Transportation reduction slowed in January, according to supply chain data, while the monthly Logistics Managers' Index (LMI) survey shows a slowdown in price declines from December.
The prices subindex registered a reading of 42 in January. A level below 50 indicates contraction while one above signals expansion. The January change rate for prices was the closest to break even in three months and 5.1 percentage points higher than in December. However, the index still sits near two-year lows.
Transportation utilization was up 8.9 points to 57, the highest level since September when inventories were being moved from wholesalers to retailers in advance of the holiday buying season. Transportation capacity (70.2), however, continued to expand by a healthy clip, remaining near all-time highs.
Many carriers are forecasting a recovery in demand by summer.
The overall LMI logged in at 57.6 in January, three points higher than in December. This was the second straight increase for the index after falling seven of eight months.
Inventories are much lower now than they were in Q3 of last year, and it seems the supply chains are coming back to life with the goal of replenishment.
Inventory levels (62.5) expanded again in the month, up 5.2 points sequentially. However, the reading was 8.6 points lower year over year and in line with the level recorded in January 2021.
