September, typical boom month for shipping, looks more like freight recession this year

September, typical boom month for shipping, looks more like freight recession this year


Lorado | E+ | Getty Images

September, a key month for shipping ahead of the holiday season, is usually a boom one inside the freight business and supply chain, with products moving from warehouses to stores or consumers.

Not this year.

The latest Logistics Managers’ Index, which tracks inventory levels, warehouse costs, transportation capacity, and pricing, shows the lowest reading it has ever recorded for transportation utilization in the month of September.

The strong growth usually seen due to shipments of holiday merchandise, “we are not seeing that,” said Dale Rogers, a professor in the supply chain management department at Arizona State University and one of the authors of the LMI.

The LMI score is a combination of eight key metrics in the logistics supply chain covering warehousing, transportation, and inventory. Any reading above 50.0 indicates that logistics is expanding; a reading below 50.0 is indicative of a shrinking logistics industry.

The Logistics Managers’ Index was at 57.4, down 1.9 points from August, and at its lowest reading since March.

Rogers says the underlying data corresponds to a declining rate of growth for future freight logistics orders and rising inventory, which increases warehouse pricing. What he described as a “slight negative freight inversion” that began in August continued in September. And he added that while transportation prices are still expanding, that is “barely” the case.

“This is the lowest rate of growth we have tracked for this metric since April 2024, which was the last month of the most recent freight recession,” Rogers said.

The headwinds are most clearly seen in the companies involved in the upstream part of the supply chain, he said, where raw materials are sourced, acquired, and transported to manufacturing facilities. Upstream firms reported very marginal transportation price expansion at 51.4.

“Respondents at the manufacturing and wholesale level have been relatively stagnant in terms of new inventories because so many of them front-loaded goods early in the year,” Rogers said.

Based on the LMI data, a lot of the front-loaded products ahead of the tariffs are still in the warehouses. Now, frontloaded items are racking up costs. Warehouse capacity is tight, and pushed inventory levels over 54.2, leading to higher inventory costs.

Truck transportation from the warehouse to the store or consumer is not needed, based on the index transportation utilization reading, which declined to the baseline of 50.0, “which indicates no movement,” Rogers noted.

The average reading for transportation utilization in September over the last eight years of the LMI is 65.1, indicating a steady rate of growth.

Transportation prices remain above water for now, Rogers said, and typical seasonality would suggest that downstream activity remains elevated through the rest of 2025, according to Rogers. But he says it is too soon to say whether this will keep the freight market from falling back into recession, or if the latest data is signaling a logistics sector downturn has already begun. The trade war and periodic bursts of shipping to get ahead of new tariffs have caused atypical patterns within the economy, from sharp changes in GDP readings to delayed risks of inflation.

Traditionally, Rogers said this index trend would need to continue for at least three months before it can begin to be considered as an indicator of an actual freight recession. The September results mark the second month in a row of negative-leaning data.

How droughts are severely impacting traffic at the Panama Canal



Source

Oracle stock slips 5% on report company is seeing thin cloud margins from Nvidia chips
World

Oracle stock slips 5% on report company is seeing thin cloud margins from Nvidia chips

The Stargate AI data center under construction in Abilene, Texas, US, on Tuesday, Sept. 23, 2025. Stargate is a collaboration of OpenAI, Oracle and SoftBank, with promotional support from President Donald Trump, to build data centers and other infrastructure for artificial intelligence throughout the US. Kyle Grillot | Bloomberg | Getty Images Oracle stock slipped […]

Read More
The price of gold reached ,000 an ounce for the first time ever
World

The price of gold reached $4,000 an ounce for the first time ever

Fake gold bars piled up in Clermont-Ferrand France on March 25 2025. Romain Costaseca | Afp | Getty Images Gold prices hit $4,000 for the first time Tuesday as investors seek a safe haven from geopolitical volatility, economic uncertainty and stubborn inflation. Gold futures were last trading at $4,005.80 per ounce. Prices have gained more […]

Read More
WTO hikes global trade forecast for 2025 — but next year doesn’t look so good
World

WTO hikes global trade forecast for 2025 — but next year doesn’t look so good

A cargo ship sits outside of the Port of Elizabeth marine terminal seen from Bayonne, New Jersey, U.S., April 9 2025. Shannon Stapleton | Reuters The World Trade Organization on Tuesday hiked its forecast for global trade growth in 2025 but warned that the outlook for 2026 had deteriorated. In its latest “Global Trade Outlook […]

Read More