LMI Logistics Managers Index

The Logistics Managers' Index (LMI) is a monthly diffusion survey of change across inventory, warehousing and transportation. Researchers at five American universities run it with CSCMP (Council of Supply Chain Management Professionals), and it has run since September 2016. The survey gathers replies from 100-plus director-level managers, plus subscribers to DC Velocity and Supply Chain Quarterly.

Most respondents work at firms active on six continents, largely at firms with revenue above one billion dollars. The index tracks breadth of reported change, not freight volume or output. A reading above 50.0 means expansion, while a reading below means contraction. It serves as a leading economic indicator that can flag shifts in the wider economy.

Responses refer to one reference month and are collected in that month. Managers report that month's change and a 12-month-ahead forecast for each metric. The index is released on the first Tuesday covering the prior month, with no published time of day. Each release shows the headline with its point change, direction and rate labels, component and history tables and forecasts.

It splits results into Upstream versus Downstream, early versus late responses and large versus small firms, with significance tests, plus a macro essay. It also reports Aggregate Logistics Costs on a 0 to 300 scale, with 150 as breakeven. Readings stand as final on release, since no revision policy is published.

The headline combines 8 component indices by an undisclosed method, so strength in one area can offset weakness elsewhere.

• Inventory Levels: captures whether firms hold more or less stock, signaling stockbuilding or destocking.
• Inventory Costs: captures the cost of carrying that stock, signaling storage and capital pressure.
• Warehousing Capacity, Utilization and Prices: captures available space, how full warehouses are and storage rates, with falling capacity signaling tighter conditions.
• Transportation Capacity, Utilization and Prices: captures available freight space, how intensively it is used and freight rates, with falling capacity signaling tighter conditions.

The August 2023 report, released September 5, 2023, showed a headline of 51.2, up 5.8 points from 45.4, ending 3 months of contraction. Inventory Levels read 47.9 and Transportation Prices 42.9, both still contracting, while Transportation Utilization sat exactly at 50.0. Upstream firms read 48.7, still contracting, against 55.8 downstream, so the headline masked a split. The authors warned it was unclear if expansion would hold, showing a rising headline need not mean broad strength.

1. Responses: Each manager reports whether each metric moved up, down or stayed unchanged, plus a 12-month-ahead forecast on the same basis.
2. Shares: For each metric, compute the share reporting decline, unchanged and increase, called PD, PU and PI.
3. Diffusion index: Combine shares as 0.0 times PD plus 0.5 times PU plus 1.0 times PI, giving a 0 to 1 score.
4. Reported scale and example: Multiply by 100 for a 0 to 100 reading where 50.0 means no change. For example, 25% decline, 38% unchanged and 37% increase gives 0.56 times 100, or 56.0, signaling expansion.
5. Headline: Combine the 8 readings by an undisclosed method on the same 0 to 100 scale.
6. Seasonal adjustment: The indexes are not seasonally adjusted, so seasonal patterns stay in the data.