While showing sequential growth, the April 2025 edition of the Logistics Manager’s Index (LMI), which was recently released, continued to reflect the ongoing market uncertainty, driven, in large part by trade and tariff-driven activity and policies.
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 April LMI reading, at 58.8, marks a 1.6% increase over March’s 57.1 (the lowest reading since August 2024), with the report’s authors calling it a slight uptick, which was preceded by a 5.6% decrease, from February to March. And it added that the April reading is in line with readings seen over the fourth quarter 2024, with the caveat that “factors leading to this score, as well as the dynamics of the overall economy, have shifted noticeably since then.” What’s more, in a previous edition, the report’s authors explained that the sweet spot for the macroeconomy is when the LMI is in the high-50s range, observing that solid growth remains intact—with the caveat that it is not crazy growth, which can be viewed as disruptive.
“April’s readings were characterized by the somewhat confounding forces of slowing Inventory Level buildups (-4.2 to 57.1) and costs increasing across the board,” the report’s authors said. “The aggregate logistics cost measure (and aggregation of Inventory Costs, Warehousing Prices, and Transportation Prices) was up (+22.0) to 210.1 in April,” the report’s authors said. “Over half of these cost increases were due to the jump (+11.2) in Warehousing Prices to 72.3. This dynamic is due to the accumulation of inventories that were built up through the first quarter of 2025 as firms pushed to stay ahead of tariffs. We now see that this buildup is slowing, and inventories are becoming static, with slow movements and high storage costs. Future predictions from respondents suggest that this will continue at the retail level, with Downstream firms predicting overall index expansion of 67.9 – significantly higher than Upstream expectations of 57.7.”
The LMI noted that the rush in inventory was the main reason first quarter U.S. GDP fell 0.3%, mainly paced by the gap between imports and exports, with imported goods up 50.9% in the first quarter, with shippers focused on making efforts to avoid potential tariffs. And it added that this is the most that the trade deficit has affected GDP since 1947. Which the report said was apparent in the form of economic uncertainty and consumer sentiment, down 8% from February to March, and down 32.4% annually and down 32% since January.
As for the impact of tariffs on logistics operations, the LMI said that it is being felt everywhere, with Chinese exports up 12% annually in March.
The increase in exports drove Chinese GDP to increase 5.4% in Q1, up slightly from the 5% growth it enjoyed during 2024,” it said. “The EU also saw their own increase in exports to the U.S., helping their economy grow by 1.4% in Q1, which is above expectations. It seems unlikely that this global export expansion can continue post-tariffs. Chinese shipments to the U.S. dipped in April, and the Chinese Manufacturing PMI dropped (-1.5) to contraction at 49.0 – its lowest reading in 16 months. Some factories in the Guangzhou region of China have temporarily closed due to the lack of clarity around tariffs and potential orders from U.S. customers. Much as the U.S. has diversified away from China as a supplier, China has diversified away from the U.S. as a customer.”
Please click here to read the April Logistics Manager’s Index.
