Logistics activity accelerated in September

Logistics activity grew September, driven by tight warehousing and transportation capacity and marked by high costs that continue to pressure supply chains.

That’s according to the latest Logistics Managers’ Index (LMI) report, released this week. The LMI score for September was 70.2, up 3.6 points from August to reach its highest level in four years.

An LMI reading above 50 signals expansion across the industry, and a reading below 50 signals contraction. A reading above 70 indicates a “significant rate of expansion,” according to the LMI researchers; expansion equates to strong demand for logistics services nationwide.

Inventory levels grew at a faster rate in September compared to July and August, which drove up costs and contributed to tightening warehouse capacity. The LMI’s warehousing capacity index saw its fastest rate of contraction in four years, sinking to 39.3. Most of that inventory is sitting upstream, with wholesalers, and waiting to make its way to retailers for holiday peak season, a process that typically occurs in mid-October. Inventory costs rose to a reading of 79.9, the third-highest reading in two years.

This story was originally published by Supply Chain Quarterly. Read the full story at Supply Chain Quarterly →