September, a shipping boom month, looks like a shipping slump this year

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

Not this year.

Latest Logistics Managers Indexwhich tracks inventory levels, warehouse costs, transportation capacity and pricing, shows the lowest reading ever recorded for transportation utilization in September.

The strong growth typically seen due to shipments of holiday goods, “we’re not seeing that,” said Dale Rogers, a professor in the Department of Supply Chain Management at Arizona State University and one of the LMI’s authors.

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 services are expanding; A reading below 50.0 indicates contraction in the logistics industry.

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

Rogers says the fundamental data is consistent with a lower growth rate for future freight logistics orders and High inventoryWhich increases warehouse prices. and what he described as a “slight negative reversal in shipping” that began in August and continued into September. He added that while transport prices are still expanding, this is “barely” the case.

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

Headwinds are most evident in companies involved at the top of the supply chain, where raw materials are sourced, acquired and transported to manufacturing facilities, he said. Upstream companies reported a very marginal expansion in transportation rates at 51.4.

“Respondents at the manufacturing and wholesale levels were relatively stagnant in terms of new inventories because many of them loaded merchandise early in the year,” Rogers said.

Based on LMI data, many… Products are pre-loaded before tariffs Still in warehouse. Now, front-loaded items drive up costs. Warehouse capacity is limited, pushing inventory levels above 54.2, resulting in higher inventory costs.

Rogers noted that there was no need for trucking from the warehouse to the store or the consumer, based on the Transportation Utilization Index reading, which fell to a baseline of 50.0, “indicating no movement.”

The average September transportation use reading over the past eight years for the labor market index is 65.1, indicating a steady growth rate.

Transport rates remain above water for now, and typical seasonality suggests downstream activity will remain high through the rest of 2025, Rogers said. But he says it’s too early to say whether this will prevent the freight market from falling back into recession, or whether the latest data suggests the logistics sector’s decline has already begun. The trade war and periodic rushes in shipping before new tariffs are imposed have caused atypical patterns within the economy, from sharp changes in GDP readings to delayed inflation risks.

Traditionally, Rogers said this index trend should continue for at least three months before it begins to be seen as an indication of an actual recession in the shipping sector. The September results mark the second straight month of negative sentiment data.