US' logistics industry sees slight growth in December 2022

US’ inventory Levels were much higher for downstream than for upstream firms (62.8 to 53.3 respectively), which is indicative of the split observed in December. Essentially, downstream respondents such as retailers held higher levels of inventory and dealt with more limited warehousing as they pushed to get goods to consumers for holiday shopping, according to the latest LMI report.

Transportation metrics were weak across all levels of the supply chain. Transportation utilisation was down to 48.1, marking the first time it has dipped into contraction territory since April 2020. Transportation prices contracted at a rate of 36.9, which is the sharpest rate of contraction measured for this metric in over six years of the Logistics Managers’ Index.

The country’s warehousing capacity read in at 44.7 in December, marking 29 consecutive months of contraction. In addition to more investment in port storage, there continues to be consistent investment around the more expensive facilities used for last-mile delivery. Given the tightness in available warehousing capacity, an increased number of retailers utilised brick-and-mortar stores as fulfilment centres during the holidays. This high demand led warehousing utilisation to increase significantly to 64.1 in December 2022. Warehousing prices remained elevated at a rate of 72.1. This is down from the highs observed in 2021 and early on in 2022, but it is still above 70.

The LMI score is a combination of eight unique components that make up the logistics industry, including: inventory levels and costs, warehousing capacity, utilisation, and prices, and transportation capacity, utilisation, and prices. Researchers at Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, and in conjunction with the Council of Supply Chain Management Professionals (CSCMP) issued this report on January 3, 2023.

ALCHEMPro News Desk (DP)