August LMI: Capacity at 40, Yet Prices Soar. Why This Disconnect?

The August Logistics Managers Index (LMI) reveals a paradoxical situation in the freight market: capacity continues to decline, yet prices are increasing. This discrepancy creates a challenging landscape for carriers attempting to achieve profitability. Julie Van de Kamp provides an analysis of the latest PMI and LMI data, examining key indicators like new orders, customer inventories, and transportation utilization.

Experts anticipate that pricing pressures will persist over the next 12 months, signaling a need for carriers to restore profitability after years of depressed rates. The transportation price index climbed by 3.1 points to 90 in August, surpassing previous August readings of 55, 61, and 42 for 2025, 2024, and 2023, respectively.

In contrast, the capacity index improved by 11 points to 40 in August, marking the slowest contraction in six months, but remains below the 50-expansion threshold.