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Industry Updates

June Saw a ‘Comeback.’ Tomorrow is ‘Anyone’s Guess’

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The logistics industry in June performed at the highest levels seen in months, according to a monthly index. The Logistics Managers’ Index (LMI) report found growth increased in inventory levels, warehousing utilization, warehousing prices, transportation utilization and transportation prices last month.

The report noted that growth was less robust for inventory costs, while warehousing capacity and transportation capacity contracted.

“The reopening of the economy has clearly played a role here, with downstream
firms reporting a significant surge in retail on-hand,” said the LMI’s
authors. “This, combined with the already high levels of stock, have
driven up inventory metrics, and put an unprecedented premium in the history of
the LMI on warehousing space.”

The LMI is the work of researchers at Arizona State University, Colorado
State University, Rochester Institute of Technology, Rutgers University and the
University of Nevada, Reno, in conjunction with the Council of Supply Chain
Management Professionals (CSCMP).

The report noted the June numbers represented a “comeback” for the
transportation sector. However, its authors added, “With the new round of
COVID-19 outbreaks and the potential to re-shutter portions of the economy,
whether or not this upswing will continue is anyone’s guess. For the moment,
however, the LMI is reporting growth levels not seen since late 2018.”

The June LMI score was 61.7, up from its all-time low overall score of 51.3
in April.

“The increase in the overall LMI has been partially driven by
increasing inventory levels,” according to the report’s summary.
“Upstream firms continue to have large stores of stock on-hand; however,
downstream retailers have greatly increased their stores of goods … This
growth is almost certainly driven by the partial-to-full reopening of the
economy.”

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