US supply chain pressures ease as transportation capacity grows

From Freight Waves.

Activity across the supply chain grew at a healthy clip during April but the pace of growth slowed to the lowest level recorded since January 2021, according to a monthly survey released Tuesday. A decline in transportation metrics, notably an increase in transportation capacity, provided the catalysts.

The Logistics Managers’ Index (LMI), a measure of supply chain conditions, registered a reading of 69.7 in April, down 6.5 percentage points from March’s record. The index remained above its all-time average of 65.3.

The LMI is a diffusion index, wherein a reading above 50 indicates expansion while a reading below 50 indicates contraction.

The transportation capacity subindex came in at 56.9, 11.2 percentage points higher than the March reading and a return to expansion for the first time since May 2020. The growth rate was higher for upstream wholesalers and distributors (59.1) than downstream companies close to the end consumer (53.8).

“The trend line now takes a marked U shape, as capacity increases in April 2022 begin to resemble growth rates during the early stages of lockdown in April 2020,” the report read.

Twelve-month forward-looking sentiment from survey participants indicated the index will be at 62.4 a year from now, with upstream companies expecting more slack in supply than those downstream.

See the complete article online at Freight Waves.