Growth in transportation capacity accelerated in August while price increases slowed, a sentiment survey revealed on Tuesday.
The Logistics Managers’ Index, a monthly poll of supply chain executives, returned a 56.7 reading for transportation capacity in August, 5.8 percentage points higher than in July and the highest reading since May. (The LMI is a diffusion index in which a reading above 50 indicates expansion while one below 50 signals contraction.)
The report said the heightened view on capacity could be tied to smaller carriers coming back to the market as rates improve and given the expectation for a seasonal lift in freight demand.
“The signs of new life in the freight market, along with anticipation of the traditional jump in demand that follows the Labor Day holiday, are likely causing some of the capacity that had been sidelined over the past two years to re-enter the market, accounting for the mild increase in available capacity,” the report stated.