September Shipping Data Reflects Unusual Freight Slowdown
September traditionally marks a peak period for freight activity as retailers prepare for the holiday season. However, this year’s logistics data indicates a stark departure from the norm, with shipping volumes and transportation utilization showing signs of contraction rather than expansion. The latest Logistics Managers’ Index (LMI), which aggregates key logistics metrics including inventory levels, warehouse costs, transportation capacity, and pricing, reported its lowest transportation utilization for September since the index’s inception.
Logistics Managers’ Index Indicates Shrinking Freight Activity
The LMI score for September 2025 stood at 57.4, down 1.9 points from August and marking its lowest point since March. Readings above 50 signify industry growth, while those below 50 indicate contraction. Although the overall index remains above 50, the downward trajectory signals weakening momentum.
Dale Rogers, professor of supply chain management at Arizona State University and co-author of the LMI, noted, “We are not seeing the typical strong growth associated with holiday merchandise shipments this year.”
Rogers highlighted that the data points to a declining growth rate for future freight orders and an increase in inventory levels, which in turn pressures warehouse costs upward. He described the situation as a “slight negative freight inversion” persisting since August.
Upstream Supply Chain Faces the Sharpest Headwinds
The most pronounced difficulties are apparent in upstream supply chain sectors, where raw materials are sourced and transported to manufacturers. Transportation price growth in this segment is marginal, with an LMI reading of just 51.4. Meanwhile, manufacturing and wholesale levels report stagnant inventory levels, attributed to front-loading of goods earlier in the year in anticipation of tariffs. Many of these front-loaded products remain warehoused, exacerbating capacity constraints and driving inventory costs higher.
Transportation Utilization Hits Baseline, Indicating Stalled Movement
The index for transportation utilization—the measure of freight movement from warehouses to stores or consumers—fell to 50.0 in September, representing no growth and signaling a standstill in shipping activity. By contrast, the eight-year average for September transportation utilization is 65.1, underscoring the unusual stagnation this year. Despite this, transportation prices remain slightly elevated, with typical seasonal patterns suggesting some downstream activity may persist through the remainder of 2025. However, it remains uncertain whether these factors will prevent a freight recession or if the sector is already entering one.
Economic Context and Outlook
The ongoing trade disputes and tariff-related shipping surges have contributed to atypical economic patterns, affecting GDP and inflation metrics. According to Rogers, for the LMI trend to reliably signal a freight recession, negative data should persist for at least three consecutive months. September marked the second consecutive month of such indicators.
“This is the lowest rate of growth we have tracked for transportation utilization since April 2024, the last month of the most recent freight recession,” said Rogers.
FinOracleAI — Market View
September’s logistics data reveals clear signs of stress within the freight market, with transportation utilization stalling and inventory costs rising amid tight warehouse capacity. While transportation pricing remains marginally positive, the sustained downward trend over two months raises the risk of a renewed freight recession.
- Opportunities: Potential for strategic inventory management and cost control improvements among logistics firms.
- Risks: Prolonged freight contraction could further disrupt supply chains and pressure transportation providers’ margins.
- Market Uncertainty: Ongoing tariff impacts and trade tensions may continue to create volatility and irregular shipping patterns.
- Seasonal Effects: Downstream activity may temporarily buoy freight demand, but sustainability remains unclear.
Impact: The logistics sector faces mounting headwinds, with data signaling a potential downturn in freight activity that could affect broader supply chain dynamics and economic growth in late 2025.
