Business & Investment

Logistics industry growth reaches its highest level in two years

Logistics is further complicated by high prices and tight capacity across the warehousing and transportation markets as supply chain congestion and delays continue around the world. This is due to data from the latest Monthly Logistics Manager Index (LMI) report. Released today.

The LMI in March reached a high of 72.2 in two years, demonstrating continued economic expansion across the logistics industry, driven by a recovery from the pandemic. An LMI above 50 indicates an expansion and a LMI below 50 indicates a contraction of the market. LMI researchers cited inventory costs, warehousing and shipping utilization, warehousing and shipping prices, and inventory level increases in March. All of these are factors that contribute to the awkward and expensive market, especially for shippers. ..

Zac Rogers, an LMI researcher and assistant professor of supply chain management at Colorado State University, said: .. LMI’s March shipping price index rose nearly 3 points to 90.6, the highest level since June 2018. On the other hand, transportation capacity fell by nearly 8 points to 30.4, the lowest level since September last year. Warehouse prices rose 2.5 points during the month to 81.5, the highest level in LMI history. Meanwhile, warehouse capacity reached 43.3., shrinking for the seventh straight month.

Citing LMI’s Forecast Index, Rogers said, “I don’t think capacity will loosen any further next year … and I think prices will remain high,” respondents fill the capacity gap in the market. He said he continued to put pressure on him. Demand for both transportation and warehousing.

LMI researchers quoted late March Blockage of the Suez Canal As the main cause of ongoing logistics congestion around the world. The effects of the incident are expected to be felt for months as shipping companies scramble to make up for the lost time and shippers deal with delays. They said the truck market will continue to feel pressure. Backlog of ordered but unproduced trucks High levels could continue due to a shortage of semiconductors, a growing factor in automobile and truck production. Ironically, LMI researchers said this month that a lack of capacity in the logistics market is negatively impacting semiconductor production, undermining its ability to bring new capacity to the logistics market, creating a negative feedback loop in the short term. Is written. “It will be difficult to break,” they said.

“We are really close to the peak capacity of existing logistics systems,” Rogers said. “Cars and trucks are very smart … [the industry] Slow introduction of them due to bottlenecks caused by semiconductors [shortages].. ”

The March LMI 72.2 was slightly higher than the February 71.4 reading, a significant increase from the March 2020 reading of 58.9.

LMI tracks growth across the logistics industry and across eight areas. Inventory level and cost. Warehouse capacity, utilization, and price. Transportation capacity, utilization rate, price. This report is published monthly by researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, in collaboration with the Supply Chain Management Professional Council (CSCMP).

visit LMI website Participate in the monthly survey.

Logistics industry growth reaches its highest level in two years Logistics industry growth reaches its highest level in two years

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