August LMI Shows Transportation Prices Rise Despite Shrinking Capacity
The August Logistics Managers' Index (LMI) highlights a growing disconnect in the freight market, where transportation capacity continues to contract with an index reading of 40—well below the expansion threshold—but prices are rising sharply. This trend reflects carriers’ efforts to regain profitability after years of low rates and is expected to persist for at least the next year. Transportation utilization hit a robust growth level of 70.6, indicating strong demand despite limited capacity. The overall LMI came in at 66.6, down slightly from July but still showing strength compared to previous August readings over the past three years. Meanwhile, manufacturing activity remained resilient with an ISM PMI reading of 54.6 and new orders continuing expansion for eight months straight. Julie Van de Kamp notes that carriers are pushing rates higher due to financial pressures and a need to reinvest in operations. Looking ahead, key metrics such as the Sonar Tender Rejection Index (STRI), Truckload Volume Index (STVI), and National Truckload Index (NTI) will be critical for tracking market shifts.
Topics: capacity contraction LMI index logistics price surge supply chain