Mixed metrics were a key theme of the new edition of the Logistics Manager’s Index (LMI), which was released this week.
The monthly LMI is a joint project among researchers from Arizona State University, Colorado State University, University of Nevada, Reno, Florida Atlantic University, and Rutgers University, and also receives support by Council of Supply Management Professionals (CSCMP). CSCMP. The LMI is written by Zac Rogers Ph.D., Steven Carnovale Ph.D., Shen Yeniyurt Ph.D., Ron Lembke Ph.D., and Dale Rogers Ph.D.
The report’s authors explained that the LMI score, or reading, is based on eight “unique components” within the logistics sector, including: inventory levels and costs, warehousing capacity, utilization and prices and transportation capacity, utilization, and prices.
The January LMI reading, at 59.6, saw a 5.2% gain over December’s 54.2 (an 18-month low), with the report stating that this marks the fastest rate of expansion going back to May 2025, while down annually compared to January 2025’s 62.0. It also marks the 11th consecutive reading below the all-time high reading of 61.3.
“I think the headline for me of the 2026 Logistics Managers Index is that Transportation prices and Inventory costs are substantially higher while the other cost—Warehousing costs— are not,” noted Dr. Dale Rogers. “This poses an interesting question: Are the higher Transportation prices and Inventory costs happening because the economy is getting better? Is it because of inflation? Or, maybe both improving economy and inflation due to tariffs and other issues? Now, sometimes inflation signifies an improving economy, but these increases have to be at least partially about the tariffs.
Warehousing prices are not higher in January than December but instead are close to being the same with only two percentage points different between December and January. That would make sense because the tariffs should not impact warehousing space after the U.S. bled down inventories going into December. The fact that transportation and inventory prices are higher but warehouse prices didn’t really move indicates to me that probably we are seeing inflation that has not yet been picked up at the consumer tier of the supply chain yet.”
Key sub-index readings in the January LMI included:
- Inventory Levels rose 18.8%, to 53.9, expanding, after contracting in December;
- Inventory Costs, at 71.3 (any reading over 70.0 is viewed as significantly expansionary), were up 8.4%, expanding at a faster rate;
- Warehousing Utilization rose 11.6%, to 54.4, contracting after previous contraction in December;
- Warehousing Capacity, at 50.0, decreased 11.2%, for flat growth after expanding in December;
- Warehousing Prices, at 64.8, fell 1.5%, expanding, at a slower rate;
- Transportation Prices headed up 4.8%, to 71.4, expanding, at a faster rate;
- Transportation Capacity was up 10.2%, to 47.1, contracting, at a slower rate; and
- Transportation Utilization, at 58.1, fell 0.1%, expanding, at a slower rate
The report’s authors explained that January’s overall rate of expansion is largely due to a shift back towards milder restocking to start the year, adding that it is lower than last year because the rate of expansion for Inventory Levels is relatively mild compared to what typically occurs in January, when firms are engaged in restocking.
“This is especially notable given that December’s reading was 35.1, which was the lowest ever for this metric,” the report explained. “This suggests that respondents kept with their future predictions from last year and running inventories relatively lean to start the year. This is possibly reflective of the continued high costs. Inventory Costs (+8.4) read in at 71.3, pushing them back above the significant expansion threshold of 70.0 for the 12th out of 13 times. The expansion in inventory is reflected in Warehousing Capacity dropping (-11.2) to 50.0 and no movement. Warehousing Utilization is the mirror image, bouncing back (+11.6) from contraction to expansion at 54.4. Transportation is still tight, although the rate of Transportation Capacity has slowed (+10.9) from 36.9 to a milder rate of 47.1. This continued tightening led to another increase (+4.8) in Transportation Prices, which at 71.4 is expanding more quickly than any time since April of 2022.”
