream pricing dynamics are virtually identical, with Downstream price increases only 1.5 points higher. The increasing rate at which prices are increasing trend logically with demand, reflected in this report by continued capacity numbers being below the 50-point mark. This month’s decrease in utilization, however, and though still above the 50-point mark, could be a harbinger of things to come. In previous iterations of this report, we’ve noted the 2-3 month lag in the relationship between softening (increasing) and price decreases (increases). That utilization is down, could mean that there is more space coming online, or that demand is beginning to soften. In addition, retailers could be exercising caution with respect to inventory holdings, preparing for a retail holiday season that could be colored with a recessionary economy.
Future predictions suggest that respondents are expecting prices to continue to grow at a rate of 74.0, up (+3.4) from September’s future prediction of 70.6. This is far and away the metric that is predicted to have the greatest rate of growth over the next 12 months, suggesting that even if some warehousing space comes online, the cost of holding inventory close to consumers will continue to be an issue.
Transportation Capacity
The Transportation Capacity Index registered 73.1 percent in October 2022. This is up (+1.3) from September’s reading of 71.8. With this increase, the Transportation Capacity Index reaches an all-time high in the history of the index. Even during the freight recession of 2019, we did not observe capacity coming online this quickly. These issues are slightly less pronounced with retailers as the Upstream index reads in at 73.9 and the Downstream index is at 71.4. Without a significant increase in consumer activity over the holiday season, it is unclear when this will change.
Respondents are not incredibly hopeful for that change to come. The future Transportation Capacity Index also continues to indicate expansion, registering 67.1, up (+1.8) from September’s future reading of 65.3. Upstream firms indicate a future transportation capacity index of 69.4 while downstream firms indicate a future expectation of 62.5. As such, capacity increase expectations remain greater for upstream firms than for downstream firms.
The Transportation Capacity Index registered 73.1 percent in October 2022. This is up (+1.3) from September’s reading of 71.8. With this increase, the Transportation Capacity Index reaches an all-time high in the history of the index. Even during the freight recession of 2019, we did not observe capacity coming online this quickly. These issues are slightly less pronounced with retailers as the Upstream index reads in at 73.9 and the Downstream index is at 71.4. Without a significant increase in consumer activity over the holiday season, it is unclear when this will change.
Respondents are not incredibly hopeful for that change to come. The future Transportation Capacity Index also continues to indicate expansion, registering 67.1, up (+1.8) from September’s future reading of 65.3. Upstream firms indicate a future transportation capacity index of 69.4 while downstream firms indicate a future expectation of 62.5. As such, capacity increase expectations remain greater for upstream firms than for downstream firms.
Transportation Utilization
The Transportation Utilization Index registered 52.8 percent in October 2022. This denotes a retreat of 8.3 points from the 61.1 level registered in September. It looks like the sudden Transportation Utilization increase registered last month was very shortly lived and we are back near the critical level of 50. The Downstream Transportation Utilization Index is at 54.5, while the Upstream index is at 52.1. As such, the data indicates that the drop in transportation utilization index is spread across the supply chain.
The future Transportation Utilization Index is 56.6, which is down (-2.3) from September’s future reading of 58.9. The expectations of future growth are slightly greater for Downstream firms where the future Transportation Utilization index is indicating 62.9 and while the Upstream firms are registering only 53.5.
The Transportation Utilization Index registered 52.8 percent in October 2022. This denotes a retreat of 8.3 points from the 61.1 level registered in September. It looks like the sudden Transportation Utilization increase registered last month was very shortly lived and we are back near the critical level of 50. The Downstream Transportation Utilization Index is at 54.5, while the Upstream index is at 52.1. As such, the data indicates that the drop in transportation utilization index is spread across the supply chain.
The future Transportation Utilization Index is 56.6, which is down (-2.3) from September’s future reading of 58.9. The expectations of future growth are slightly greater for Downstream firms where the future Transportation Utilization index is indicating 62.9 and while the Upstream firms are registering only 53.5.
Transportation Prices
The Transportation Prices Index continues to decrease, registering in at 42.2 in October 2022. This corresponds to a drop of 2.3 percent from the September Transportation Prices reading of 44.5. With this drop the Transportation Prices Index pushes further down and registers a brand new 2-year low. The price index drop is evenly spread across the supply chain, with the Upstream price index at 42.5 and the Downstream transportation price index is at 41.7.
The future index for Transportation Prices dips slightly below the critical 50 level, registering 49.5, indicating continued expectations of relatively flat Transportation Prices for the next year. These price expectations are dispersed across the supply chain with a future Downstream Transportation Prices index at 48.6 and an Upstream future transportation price index at 50.
