The Logistics Managers’ Index (LMI) rating for the US in December 2022 increased slightly from the previous month’s reading of 53.6 to 54.6, an increase of 1%, but it was still significantly behind the highs of 2021. Even the slight increase in LMI is a noticeable turnaround because the entire index had decreased in seven of the eight months preceding the reading in December 2022.
Indicative of the divergence seen in December, US inventory levels were significantly greater for downstream than for upstream enterprises (62.8 to 53.3, respectively). According to the most recent LMI research, downstream respondents like retailers essentially maintained larger amounts of inventory and coped with more constrained warehousing as they tried to get goods to consumers in time for the holiday shopping season.
The supply chain’s transportation metrics were poor at every level. The utilisation of the transportation sector fell to 48.1, which is the lowest level since April 2020 and a contraction. The Logistics Managers’ Index’s measurement of transportation prices showed a contraction at a pace of 36.9, which is the fastest rate of contraction seen for this metric in more than six years.
In December, the nation’s warehousing capacity was recorded at 44.7, representing 29 months of decline. The more expensive facilities utilised for last-mile distribution continue to receive regular investment in addition to increased investment in port storage. During the holidays, more retailers used brick-and-mortar businesses as fulfilment centres due to the limited amount of accessible storage space. Due to the large rise in demand, warehousing utilisation increased to 64.1 in December 2022. The cost of warehousing remained high at a rate of 72.1. Despite being lower than the highs seen in 2021 and the beginning of 2022, this is still higher than 70.
The logistics industry is made up of eight distinct components, including inventory levels and costs, warehouse capacity, utilisation, and prices, as well as transportation capacity, utilisation, and prices, which together make up the LMI score. The Council of Supply Chain Management Professionals (CSCMP) and researchers from Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno released this paper on January 3, 2023.
