In June, a monthly supply chain survey reported a neutral reading for transportation capacity, marking the first time in over two years that the index did not expand. Meanwhile, sentiment regarding transportation pricing indicated growth for the second consecutive month.
The Logistics Managers’ Index (LMI) showed a capacity reading of 50 in June, unchanged from the previous month. This was the first time since March 2022, just before the onset of the freight recession, that the capacity index did not grow. The June capacity subindex decreased by 7.3 percentage points compared to May.
The LMI, which tracks eight key components of the supply chain, uses a diffusion index where a reading above 50 signifies expansion and below 50 indicates contraction.
Transportation pricing recorded a reading of 61, up by 3.2 points from the previous month and reaching its highest level since June 2022. The pricing index has been in expansion mode for five of the last six months, closing June 14.5 points higher than the beginning of the month.
For the second consecutive month, the pricing subindex exceeded the capacity subindex, typically signaling growth in the freight market.
The report noted a decline in the transportation utilization subindex to 55.7, down 3.5 points in June. Upstream firms, such as manufacturers and wholesalers, reported a higher reading of 59.2 compared to downstream firms, including retailers, which posted a reading of 46.2.
Looking forward, the one-year outlook for capacity (43.6) indicated expectations for contraction, while the outlook for pricing (79.8) was firmly in expansion territory.
While cautious about declaring the end of the freight recession that has persisted since spring 2022, the report suggested that if current trends continue, including the anticipated peak season, the market could transition into a growth phase.
Additional charts and data from SONAR highlighted trends in truck capacity and spot rates, reflecting ongoing dynamics in the transportation sector.