While the new edition of the Logistics Manager’s Index (LMI), which was published this week, again pointed to growth, it was at a reduced level compared to previous months, coupled with some inventory-related readings that will require a watchful eye going forward.
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 August LMI reading, at 66.6 (a reading above 50 indicates growth is occurring), expanded, at a slower rate, and was off 2.2% from July’s 68.9 and 4.4% below the recent four-year peak of 71.1, in June—which marked the first time the LMI topped the 70-mark since March 2022’s 76.2 reading. The report attributed the sequential LMI reading to declining Inventory Levels, which was also the case in its previous edition.
Most of the LMI’s key metrics were mixed:
- Inventory Levels, at 52.8, decreased 2.2%, expanding, at a slower rate, with the report noting that the reading is “close to no movement”;
- Inventory Costs, at 78.6, increased 1.6%, expanding, at a slower rate, marking the second-fastest rate of expansion in 12 months, with the report noting that Inventory Cost expansion is now outstripping the growth rate in Inventory Levels by 25.8%, nearly double to average delta of 13.1% between the two metrics;
- Warehousing Capacity, at 53.5, up 7.2%, expanding, after contracting in July, for its fastest rate of expansion on a year-to-date basis;
- Warehousing Utilization, at 59.6, decreasing 6.5%, expanding, at a slower rate;
- Warehousing Prices, at 75.0, fell 0.5%, expanding, at a slower rate, seeing gains despite additional capacity coming online;
- Transportation Capacity, at 40.0, fell 28.4%, contracting, at a slower rate;
- Transportation Utilization, at 70.6, rose 5.6%, expanding, at a slower rate;
- Transportation Prices, at 90.0, increased 3.1% expanding, at a slower rate, despite additional capacity coming online; and
- Aggregate Logistics Costs, at 243.6, were up 4.1%, expanding, at a slower rate
“Despite this being the lowest level for the overall index since April, it is still much higher than the LMI readings from both one (+7.3) and two (+10.2) years ago,” the report observed. “The index has clearly been impacted by the conflict with Iran as the average of 69.0 in the five months since the war far outstrips the more modest average reading of 58.5 from the previous five months.”
Addressing Aggregate Logistics Costs, Dr. Zac Rogers noted in a LinkedIn post that Aggregate Logistics Costs from March to August in 2026 average 241.9, which he called another statistically significant step up. The reason for that, he explained, is that, generally, aggregate costs exceeding 240.0 have led to increased levels of supply-driven inflation.
“The San Francisco Federal Reserve’s breakout of the sources of inflation points to increased supply-driven inflation (outstripping inflation from demand) in July,” wrote Rogers. “Essentially, we’re seeing that disruptions in the form of tariffs and oil shocks are contributing directly to supply inflation. The challenge with supply inflation is that there’s not much the Federal Reserve can do about it. Interest rates are more targeted at demand, which seems to be less or a problem right now (consumer retail spending actually dipped a bit in July). One half of the Fed’s mandate is to curtail inflation. However, I’m a bit concerned that the only tool they have is a hammer, and this problem isn’t really a nail.”
