Transportation capacity again grew faster than pricing in September, according to a monthly survey of supply chain professionals.
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The Logistics Managers’ Index – a diffusion index in which a reading above 50 indicates expansion while one below 50 signals contraction – registered a 55.1 reading for available transportation capacity in September. That was a 2.2 percentage point decline from August but still represented a faster growth rate than the transportation pricing index (54.2).
The Tuesday report termed the occurrence as a “negative freight inversion.”
“In the past, anytime we have seen three consecutive months of either a positive or negative inversion it has signaled a significant shift in the transportation market,” the report said. “This is not a prediction of a freight recession, but that would change if these dynamics remain on their current trajectory.”
The latest take on transportation prices was the lowest since April 2024.
Transportation utilization (50) declined 4.7 points to the lowest reading since November 2023 and the lowest-ever reading for any September. (The average September reading for the eight-year-old dataset is 65.1.)
Upstream manufacturers and wholesalers reported a 51.4 reading on transportation prices for the month. That was nearly 10 points lower than their downstream (retailer) counterparts, who reported 61.1 as they prepare goods for the holiday shopping season.
“Seasonality would predict that Downstream activity will remain elevated through the rest of 2025,” the report said. “Whether this will enough to prop up the freight market (as it was in late 2018 when we saw similar dynamics) remains to be seen.”
Survey respondents returned a slightly inflationary one-year-forward forecast of 51.4 for transportation capacity. Prices are expected to be higher one year from now, but the anticipated growth rate fell 5.2 points to 66.7.
Overall inventories (55.2) fell 3.1 points, pushing inventory costs (75.5) 3.7 points lower. Inventory costs were nearly 6 points higher for retailers.
Warehousing capacity (51.6) expanded 1.1 points even as utilization (65.3) stepped 3.2 points higher. Warehouse prices (66) slid 6.3 points during the month. The report said a sustained period of rising warehouse costs has forced some companies to reverse prior plans to insource operations.
The overall LMI (57.4) was down 1.9 points to the lowest level since March. This was the seventh straight month the index was below an all-time average of 61.5. The index was a little stronger in the back half of the month, registering a 60.5 reading.
Cost inflation across the supply chain is slowing. The three cost indexes (transportation prices, warehousing prices and inventory costs) saw the slowest growth rate since March.
The LMI is a collaboration among Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University and the University of Nevada, Reno, conducted in conjunction with the Council of Supply Chain Management Professionals.
