17 Jun 2022 -

Logistics industry: slowing, but demand strong and warehouses ‘packed to the gills’

shipping cost increase

The logistics economy grew last month, but cooled from its rapid pace of the past two years, due primarily to moderation in transportation markets, according to the latest Logistics Manager’s Index report (LMI).

The downward shift over the past two months may signal a return to more modest growth levels following two years of strong expansion across the industry. LMI researchers said transportation loosened during the month as more capacity came online and prices decreased, helping to relieve some pressure.

“Despite this slowdown, it should be noted that we are still observing a healthy rate of growth in transportation, but one that pales in comparison to the unsustainable growth rates observed in 2021,” the researchers wrote in a press release detailing the results Tuesday.

Inventory levels remain unseasonably high, “packing warehouses to the gills and driving costs up for both inventory and warehousing,” the researchers said. 

“For the moment, supply chains are flush with inventory which is keeping inventory and warehousing metrics high, while transportation continues to rebalance,” according to the report.

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