Tariff Pressure and Inventory Shifts Tighten U.S. Logistics Capacity

Event summary

  • The Logistics Managers’ Index (LMI) fell to 54.2 in December 2025, its slowest rate of expansion since April 2024, with inventory levels contracting sharply to 35.1, a 17.4-point month-over-month decline.
  • Warehousing capacity expanded to 61.2 while utilization dropped to 42.9, the second-lowest utilization reading on record.
  • Spot truckload rates rose in December 2025 due to seasonal and weather effects, but against a backdrop of still-loose capacity and modest shipment volumes.
  • Consumer sentiment declined to its lowest level in three years in November 2025 due to economic uncertainty and tariff anxiety.

The big picture

The U.S. logistics sector is experiencing a strategic shift driven by tariff pressures and inventory management strategies. The decoupling of warehousing utilization from transportation markets indicates an inventory-driven adjustment rather than a freight-driven one. This trend is reinforced by the diversification of ports of entry and the reconfiguration of warehouse networks towards more balanced and efficient distribution models. The industry is moving towards a velocity cycle, where firms reduce total stock while maintaining space for more frequent replenishment and downstream service.

What we're watching

Inventory Dynamics
How tariff-driven cost pressure will continue to reshape inventory ownership and replenishment cycles.
Capacity Tightening
The pace at which trucking capacity decreases and its impact on freight rates.
Supply Chain Reconfiguration
Whether the shift towards intermediate middle-mile warehousing nodes will improve industry efficiency.