October 12, 2019

Logistics sector growth holds steady in September

Industry growth continues its slow pace, but activity is down considerably from a year ago, according to latest Logistics Manager's Index.

By DC Velocity Staff

Economic activity in the logistics sector continued its slow pace of growth in September, according to the latest Logistics Manager's Index (LMI) report, released this week.

The LMI registered 56.6 in September, which was even with August, but down considerably from its September 2018 reading of 70.8. An LMI reading above 50 indicates growth in the logistics sector; a reading below 50 indicates contraction. LMI researchers pointed to marginal growth in the transportation prices index and growth in warehousing capacity during the month, noting that overall industry conditions call for continued slow growth ahead.

The LMI's transportation prices index registered 50.6 in September, up from August's reading of 48.9. Despite the increase, LMI researchers said the change indicates that transportation prices are remaining steady, overall. Looking ahead, however, they said logistics managers surveyed for the September report expect transportation prices to increase over the next 12 months. 

The research also showed that warehousing capacity increased for the first time since June, registering 54.4 compared to last month's reading of 50. Researchers said the increase could indicate expansion in preparation for the busy holiday season.

Although the overall LMI held steady at 56.6, it marks the second lowest score in the history of the index and continues a slowing trend that began in April, when the index dipped below 60 for the first time. 

"The lowest seven scores in the history of the index have all occurred within the last seven months," LMI researchers said in a statement announcing the monthly results. "Every score has been above 50, which indicates growth in the logistics industry, [but] the growth has just been very slow."

The LMI tracks logistics industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released each month by researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in conjunction with the Council of Supply Chain Management Professionals (CSCMP).

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