The Logistics Managers’ Index (LMI) for December 2025 dropped to its lowest point since April 2024, according to researchers from Florida Atlantic University and four other institutions. The latest reading of 54.2 marks a decline from December 2024’s score of 57.3. A score above 50 indicates industry expansion, while a score below 50 signals contraction.
This marks the tenth consecutive month that the LMI has fallen below its all-time average. Inventory levels saw a significant decrease, dropping by 17.4 points to reach 35.1, which is the largest month-to-month drop recorded during the holiday shopping season. Warehousing utilization also declined to 42.9, while warehousing capacity increased by 6.4 points to reach 61.2.
Transportation utilization rose by 6.7 points to reach 58.2, and transportation prices increased by 1.8 points to hit their highest level since January 2025 at 66.7.
Steven Carnovale, Ph.D., associate professor of supply chain management in FAU’s College of Business, said: “The rapid and historic decrease in inventory levels is likely due to strong holiday sales (as reported by credit card processing companies), coupled with previously high inventory levels.” He added: “At a high level, the strong sales are a good sign; the lingering question is which segment of the consumer market is buying. Recent reporting suggests high earners are driving significant sales, whereas lower earners have stagnated and shifted to necessary spending only.”
The logistics sector often acts as an early signal for broader economic changes; disruptions such as port congestion or transportation delays can indicate upcoming economic stress before it appears in other metrics.
The LMI survey collects data from director-level and higher supply chain executives across eight components: inventory levels, inventory costs, warehousing capacity, warehousing utilization, warehousing prices, transportation capacity, transportation utilization, and transportation prices.
Researchers from Arizona State University, Colorado State University, Rutgers University, and the University of Nevada Reno collaborated with FAU on calculating the LMI using a diffusion index approach.
Looking forward over the next year, supply chain professionals expect mild expansion in both inventory levels and costs as retailers replenish after holiday sales; these costs may be influenced by tariffs. Transportation capacity is predicted to contract further due to increasing demand and driver shortages.
Carnovale commented on future trends: “The shift in the future trend shows a few key points. Upstream partners are planning on holding inventories at higher levels than their downstream counterparts, perhaps acting as a safety stock, whereas downstream is expecting to operate more leanly.” He continued: “It appears that the upstream portion of the supply chain is also planning on significantly tightened transportation capacity, and increased pricing, coupled with increased utilization. These two points are likely to strengthen freight markets should predictions come to fruition.”
