Logistics Managers’ Index Hits 18-Month Low as Holiday Demand Depletes Inventory
Event summary
- December 2025 LMI score dropped to 54.2, the lowest since April 2024, marking 10 consecutive months below the all-time average.
- Inventory levels plummeted 17.4 points to 35.1, the steepest monthly decline on record during holiday shopping.
- Warehousing utilization fell to 42.9 while capacity rose to 61.2, reflecting supply chain strain.
- Transportation utilization increased to 58.2, with prices hitting 66.7, the highest since January 2025.
The big picture
The LMI’s sharp decline underscores the supply chain’s sensitivity to holiday demand surges, with inventory depletion signaling both strong sales and potential structural inefficiencies. The logistics sector’s role as an economic bellwether raises questions about whether current trends reflect temporary strain or deeper shifts in consumer behavior and supply chain strategy. Upstream-downstream inventory strategies and transportation dynamics will shape freight market resilience in 2026.
What we're watching
- Inventory Replenishment
- How quickly retailers rebuild depleted inventories and whether upstream partners maintain higher safety stocks.
- Transportation Capacity
- Whether driver shortages and growing demand will further tighten transportation markets and elevate prices.
- Consumer Segmentation
- The pace at which spending patterns diverge between high earners and lower-income consumers.