The Transportation Prices Index continues to decrease, registering in at 42.2 in October 2022. This corresponds to a drop of 2.3 percent from the September Transportation Prices reading of 44.5. With this drop the Transportation Prices Index pushes further down and registers a brand new 2-year low. The price index drop is evenly spread across the supply chain, with the Upstream price index at 42.5 and the Downstream transportation price index is at 41.7.
The future index for Transportation Prices dips slightly below the critical 50 level, registering 49.5, indicating continued expectations of relatively flat Transportation Prices for the next year. These price expectations are dispersed across the supply chain with a future Downstream Transportation Prices index at 48.6 and an Upstream future transportation price index at 50.
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 dale.rogers@asu.edu 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, Rochester Institute of Technology 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 dale.rogers@asu.edu 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, Rochester Institute of Technology 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.
Notes
[1] Fairless, T. (2022, October 28). German Economy Shows Surprise Strength Ahead of Expected Recession. WSJ. https://www.wsj.com/articles/german-economy-shows-surprise-strength-ahead-of-expected-recession-11666951211
[2] Hannon, P., & Hufford, A. (2022, October 24). Global Economic Growth Is Weighed Down by Inflation, Rising Interest Rates. WSJ. https://www.wsj.com/articles/europes-economy-contracts-as-tough-winter-looms-11666608770
[3] Casselman, B. (2022, October 27). U.S. Economy Returned to Growth in Third Quarter. The New York Times. https://www.nytimes.com/2022/10/27/business/economy/us-economy-gdp.html
[4] Bureau of Labor Statistics. (2022, October 7). Employment Situation Summary—2022 Q03 Results. U.S. Bureau of Labor Statistics Employment Situation Summary. https://www.bls.gov/news.release/empsit.nr0.htm
[5] Guilford, G. (2022, October 13). Inflation Sits at 8.2% as Core Prices Hit Four-Decade High. WSJ. https://www.wsj.com/articles/us-inflation-september-2022-consumer-price-index-11665628037
[6] Timiraos, N. (2022, October 21). Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes. WSJ. https://www.wsj.com/articles/fed-set-to-raise-rates-by-0-75-point-and-debate-size-of-future-hikes-11666356757
[7] Palmer, A. (2022b, October 27). Amazon stock sinks 12% on weak fourth-quarter guidance. CNBC. https://www.cnbc.com/2022/10/27/amazon-amzn-earnings-q3-2022.html
[8] Palmer, A. (2022a, October 14). Amazon shoppers shrug off second Prime Day sale. CNBC. https://www.cnbc.com/2022/10/14/amazon-shoppers-shrug-off-second-prime-day-sale.html
[9] Berger, P. (2022a, October 8). Choked-Up Yards and Trailer Shortages Box In America’s Truckers. Wall Street Journal. https://www.wsj.com/articles/choked-up-yards-and-trailer-shortages-box-in-americas-truckers-11665226803
[10] Berger, P., & Page, P. (2022, October 18). Freight Operators’ Peak Shipping Season Is Crumbling. Wall Street Journal. https://www.wsj.com/articles/freight-operators-peak-shipping-season-is-crumbling-11666118281
[11] Berger, P. (2022c, October 21). Southern California’s Notorious Container Ship Backup Ends. Wall Street Journal. https://www.wsj.com/articles/southern-californias-notorious-container-ship-backup-ends-11666344603
[12] Miller, G. (2022, October 28). Shipping rates are no longer plunging. Is ‘new normal’ near? FreightWaves. https://www.freightwaves.com/news/shipping-rates-no-longer-plunging-is-new-normal-near
[13] DC Velocity Staff. (2022, October 25). Survey: Warehouse productivity driven more by worker well-being than automation and KPIs | DC Velocity. DC Velocity. https://www.dcvelocity.com/articles/55817-survey-warehouse-productivity-driven-more-by-worker-well-being-than-automation-and-kpis
[14] Supply Chain Brain. (2022a, October 19). Industrial Robot Installations at an “All-Time High”—Half a Million in One Year | SupplyChainBrain. Supply Chain Brain. https://www.supplychainbrain.com/articles/35896-industrial-robot-installations-at-an-all-time-high-half-a-million-in-one-year
