The August ITS Supply Chain Report confirms that the “trucking sector saw modest expansion in July despite larger global economic uncertainty and rising industry costs,” ITS Logistics, a Nevada-based third-party logistics (3PL) firm, reported Aug. 21. Additionally, the drayage sector experienced the “second-highest volume of U.S. imports ever recorded,” coming in just 555 TEUs (Twenty-Foot Equivalent Units) shy of the all-time high in May 2022, it said, and in warehousing, PPI (Producer Price Index) rose to 153.982, “hinting at a slight recovery following a sharp decline from May to June.” Overall economic performance was “still strained by inflation and labor concerns,” but “did cool down enough to satisfy markets,” ITS Logistics reported.
“While capacity has tightened with ongoing carrier exits, the real story is that cost pressures remain significant and freight rates, broadly, are still challenged—just barely covering the bills,” ITS Logistics Chief Commercial Officer Josh Allen said. “This isn’t broad-based recovery. The opportunities that exist are selective, shaped by tariff volatility and a shifting regulatory environment.”
According to the 3PL firm, the Logistics Managers Index (LMI) revealed a reading of 59.2, “with growth being driven by smaller logistics companies and demand for freight movement of front-loaded goods from ports and distribution centers.” As noted in a recent FreightWaves report, it added, “smaller firms—companies with less than 1,000 employees—and upstream companies are what impacted activity in the supply chain during July, with both reporting higher inventories.” Smaller companies, the report continued, “confirmed swift expansion in inventory at 64.8, while upstream firms experienced an expansion of 58.5, versus the contraction among downstream companies at 47.6. The decline in stock levels across retailers was attributed to the intermittent nature of tariffs. Additionally, warehousing also saw a modest uptick in the PPI, reflecting early stabilizing and potential normalization of operational activity.”
ITS Logistics said that across the U.S., the top ten import gateways all saw strong gains in import volumes—“a rise that reflects traditional seasonal demand, as well as suspected front-loading activity ahead of tariff policy changes.” The convergence, it noted, resulted in the second-highest import volume on record, just shy of post pandemic-fueled operations in May 2022.
“These isolated positive influxes across the supply chain, such as port volumes and LMI growth, contrast broader inflation trends,” Josh Allen pointed out. “More than likely, these gains will average out over the coming months.”
Fuel prices are a growing challenge across the freight industry, according to ITS Logistics, which recently introduced the ITS Logistics Fuel Card. “In one survey, more than half of U.S. transport and shipping firms reported spending at least 20% of their operating budget on fuel,” the 3PL firm reported.
On Aug. 20, it was announced that “Federal Reserve officials raised concerns surrounding the state of the labor market and inflation,” ITS Logistics noted. “The majority of officials agreed that lowering interest rates now would be too soon, while the July meeting minutes also showed a difference of opinions across the collective among the central bankers, whose vote to hold their key rate steady came despite receiving objections from two Fed governors who were in favor of cutting. Policymakers also voiced concerns about rising threats to the economy that would justify further monitoring.”
Separately, ITS Logistics recently issued the August forecast for its US Port/Rail Ramp Freight Index, reporting that “[e]xport volumes remain challenged as tariff negotiations continue, while inbound volumes, especially to the U.S. West Coast, are still strong.”
