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The rate of growth for a number of logistics activities
dropped significantly in November and December, surprising business experts, who say the fourth quarter has historically been a time of rising business activity driven by the
holiday peak retail season. While logistics industry activity is
still expanding, that trend slowed down in December to an
index value of 64.65 from its November level of 66.66 and
October level of 69.01, according to the most recent version
of the “Logistics Manager’s Index” (LMI), released Jan. 10.
The LMI is a monthly measure of economic activity
in eight areas: inventory levels and costs; warehousing
prices, capacity, and utilization; and transportation prices,
Launched in 2016, the report is
issued by researchers at Arizona
State University, Colorado State
University, Rochester Institute of
Technology, Rutgers University,
and the University of Nevada, Reno, in conjunction with
the Council of Supply Chain Management Professionals
(CSCMP).
The December edition of the LMI revealed that growth
continued across the logistics sector that month, but at a considerably slower rate than it had throughout most of 2018,
according to the survey’s authors. Specifically, the numbers
show a significant drop in the rates of growth for transportation prices (down 8. 2 points), transportation utilization
(down 6. 6 points), and inventory costs (down 7. 9 points).
“While most of the logistics components are still grow-
ing, the rate of growth substantially slowed down this past
month,” Dale Rogers, a business professor at Arizona State
University and co-founder of the LMI, said in a release
announcing the findings of the November report—the first
to record a reversal in the index’s direction. “This slowdown
marks an interesting change. We do not know if this is a
one-time occurrence, or if it is the beginning of a downward
trend.”
Measuring logistics activity is an effective way of predicting
the direction of the broader economy because it shows exact-
ly how much inventory businesses are moving and
Logistics Manager’s Index finds
growth rate slowed in Q4
p. 22
