Transportation Prices Declined at a Record Pace in February

FreightWaves is reporting (3-7-23) that transportation prices in February fell at the fastest rate recorded in the six-and-a-half-year history of a monthly survey of supply chain executives.

The Logistic Manager’s Index (LMI)—a collaboration among the University of Arizona, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada Reno conducted in conjunction with the Council of Supply Chain Management Professionals—registered a reading of 36.1 for transportation costs in February. This is 5.9 percentage points lower than in January and below the prior record, which was established in December 2022. Any reading below 50 indicates contraction, while and reading above signals expansion in the transportation industry.

The report notes that the rate of decline was “a little more pronounced in the later portion of the month than it was in the beginning of February.”

“February is generally a low point seasonally due to the consumer spending hangover from the holidays in the US combined with slowness in imports due to Chinese New Year, and that was certainly reflected this year.”

The report also acknowledges that large decline from January was likely tied to severe winter storms in December, which pushed shipments into January, providing a bump in demand and the rate index in January.