Transportation capacity up again in May; prices still climbing

From Freight Waves.

Transportation capacity expanded for a second straight month in May after falling for nearly two years, according to a monthly survey. Overall activity in the supply chain remained firm during the month.

The Logistics Managers’ Index (LMI), a measure of overall supply chain conditions, dipped 2.5 percentage points from April to 67.1 in May. A reading above 50 indicates expansion while a reading below 50 indicates contraction.

The transportation capacity subindex jumped 7.8 points to 64.7. That was the sharpest rate of expansion in the data since October 2019, “as the logistics industry continues its regression towards the mean after nearly two years of rapid growth,” the report read.

The index is now 20.3 points higher than the February reading. The change is evident in FreightWaves’ Outbound Tender Reject Index. Loads being rejected by carriers have fallen to just 9% compared to readings north of 20% throughout 2021.

The capacity situation, however, has been bifurcated by carrier size. Small carriers dependent on load boards for freight have seen fundamentals tank as lower spot rates have been met by rising costs, notably fuel. Conversely, large fleets are still seeing contractual rate increases and many management teams say they could use additional drivers and equipment.

See the complete article online at Freight Waves.