Transportation capacity continued to grow at a high rate during November with prices falling at the fastest rate on record, according to a monthly survey of supply chain executives released Tuesday.
The Logistics Managers’ Index displayed a capacity reading of 71.4 in November, 1.7 percentage points lower than theA reading above 50 indicates expansion while one below that indicates contraction.
Transportation utilization was down 2.8 points to a neutral reading of 50. Responses captured in the second half of November were “slightly more negative,” meaning utilization “may be seeing the beginning of a contraction period” after expanding every month since May 2020. The National Truckload Index is based on an average of booked spot dry van loads from 250,000 lanes and 10,000 daily spot market transactions. The NTIL is a seven-day moving average of linehaul spot rates excluding fuel.Inventory growth rates throughout the supply chain slowed significantly during the month. After average readings of 69.6 this year, 62.7 in 2021 and 58.4 in 2020, the subindex fell 10.7 points to 54.8 in November, with respondents at the wholesale level seeing slower growth.
The report cautioned that when the inventories subindex falls significantly, there is usually an increase in the following period. “So, there is a chance the inventory level index will bounce back up somewhat, post-holiday,” according to the report.“The bullwhip effect was probably inevitable, given the sharp oscillations in supply and demand experienced over the last few years,” the report read.
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