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According to a recent report compiling sentiment among supply chain managers, February indicated the freight market comeback is in "full-swing."
The Logistics Managers' Index (LMI) is showing rapid transportation price growth. The LMI is a diffusion index where readings above 50 indicate expansion while readings below 50 indicate capacity retraction. February returned a reading of 41 for transportation capacity which is on par with the height of the Covid shipping boom of 2021. Severe winter storms in December and January were an influence but the largest culprit in regards to the shrinking capacity is likely the heightened regulatory enforcement surrounding CDLs.
The report notes transportation prices increased 5.2 points to a level not seen in four years. "It is unclear how changes in tariff policy or the potential for expansion in global conflicts could impact things," it went on to say, "For this moment, however, the high rates of turnover pushed partly by tariffs have led to the most robust freight market in four years."
Logistics managers are anticipating that these conditions will persist and potentially intensify over the next twelve months.
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