But 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 third-party logistics (3PL) players that are on the receiving end of the surge of imports that have been coming into the United States till 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 by 7.1 points to 61.6.
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) issued this LMI report recently.
The LMI score is a combination of eight unique components that make up the logistics industry, including: inventory levels and costs; warehousing capacity, utilisation and prices; and transportation capacity, utilisation and prices.
Interestingly, transportation prices were up by 3 points to 66.8—the fastest rate of expansion for this metric since April 2022. This also put transportation prices above the all-time average of 65 for this metric for the first time in over 2.5 years.
This is likely a function of the strong consumer sales 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 e-commerce requiring expensive last-mile delivery.
The other five metrics, including all three warehousing metrics, were steadier from November to December last year. Warehousing continues its strong run, with warehousing utilisation (plus 2.8) and warehousing prices (minus 0.8) coming reading in at 61.7 and 68 respectively, signaling strong rates of expansion.
Fibre2Fashion News Desk (DS)