Various factors, including the Iran conflict and subsequent increase in fuel prices and the ongoing impact of tariffs, are expected to lead to further supply chain uncertainty and higher inflation. That was a key theme of the new edition of the Logistics Manager’s Index, 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 February LMI reading, at 61.5, rose 1.9% over January’s 59.6, marking the fastest rate of expansion going back to February 2025, when it came in a 62.8. It also snapped an 11-month stretch of monthly LMI readings below the all-time average of 61.3.
Key sub-index readings in the February LMI included:
- Inventory Levels fell 0.1%, to 53.8, expanding, at a slower rate;
- Inventory Costs, at 67.8 (any reading over 70.0 is viewed as significantly expansionary), fell 3.5%, expanding at a slower rate;
- Warehousing Utilization 5.9%, to 60.3, expanding, at a faster rate;
- Warehousing Capacity, at 50.0, was flat;
- Warehousing Prices, at 62.6, fell 2.1%, expanding, at a slower rate;
- Transportation Prices headed up 5.2%, to 76.7, expanding, at a faster rate;
- Transportation Capacity was down 6.0%, to 41.0, contracting, at a slower rate; and
- Transportation Utilization, at 61.9, rose 3.8%, expanding, at a faster rate
The report’s authors explained that in February 2025, companies stocked up heavily on inventory (64.8) to get ahead of tariffs, adding that by February 2026, they shifted to a lean inventory strategy (53.8) to avoid tariff-related costs. This change slowed inventory cost growth (from 77.3 in 2025 to 67.8 in 2026. However, it also shifted pressure elsewhere in the supply chain: Warehousing prices grew faster in 2025 (77.0) due to larger inventories, though they still increased in 2026 (62.6); Transportation capacity became tighter in 2026 (41.0 vs. 55.1 in 2025); and Transportation prices rose significantly in 2026 (76.7 vs. 65.5 in 2025) because of higher inventory turnover and more frequent shipping.
“While this represents a dramatic shift in both supply chain strategies and asset utilization, the goals of both strategies have been the same—optimize cashflow,” the report noted. “Tariffs have led to significant uncertainty over the last year. The way supply chains have adapted to this uncertainty is nothing short of impressive. With the recent ruling by the U.S. Supreme Court, it seems likely this uncertainty will continue through 2026. It will be interesting to continue observing the effects of this on logistics activity.”
