Will rising warehouse and inventory costs feed trucking demand?
Shrinking warehouse capacity makes high inventory levels less economical option for shippers
Chart of the Week: Logistics Managers Index – Inventory Levels, Warehouse Capacity SONAR:LMI.INVC, LMI.WHCP
Inventory costs are growing at the fastest rate in years while warehouse capacity continues to shrink at a near record pace, according to the Logistics Managers Index (LMI). In 2019 shippers crammed warehouses with imports to get around tariffs, coinciding with a slowdown in the freight market. Could rapidly increasing warehousing costs and shrinking warehouse capacity push shippers to keep their freight moving?
The LMI is a diffusion index that measures expansion and contraction rates anything showing a value over 50 is expanding, with sub-50 values indicating contraction. Right now inventory costs are increasing as fast as they have since the index was created in 2016 with a record value of 84.58 in April.
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GSCW: Rough waters ahead Freightonomics
Why the container crisis is far from over for ocean shippers
1 326 1 minute read
Ocean shippers are still battling port congestion, container shortages and high rates without relief in sight. On this episode of Freightonomics during FreightWaves’ Global Supply Chain Week,Zach StricklandandAnthony Smithtalk to Colorado State Assistant Professor Zac Rogers about the woes plaguing maritime shipping.
Rogers cited the latest edition of the Logistics Managers Index in his analysis of the current state of the maritime market. He said all three price metrics in the supply chain are sitting at 28-month highs and have grown consistently through the pandemic.