The March Logistics Managers’ Index (LMI) got here in at 51.1, down -3.6 from February and the bottom studying for the general index within the 6.5-year historical past of the LMI. The March result’s pushed by an all-time low in Transportation Costs, down (-5.0) to 31.1. The LMI rating combines eight distinctive parts of the logistics trade, together with stock ranges and prices, warehousing capability, utilization, and costs, and transportation capability, utilization, and costs. The LMI is calculated utilizing a diffusion index, through which any studying above 50.0 signifies that logistics is increasing; a studying beneath 50.0 signifies a shrinking logistics trade. The newest outcomes of the LMI summarize the responses of provide chain professionals collected in March 2023.
Zac Rogers, Assistant Professor at Colorado State College, says, “ The general financial system continues to be considerably combined. Issues are slower than they’ve been, but it surely doesn’t appear we’re in an official recession. These combined financial messages are epitomized by the LMI’s general index rating of 51.1. That is the slowest charge of development we’ve got ever tracked within the 6.5 years of the index, however it’s nonetheless rising. Issues have been slowing down, however the macroeconomy has not but come to a halt.
Market Watch
All charges cited beneath exclude gasoline surcharges except in any other case famous.
Despite the fact that California outbound state common charges are simply $0.05/mile larger than in 2019, final week’s $0.03/mile improve to $1.82/mile was the primary in 5 weeks. Despite the fact that Los Angeles volumes have been down 5% w/w, capability tightened following final week’s $0.02/mile improve in linehaul charges to $1.55/mile.
Hundreds from Los Angeles to Seattle at $2.26/mile have been $0.12/mile larger than in March, whereas hundreds to Stockton have been primarily flat at $2.50/mile, the bottom within the earlier 12 months. Hundreds to Phoenix, one other warehouse market that has obtained larger import volumes during the last two years, have been additionally at their lowest in 12 months at $2.22/mile. That’s $1.36/mile decrease than in 2022. In close by Ontario, the biggest dry van market within the state, the identical pattern was noticed – volumes down however charges up $0.02/mile to $1.66/mile.
On the East Coast in Elizabeth, NJ, outbound capability tightened barely following a $0.01/mile improve in outbound charges to $1.44/mile, reversing a three-week slide. Hundreds 900 miles south to Atlanta, at $1.20/mile, have been the bottom in 12 months, with an analogous pattern for hundreds west to Columbus, OH, at $1.32/mile. In different main markets, capability loosened in Atlanta, the place linehaul charges dropped $0.02/mile to $1.64/mile on a 13% decrease quantity. The identical pattern was reported in Chicago, the place charges fell for the fourth week to $2.00/mile following final week’s $0.03/mile lower.
Load-to-Truck Ratio (LTR)
Volumes dropped by 19% final week, which isn’t uncommon following the standard end-of-month and quarter delivery surge noticed in the course of the prior week. Extra regarding is how shut the dry van spot market is to this time in 2020, trending 2% beneath the corresponding week. Capability loosened barely following a 2% w/w improve in gear posts ensuing within the dry van load-to-truck ratio (LTR) reducing by 20% w/w from 2.01 to 1.60, barely above 2019.
Linehaul Spot Charges
Declining spot market volumes and growing capability continued the slide in linehaul charges following final week’s $0.02/mile lower. At $1.66/mile, spot charges proceed to trace closest with 2019 at round $0.11/mile larger. Primarily based on the amount of hundreds moved the common charge for the highest 50 dry van lanes was $0.20/mile larger at $1.86/mile final week.
