Economic growth in logistics slowed for a second straight month in August, marked by cooling inventory levels and rising cost pressures, according to the latest Logistics Managers’ Index (LMI) report, released this week.
The LMI was 66.6 in August, down more than two points from July’s reading of 68.9 and more than four points from June’s four-year peak of 71.1.
The LMI is a monthly measure of economic activity across warehousing and transportation markets based on a survey of U.S. logistics managers. An LMI reading above 50 indicates expansion across the industry; a reading below 50 indicates contraction.
The August slowdown stems from slower growth in inventory levels, which fell more than two points to a reading of 52.8. Companies across the industry had built up inventories in June and have since eased back, driven largely by upstream firms that reported mild contraction (49.0) in inventory levels in August, the LMI researchers said in their monthly report.
Costs pressures intensified during the month, as well, and reflect the effects of recent tariffs and the conflict in the Middle East. The LMI’s three cost indices continued to show “very robust growth” in August, according to the report: Inventory Costs rose nearly two points to 78.6, their second-fastest rate of expansion in 12 months; Warehousing Prices continued to rise, reaching a reading of 75.0; and Transportation Prices rose more than three points to a reading of 90.0.
“Essentially, this month’s report paints a picture of logistics costs that seem to be rapidly increasing no matter what the underlying situation is,” the researchers wrote.
The LMI is based on a monthly survey of logistics managers from across the country. It tracks industry growth overall and across eight areas: inventory levels and costs; warehousing capacity, utilization, and prices; and transportation capacity, utilization, and prices. The report is released monthly by researchers from 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).
Logistics Managers' Index
Facts Only
* The Logistics Managers’ Index (LMI) for August was 66.6.
* The July LMI reading was 68.9.
* The June LMI reading was 71.1.
* An LMI reading above 50 indicates industry expansion; below 50 indicates contraction.
* August inventory levels reached a reading of 52.8.
* Upstream firms reported an inventory level reading of 49.0 in August.
* Inventory Costs rose to 78.6.
* Warehousing Prices reached 75.0.
* Transportation Prices rose to 90.0.
* LMI researchers attribute cost increases to recent tariffs and conflict in the Middle East.
* The LMI is produced by Arizona State University, Colorado State University, Rochester Institute of Technology, Rutgers University, and the University of Nevada, Reno, with the Council of Supply Chain Management Professionals.
* The index tracks eight areas: inventory levels and costs, warehousing capacity, utilization, and prices, and transportation capacity, utilization, and prices.
Executive Summary
Economic growth in the U.S. logistics sector slowed for the second consecutive month in August, with the Logistics Managers’ Index (LMI) dropping to 66.6 from July's 68.9. While the industry remains in a state of expansion—as any reading above 50 indicates growth—the pace of that expansion is decelerating from a four-year peak seen in June.
This slowdown is primarily attributed to a cooling of inventory levels, particularly among upstream firms, which reported a mild contraction. Simultaneously, the industry is facing intensifying cost pressures. Transportation, warehousing, and inventory costs are all seeing robust growth, driven by the impacts of recent tariffs and conflict in the Middle East. The current environment presents a paradox where logistics costs are rising rapidly despite a deceleration in overall industry growth and inventory accumulation.
Full Take
The strongest version of this narrative is that the logistics sector is entering a "cost-push" phase where exogenous geopolitical shocks (tariffs and Middle East conflict) are decoupling price increases from actual demand or inventory growth. It presents a data-driven snapshot of a tightening margin environment for supply chain managers.
The narrative is straightforward and avoids manipulative framing. It relies on a multi-institutional index rather than a single corporate source, and the conclusions regarding cost increases are supported by specific index readings.
Patterns detected: none
The underlying paradigm here is one of fragility. It assumes that global logistics is a reactive system, where localized political conflicts and trade policy shifts immediately translate into systemic cost increases regardless of domestic inventory health. This echoes the historical pattern of "bullwhip effects," where small fluctuations in demand or cost at one end of the chain create amplified volatility further up.
The implication is a transfer of cost. When logistics costs rise "no matter what the underlying situation is," these expenses are typically passed down to the end consumer or absorbed by the smallest players in the chain, eroding the viability of low-margin businesses.
Bridge Questions:
1. To what extent are these cost increases permanent structural shifts versus temporary geopolitical spikes?
2. If inventory levels continue to contract while costs rise, at what point does the LMI drop below the 50-point contraction threshold?
Counterstrike Scan: A coordinated campaign to trigger market panic would weaponize these numbers to suggest an imminent stagflationary collapse in the supply chain. The current presentation remains a neutral data summary and does not align with that attack pattern.