September, shipping boom month, looks like freight recession this year
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September is a key month for shipping ahead of the holiday season, a boom in freight business and the supply chain, with products often moving from warehouses to stores or consumers.
Not this year.
Latest Logistics Managers DirectoryIt marks the lowest reading it has ever recorded for transportation usage in September, which tracks inventory levels, warehouse costs, transportation capacity and pricing.
Strong growth typically seen due to shipments of holiday products, “we’re not seeing that,” said Dale Rogers, a professor in the department of supply chain management at Arizona State University and an LMI co-author.
The LMI score is a combination of eight key metrics covering storage, transportation and inventory in the logistics supply chain. Any reading above 50.0 indicates logistics are expanding; A reading below 50.0 is indicative of a shrinking logistics industry.
The Logistics Managers Index was at 57.4, down 1.9 points from August and its lowest reading since March.
Rogers said underlying data corresponds to a declining growth rate for future freight logistics orders and increased inventory, which increases warehouse pricing. What he described as a “slight negative charge reversal” that began in August continued into September. The official added that transportation prices were still expanding, meaning “barely.”
“This is the lowest growth rate we have tracked for this metric since April 2024, the last month of the most recent freight recession,” Rogers said. he said.
Headwinds are most evident in companies located upstream of the supply chain, where raw materials are sourced, acquired and transported to production facilities. Upstream firms reported very marginal transportation price expansion at 51.4.
“Participants at the manufacturing and wholesale level have been relatively sluggish in terms of new inventory because many of them were front-loaded goods earlier in the year,” Rogers said. he said.
Based on LMI data, most of the front-loaded products before tariffs are still in warehouses. Now, front-loading products are driving up costs. Warehouse capacity is tight, pushing inventory levels above 54.2, leading to higher inventory costs.
Trucking from warehouse to store or consumer is not required, Rogers said, based on the index transportation usage reading falling to the 50.0 baseline.
The average reading for transport use in September over the last eight years of the LMI is 65.1, indicating a steady rate of growth.
Transportation prices remain above water for now, and typical seasonality will show increased downstream activity through the remainder of 2025, Rogers said. However, he says it is too early to tell whether this will prevent the freight market from returning to recession or whether the latest data points to a logistics industry downturn. The trade war and periodic shipping booms to head off new tariffs have caused atypical patterns within the economy, from sharp changes in GDP readings to risks of lagging inflation.
Traditionally, Rogers said, this index trend must continue for at least three months before it starts to be considered an indicator of a true freight recession. September results mark the second consecutive month of negatively trending data.
