Global logistics growth slowed down in April.
The LMI, a composite of eight key logistics factors, fell more than 6 points in April, indicating that the sector is slowing down. According to the latest report from Logistics Manger’s Index (LMI), the global logistics sector continued to record growth in April, but at the slowest rate in 14 months.
Logictics Manger’s Index is a research group consisting of professors and experts from universities in the US in the field of logistics in conjunction with the Council of Supply Chain Management Professionals (CSCMP).
Every month, the unit will collect the answers of more than 100 experts about the movements and trends of the logistics industry through 8 key indicators including inventory levels, inventory costs, storage capacity, warehouse utilization efficiency, transportation capacity, transportation efficiency and transportation costs.
These indicators are aggregated and expressed through the general index LMI. Accordingly, if the LMI is above 50 points, it will show that the logistics industry is developing and vice versa.
At the end of April, the LMI stopped at 69.7, down 6.5 points from the record peak of 75.2 points in March. This is also the first time this index has dropped below 70 points. since the beginning of the year. The LMI remains above 70 points, showing the remarkable growth of the industry.
Specifically, the report stated that the transportation capacity of the logistics industry is witnessing an improvement, when this index increased for the first time in nearly 2 years, adding nearly 11 points to 56.9 points. Meanwhile, transportation costs tended to decrease, dropping nearly 16 points from March to 73.9 points.
According to researcher Zac Rogers, associate professor of supply chain management at Colorado State University (USA), the LMI decline in the past month may indicate that the market is adjusting in a more sustainable direction, with moderate growth.
Although the industry as a whole is still developing at a high rate, he believes that it is unreasonable for the shipping capacity to shrink in the past long time and the market shift is inevitable. The last time the shipping capacity index increased was in May 2020.
On the other hand, the inventory and storage indexes in LMI did not change much, as costs continued to rise and the storage capacity was limited. The inventory level index in April fell more than 3 points from the previous month to 72.3 points, the inventory capacity index increased from 36.1 to 40.8 points. Meanwhile, inventory cost only decreased slightly from 91 points to 87.7 points in the same period.
The main reason is attributed to the disruption of the global supply chain, causing inventories to continue to increase and costs to become increasingly expensive.
