On January 7, researchers at Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University, and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals (CSCMP) released the December Logistics Manager’s Index. The Index was 57.3, down (-1.1) from November’s reading of 58.4. This slowdown in logistics activity is due to the seasonal wind-down in inventory levels, which dropped (-6.1) to 50.0 or “no change”.
However, the organizations that compile this index said the no change designation does not tell the entire story. Inventory levels actually increased, reading in at 57.9, for upstream firms like manufacturers, wholesalers, and 3PLs that are on the receiving end of the surge of imports that have been coming into the U.S. through December.
Conversely, downstream retailers are reporting significant contractions in inventory levels at 33.9, which is what should be happening in December during the holiday shopping season. The reduction in inventory levels also led to a drop in the rate of growth for warehousing capacity (-7.1) to 61.6.
However, transportation prices are up (+3.0) to 66.8 which is the fastest rate of expansion for this metric since April of 2022. This also puts transportation prices above the all-time average of 65.0 for this metric for the first time in over 2.5 years. “This is likely a function of the strong consumer sales we have seen throughout the second half of 2024. There has been higher demand for transportation services to move goods, this was particularly pronounced in December due to the record levels ecommerce requiring expensive last-mile delivery,” the report said.
The other five metrics, including all three warehousing metrics, were steadier from November to December. Warehousing continues its strong run, with Warehousing Utilization (+2.8) and Warehousing Prices (-0.8) coming reading in at 61.7 and 68.0 respectively, signaling strong rates of expansion.