[15] Supply Chain Brain. (2022b, October 26). Amazon Workers Strike Amid Allegations of Crackdown on Unionization Activities | SupplyChainBrain. Supply Chain Brain. https://www.supplychainbrain.com/articles/35953-amazon-workers-strike-amid-allegations-of-crackdown-on-unionization-activities
[16] Young, L. (2022a, October 11). Warehouses Get a Makeover as Companies Seek to Appeal to Workers. Wall Street Journal. https://www.wsj.com/articles/warehouses-get-a-makeover-as-companies-seek-to-appeal-to-workers-11665504974
[17] Solomon, M. (2022d, October 25). UPS posts solid Q3 results, avoids dreaded FedEx read-through. FreightWaves. https://www.freightwaves.com/news/ups-posts-solid-q3-results-avoids-dreaded-fedex-read-through
[18] Young, L. (2022b, October 14). America’s Red-Hot Warehouse Market Shows Signs of Cooling. Wall Street Journal. https://www.wsj.com/articles/americas-red-hot-warehouse-market-shows-signs-of-cooling-11665739801
[19] Young, L., & Berger, P. (2022, October 5). Small Businesses Getting Squeezed Out in Push for Warehouse Space. Wall Street Journal. https://www.wsj.com/articles/small-businesses-getting-squeezed-out-in-push-for-warehouse-space-11664962202
[20] Young, L., & Ojea, S. (2022, October 19). Prologis Signals Caution in Industrial-Property Development. Wall Street Journal. https://www.wsj.com/articles/prologis-signals-caution-in-industrial-property-development-11666212055
[21] Berger, P. (2022b, October 12). Logistics Deal Making Falters as Freight Demand Slows. Wall Street Journal. https://www.wsj.com/articles/logistics-deal-making-falters-as-freight-demand-slows-11665591818
[22] Young, L., & Hardison, K. (2022, October 19). J.B. Hunt Expects Weaker Freight Volumes This Holiday Season. Wall Street Journal. https://www.wsj.com/articles/j-b-hunt-expects-weaker-freight-volumes-this-holiday-season-11666140934
[23] Marsh, J. (2022, October 21). Union Pacific upbeat about volume growth despite labor, macroeconomic uncertainties. FreightWaves. https://www.freightwaves.com/news/union-pacific-upbeat-about-volume-growth-despite-labor-macroeconomic-uncertainties
[24] Solomon, M. (2022b, October 23). UPS hikes 2023 GRI by 6.9%, matching FedEx. FreightWaves. https://www.freightwaves.com/news/ups-hikes-2023-gri-by-6-9-matching-fedex
[25] Solomon, M. (2022d, October 25). UPS posts solid Q3 results, avoids dreaded FedEx read-through. FreightWaves. https://www.freightwaves.com/news/ups-posts-solid-q3-results-avoids-dreaded-fedex-read-through
[26] Note that not all respondents identify their industry, so some responses are missing from the Upstream/Downstream calculations.
[1] Fairless, T. (2022, October 28). German Economy Shows Surprise Strength Ahead of Expected Recession. WSJ. https://www.wsj.com/articles/german-economy-shows-surprise-strength-ahead-of-expected-recession-11666951211
[2] Hannon, P., & Hufford, A. (2022, October 24). Global Economic Growth Is Weighed Down by Inflation, Rising Interest Rates. WSJ. https://www.wsj.com/articles/europes-economy-contracts-as-tough-winter-looms-11666608770
[3] Casselman, B. (2022, October 27). U.S. Economy Returned to Growth in Third Quarter. The New York Times. https://www.nytimes.com/2022/10/27/business/economy/us-economy-gdp.html
[4] Bureau of Labor Statistics. (2022, October 7). Employment Situation Summary—2022 Q03 Results. U.S. Bureau of Labor Statistics Employment Situation Summary. https://www.bls.gov/news.release/empsit.nr0.htm
[5] Guilford, G. (2022, October 13). Inflation Sits at 8.2% as Core Prices Hit Four-Decade High. WSJ. https://www.wsj.com/articles/us-inflation-september-2022-consumer-price-index-11665628037
[6] Timiraos, N. (2022, October 21). Fed Set to Raise Rates by 0.75 Point and Debate Size of Future Hikes. WSJ. https://www.wsj.com/articles/fed-set-to-raise-rates-by-0-75-point-and-debate-size-of-future-hikes-11666356757
[7] Palmer, A. (2022b, October 27). Amazon stock sinks 12% on weak fourth-quarter guidance. CNBC. https://www.cnbc.com/2022/10/27/amazon-amzn-earnings-q3-2022.html
