[ad_1]
The US logistics managers’ index (LMI) for October was 72.6, 40 basis points higher than that in September, showing transportation and warehouse capacity sank further while transportation utilisation and pricing increased but at a slower rate. The monthly index, designed to measure activity throughout various points in the supply chain in the United States.
The number had been standing above 70 for nine continuous months, which was considered a ‘significant expansion’ in a report released recently.
The LMI, founded in 2016, is a collaboration among Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University and University of Nevada, Reno, conducted in conjunction with the Council of Supply Chain Management Professionals. The index measures key supply chain data from 100 upper-level industry managers in the country to analyse month-to-month changes in warehousing, transportation and inventory.
The US logistics managers’ index (LMI) for October was 72.6, 40 basis points higher than that in September, showing transportation and warehouse capacity sank further while transportation utilisation and pricing increased but at a slower rate. The monthly index, designed to measure activity throughout various points in the supply chain in the United States.
The document, covering all three key components of supply chain management: transportation, warehousing and logistics, noted that the latest number was driven by many factors, including continual growth in cost metrics, and further contraction in available capacity.
Transportation capacity fell further and faster in the month. It had more impacts to the downstream companies than the upstream ones.
The sub-index fell 310 basis points to 34.1, the report said. “Our data indicates that the downward pressure on transportation capacity remains extremely strong for downstream firms in supply chain (downstream transportation capacity index is down to only 27.3).”
The warehouse and inventory sub-indexes reflected an environment where freight continued to flood domestic ports without the capacity required to move or store it.
Warehouse capacity sub-index was 47.6, dipping further in the month, with warehouse prices (85.8) continuing to climb. As the availability of industrial space fell to historically low levels, the prices required to store freight remained stubbornly high.
“Not once in the past two years has this index entered a contraction space, thus the likelihood that prices make a significant drop is highly unlikely,” the report said. “In addition, these pricing dynamics are also driven by overall demand in all parts of the global supply chain. Thus, unless and until aggregate demand for goods decreases, and monumental increases to capacity are seen, these prices are likely to continue their upward trajectory.”
Inventory level grew to 68.1, more so for upstream producers. “Inventory levels are growing 10.3 points faster for upstream respondents – reflecting the difficulty retailers are having building up inventories to sufficiently meet consumer demand,” the report read.
Fibre2Fashion News Desk (DS)
[ad_2]
Source link