[8] Palmer, A. (2022a, October 14). Amazon shoppers shrug off second Prime Day sale. CNBC. https://www.cnbc.com/2022/10/14/amazon-shoppers-shrug-off-second-prime-day-sale.html
[9] Berger, P. (2022a, October 8). Choked-Up Yards and Trailer Shortages Box In America’s Truckers. Wall Street Journal. https://www.wsj.com/articles/choked-up-yards-and-trailer-shortages-box-in-americas-truckers-11665226803
[10] Berger, P., & Page, P. (2022, October 18). Freight Operators’ Peak Shipping Season Is Crumbling. Wall Street Journal. https://www.wsj.com/articles/freight-operators-peak-shipping-season-is-crumbling-11666118281
[11] Berger, P. (2022c, October 21). Southern California’s Notorious Container Ship Backup Ends. Wall Street Journal. https://www.wsj.com/articles/southern-californias-notorious-container-ship-backup-ends-11666344603
[12] Miller, G. (2022, October 28). Shipping rates are no longer plunging. Is ‘new normal’ near? FreightWaves. https://www.freightwaves.com/news/shipping-rates-no-longer-plunging-is-new-normal-near
[13] DC Velocity Staff. (2022, October 25). Survey: Warehouse productivity driven more by worker well-being than automation and KPIs | DC Velocity. DC Velocity. https://www.dcvelocity.com/articles/55817-survey-warehouse-productivity-driven-more-by-worker-well-being-than-automation-and-kpis
[14] Supply Chain Brain. (2022a, October 19). Industrial Robot Installations at an “All-Time High”—Half a Million in One Year | SupplyChainBrain. Supply Chain Brain. https://www.supplychainbrain.com/articles/35896-industrial-robot-installations-at-an-all-time-high-half-a-million-in-one-year
[15] Supply Chain Brain. (2022b, October 26). Amazon Workers Strike Amid Allegations of Crackdown on Unionization Activities | SupplyChainBrain. Supply Chain Brain. https://www.supplychainbrain.com/articles/35953-amazon-workers-strike-amid-allegations-of-crackdown-on-unionization-activities
[16] Young, L. (2022a, October 11). Warehouses Get a Makeover as Companies Seek to Appeal to Workers. Wall Street Journal. https://www.wsj.com/articles/warehouses-get-a-makeover-as-companies-seek-to-appeal-to-workers-11665504974
[17] Solomon, M. (2022d, October 25). UPS posts solid Q3 results, avoids dreaded FedEx read-through. FreightWaves. https://www.freightwaves.com/news/ups-posts-solid-q3-results-avoids-dreaded-fedex-read-through
[18] Young, L. (2022b, October 14). America’s Red-Hot Warehouse Market Shows Signs of Cooling. Wall Street Journal. https://www.wsj.com/articles/americas-red-hot-warehouse-market-shows-signs-of-cooling-11665739801
[19] Young, L., & Berger, P. (2022, October 5). Small Businesses Getting Squeezed Out in Push for Warehouse Space. Wall Street Journal. https://www.wsj.com/articles/small-businesses-getting-squeezed-out-in-push-for-warehouse-space-11664962202
[20] Young, L., & Ojea, S. (2022, October 19). Prologis Signals Caution in Industrial-Property Development. Wall Street Journal. https://www.wsj.com/articles/prologis-signals-caution-in-industrial-property-development-11666212055
[21] Berger, P. (2022b, October 12). Logistics Deal Making Falters as Freight Demand Slows. Wall Street Journal. https://www.wsj.com/articles/logistics-deal-making-falters-as-freight-demand-slows-11665591818
[22] Young, L., & Hardison, K. (2022, October 19). J.B. Hunt Expects Weaker Freight Volumes This Holiday Season. Wall Street Journal. https://www.wsj.com/articles/j-b-hunt-expects-weaker-freight-volumes-this-holiday-season-11666140934
[23] Marsh, J. (2022, October 21). Union Pacific upbeat about volume growth despite labor, macroeconomic uncertainties. FreightWaves. https://www.freightwaves.com/news/union-pacific-upbeat-about-volume-growth-despite-labor-macroeconomic-uncertainties
[24] Solomon, M. (2022b, October 23). UPS hikes 2023 GRI by 6.9%, matching FedEx. FreightWaves. https://www.freightwaves.com/news/ups-hikes-2023-gri-by-6-9-matching-fedex
[25] Solomon, M. (2022d, October 25). UPS posts solid Q3 results, avoids dreaded FedEx read-through. FreightWaves. https://www.freightwaves.com/news/ups-posts-solid-q3-results-avoids-dreaded-fedex-read-through